Stock Recommendations Today: HAL, Eris Lifesciences, Hyundai Motor, Divi's Labs On Brokerages' Radar

With the defence sector hogging the limelight the past few weeks, Jefferies sees potential for further domestic manufacturing, and hiked its target price on Hindustan Aeronautics Ltd.

Investec initiated coverage on Eris Lifesciences Ltd., stating that the company is poised for a strong performance over the next three years. Synergies from a recent acquisition, a ramp-up in exports, and debt reduction are likely to support overall performance, according to the brokerage.

Brokerages are divergent on Hyundai Motor India Ltd., with Macquarie and JPMorgan overweight given the company's premiumisation, whereas BofA maintains underperform given the lack of near-term catalysts.

NDTV Profit tracks what analysts are saying about various stocks and sectors. Here are the analyst calls to keep an eye out for on Monday.

• Investec initiated coverage on Eris Lifesciences with a buy rating and a target price of Rs 1,880.

• Eris is poised for a strong performance over the next three years, with a forecast Earnings Per Share compound annual growth rate of over 30%.

• The company is expected to see improved growth in India, supported by new product launches, including glucagon-like peptide-1 receptor agonists.

• Synergies from a recent acquisition, a ramp-up in exports, and debt reduction are likely to support overall performance.

• Eris is well positioned to become a key player in the emerging generic semaglutide and GLP-1 opportunity in India.

• The company is leveraging its strong diabetes franchise to drive future growth.

• Maintained buy and hiked target price to Rs 6,475 from Rs 4,715.

• Management articulated that margins are sustainable at 30-31% as cost optimisation is a focus.

• High margin service income and aircraft deliveries should drive double digit revenue growth for three to five years.

• Revenue growth guidance of 8-10% for fiscal 2026 looks conservative.

• Recent India-Pakistan tensions saw PM Modi laud 'Made in India' equipment.

• This points to further domestic manufacturing focus.

Morgan Stanley

• Downgrades to equal-weight from overweight and cut target price to Rs 6,155 from Rs 6,633.

• Stock has outperformed in the past three months and now trades at 67 times the fiscal 2027 core EMS business.

• This adequately factors in 39% core compound Ebitda growth over fiscals 2025 to 2030.

• Core EMS on a strong footing; asset turns likely to improve.

• Cash flow and new business execution hold the key.

Jefferies

• Maintain buy; raise target price to Rs 7,660 from Rs 6,660.

• Strong execution with highest quarterly margin recorded.

• Expect multiple growth levers for Kaynes.

• New orders from higher-margin segments including industrial and aerospace.

• Outsourced semiconductor assembly and test plus printed circuit board production to start from the quarter ending March 2026, with sales gaining traction in fiscal year 2026-27.

• CLSA maintained outperform with a target price of Rs 315.

• Lofty pipeline and conservative guidance.

• Any volatility in regards to cyclically weak fiscal 2026 guidance would be another opportunity to add.

• The government water and urban infrastructure programmes should create years of growth visibility for NCC.

Macquarie

• Maintain outperform with target price of Rs 2,100.

• New launches and export focus, along with higher average selling prices, led to an Ebitda beat.

• Positive on Hyundai Motor’s premium positioning in the Indian passenger vehicle segment.

• Improved model launch visibility and capacity addition will support growth in the second half of the fiscal 2025-26.

BofA

• Maintain underperform; raise target price to Rs 1,850 from Rs 1,665.

• Strong margin delivery reflects focus on premiumisation.

• Growth and market share recovery are still some time away.

• Investor day expected to provide insight into the new launch cycle.

• Given the lack of near-term catalysts, the underperform rating is reiterated.

JPMorgan

• Maintain overweight; cut target price to Rs 2,060 from Rs 2,140.

• Quarter ending March 2025 results beat driven by average selling price surprise.

• Improved product mix, moderation in discounting, and price hikes supported the beat.

• Volume challenges may continue in the first half of the fiscal 2025-26.

• Cuts to fiscal 2026-27 estimates are modest at 4%; full impact of new launches and production ramp-up expected next year.

• Maintain equal-weight with target price of Rs 320.

• Quarter ending March 2025 showed an Ebitda beat despite a miss on revenue.

• Express parcel volume and yields were lower than estimates.

• Parcel and logistics business revenue beat estimates.

• Other business segments underperformed relative to estimates.

• Maintain neutral; raise target price to Rs 603 from Rs 593.

• Quarter ending March 2025 results ahead of estimates; products performing well.

• Service recovery is critical to improving overall growth.

• Expanding focus on service to accelerate growth.

• Valuation already factors in a recovery.

• Maintain buy with target price of Rs 2,050.

• Decent performance in a tough environment.

• Strong profit growth in oils and robust traction in health and personal care offset weakness in foods.

• Management outlook is positive for fiscal 2025-26 on topline and margins.

• Expect scale-up in health and personal care, likely recovery in foods, and improved macroeconomic conditions.

• Diversification journey to continue, with non-edible oil basket scaling up to approximately 60% of fiscal 2025-26 Ebitda.

• Maintain buy with target price of Rs 770.

• For the second quarter in a row, Emami reported mid-single-digit volume growth.

• Overall results were ahead of estimates.

• Wide variation in brand performance continued.

• Unseasonal rains affected the summer portfolio’s performance.

• Management remains hopeful on growth ahead and plans to invest in advertising and promotion to drive growth.

Shriram Finance

• Gradual recovery expected; confident of sustaining 3-3.1% return on assets.

• Net interest margins to recover gradually; conservative loan growth guidance.

• Rating upgrade could reduce cost of funds by 30-40 basis points.

• Cost to assets expected to decline over the years.

ICICI Bank

• Growth expected to see modest recovery.

• Margins to decline in the near term but recover gradually.

• Credit costs to normalise around 50 basis points in the medium term.

• Further room for operating efficiency is visible.

ICICI Lombard

• Hope for a motor insurance target price hike remains.

• Growth outlook remains uncertain.

• Focus on further reducing combined operating ratio despite poor industry discipline.

• Confident of delivering 18-20% return on equity.

• Maintain buy; raise target price to Rs 2,700 from Rs 2,600.

• Quarter ending March 2025 results above estimates.

• Strong margins in both India and European Union markets.

• Stoferle acquisition will boost European Union revenue.

• Most new segments offer strong margin profiles.

• Endurance Technologies remains the top pick in the Indian auto-parts sector.

• Maintain neutral; raise target price to Rs 325 from Rs 290.

• Quarter ending March 2025 review shows substantial margin improvement; express growth remains tepid.

• Parcel and logistics business continues to grow well; margin improvement in this segment was positive.

• Sustaining margins over the next few quarters will be critical for the stock.

Morgan Stanley

• Maintain overweight with target price of Rs 7,185.

• Gross margin expansion drove the beat.

• Stable raw material prices and product mix supported margin expansion.

• Company reiterated its double-digit revenue guidance.

• Management sees high revenue opportunities ahead and plans to incur capital expenditure of Rs 1,400 crore in fiscal 2025-26.

Jefferies

• Maintain hold; cut target price to Rs 6,200 from Rs 6,280.

• Quarter ending March 2025 numbers were in line with estimates with largely balanced growth across segments.

• Divi’s currently has several projects at different stages of development.

• Does not target the generic Semaglutide opportunity as it intends to focus on working with innovators.

• Maintain hold rating due to near-term patent challenges and high valuation.

• Initiate buy with target price of Rs 1,543.

• Expect volatility to soften going forward due to APM allocation.

• Anticipate some favourable policy from the High Court regarding curbing the use of petrol/diesel in goods vehicles.

• This is likely to be the key demand driver for MGL going forward.

• Expect total volume growth of 6.7% per annum in fiscal 2024-25 to 2026-27.

• Expect margins to be at the lower range of guidance of Rs 9-11 per standard cubic meter.

• Prefer Indraprastha Gas over MGL due to better margin recovery and de-risked business model.