Stock Recommendations Today: Indian Markets, Retail Inflation, Adani Green Energy On Brokerages' Radar

Adani Green Energy Ltd., Birlasoft Ltd., Dr. Agarwal's Health Care Ltd., BEL Ltd., IndusInd Bank Ltd. and Indus Towers Ltd. were on brokerages' radar on Thursday.

Analysts have done a deep dive on the the US consumer price index, India strategy, and the financial sector as well.

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

• India remains a rich bazaar, now more attractive bottom-up buy ideas.

• Following an approximately 20% pullback, India's relative valuation harmonised for the growth and returns outlook.

• Even so, from a bottom-up perspective, they now find several attractive opportunities.

• Core six: Tata Consultancy Services Ltd., HDFC Bank Ltd., Sun Pharmaceutical Industries Ltd., Mahindra & Mahindra Ltd., Titan Co., Power Finance Corp.

• Tactical six: Reliance Industries Ltd., National Thermal Power Corp., Wipro Ltd., Tata Motors Ltd., Bharat Electronics Ltd., Shriram Finance Ltd.

• Rising stars: Indian Railway Catering and Tourism Corp., Uno Minda Ltd., Aditya Birla Capital Ltd., Devyani International Ltd., Delhivery, Lemon Tree Hotels Ltd.

• Notes a sharp price to earnings de-rating and crowding into large caps.

• At 20.5 times forward price to earnings, it would be a stretch to say valuations are inexpensive.

• History shows that when India enters a downgrade cycle, it is not the length but the quantum that matters.

• Finds that an average downgrade cycle sees an earnings per share cut of 14.5%, and we are now halfway through it.

• States buying stocks that have dropped the most from their highs is not a winning strategy over the longer term.

• Key fallen angels to focus on – beaten down stocks with better yield/revision – Hindustan Aeronautics Ltd., Macrotech Developers Ltd., Punjab National Bank, Zydus Lifesciences Ltd., Emami Ltd.

• Key fallen knives to avoid – beaten down stocks with poor yield/revision – Zomato Ltd., Havells India Ltd., Bharat Forge Ltd., Astral, Honeywell Automation India.

• Sees a green flag to another rate cut.

• Notes perishables fall further, core consumer price index led by gold.

• Industrial production picks up in January after a modest fourth quarter of 2024.

• Expects the rate cutting cycle to remain on track.

• Tracks March consumer price index at 3.6% year-on-year, as the downward momentum in perishable prices is stabilising and falling energy prices provide some support for headline inflation.

• Continues to project headline inflation at 4.8% for fiscal 2025, with minor downside risks slowing to 4.1% in fiscal 2026.

• A sub-4% February consumer price index reinforces an April cut.

• But core momentum picks up and will need to be monitored.

• March consumer price index is also projected to remain below 4% in the 3.6-3.7% range.

• Industrial production gets a consumption boost.

• January industrial production strength comes after a period of subdued industrial activity in the last two quarters and is, prima facie, encouraging.

• Initiates an 'outperform' rating with a target price of Rs 1,200 apiece.

• Sets a bull case target price of Rs 2,600 apiece, contingent on Adani executing its targets.

• Identifies Adani Green Energy as a structural renewable energy play.

• Notes Adani Green Energy is leading India's energy transition with a targeted 50 gigawatts capacity by fiscal 2030 versus 12 gigawatts currently.

• A more conservative pathway implies 25% Ebitda compound annual growth rate over the next five years.

• Builds in steady blended realisations.

• Recent decline in power purchase agreement tariffs is offset by an increasing share of higher-tariff merchant capacities.

• Expects heavy capital expenditure backed by steady cash flows.

• Forecasts Adani Green Energy to generate $1.8 billion annual operating cash flow against a cumulative capital expenditure requirement of over $10 billion through the fiscal year ending March 2030.

• Despite this high capital expenditure, expects net debt to Ebitda declining to 5 times by the fiscal year ending March 2030 versus 7 times currently.

• Retained an 'outperform' rating and lowered the target price to Rs 640 apiece from earlier Rs 710.

• States the client portfolio makeover is still a work in progress.

• Notes the client portfolio is still very sensitive to the United States economic cycle.

• Mentions management has embarked on a journey to put the firm on a stronger footing.

• Observes renewals are strong, but new deal wins suggest near-term growth challenges.

• Lowered revenue and earnings before interest and taxes across the fiscal years ending March 2025 through March 2027, expecting a slower pickup in revenue growth and margins.

• Initiates an 'overweight' rating with a target price of Rs 502 apiece.

• Identifies Dr. Agarwal’s Health as India’s largest consumer eyecare services brand.

• Notes India's eyecare industry has a high total addressable market, high barriers to entry, and high returns as it is asset-light.

• As the segment's leading brand, backed by a doctor-promoter team, Dr. Agarwal's appears well positioned to outperform.

• Expects 19% revenue/Ebitda forecast over the fiscals 2025-2027.

• Retained an 'outperform' rating with a target price of Rs 350 apiece.

• Bharat Electronics is seasonally and secularly aligned, the brokerage noted.

• Sees a healthy pick-up in order wins in the fourth quarter, with more likely in the near term.

• Base order strength has been especially encouraging.

• The key catalyst for fiscal 2026 — expected quick reaction surface to air missile — appears to be shaping up well.

• Further, recent global developments strengthen the case for incremental tailwinds.

• BEL continues to be their overall top pick in India industrials.

• Retained an 'outperform' rating and lowered the target price to Rs 900 apiece from earlier Rs 1,300.

• Draws parallels from history to think about the future.

• Draws parallels from similar events at other banks, RBL Bank and Yes Bank.

• In the near term, sentiment alone drives the stock, but in the medium-term fundamentals do.

• When the Reserve Bank of India gave a one-year extension to the managing director of RBL Bank, and later appointed a public sector undertaking banker, the stock crashed 60%.

• The street feared there would be skeletons in the closet, however, over the ensuing quarters nothing emerged and the stock recovered its losses.

• A similar but temporary phenomenon happened with Yes Bank, with a forced-chief executive officer exit followed by a nil gross non-performing loan divergence report.

• IndusInd Bank’s stock price trajectory should be no different in their view.

• Notes a trinity of growth boosters.

• Expects bank credit growth can improve by 150-200 basis points to 12-13% over the next 12 months.

• First pillar: Demand boost from cut in taxes.

• Second pillar: Supply boost of financial and regulatory liquidity.

• Third pillar: Improving risk appetite.

• Wouldn't be surprised if credit growth improves slightly ahead of deposit growth, as government and Reserve Bank of India seem to be prioritising growth.

• Better growth and easing credit cost will aid re-rating.

• Larger private banks are better placed.

• Retained a 'buy' rating with a target price of Rs 490 apiece.

• States concerns on Indus Towers are likely overdone.

• Besides affordability, there are other challenges that satellite communication may need to contend.

• Reckons satellite networks would be more suited for servicing remote rural areas.

• Any concerns on Indus Towers on the back of the entry of satellite communication players in India therefore appears overdone.

• Separately, Indus Towers has, in fact, been setting up landing stations for satellite communication players like Starlink, Oneweb, etc. to offer them passive infrastructure services.

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