Stock Recommendations Today: IRCTC, TCS, Tata Elxsi On Brokerages' Radar
Here are all the calls you need to know from analysts on Friday.
Macquarie initiated an 'outperform' call on IRCTC, citing that its monopolistic advantage lies in 80% market share in rail e-ticketing.
Brokerages are widely bullish on Tata Consultancy Services Ltd. after the company's third quarter financial performance was announced on Thursday. However, Citi has maintained its bearish stance on the IT giant.
Meanwhile, Nuvama believes the Q3 results of consumer durables are likely to be a mixed bag.
NDTV Profit tracks what various brokerages are saying about stocks and sectors. Here are all the calls you need to know from analysts on Friday:
Macquarie On IRCTC
Initiated coverage with 'outperform', with a target price set at Rs 900, which is implied to have an upside potential of 20%.
IRCTC's monopolistic advantage lies in 80% market share in rail e-ticketing.
Co earns extra commission via 20% indirect flows from third parties.
Catering services to aid from more restaurant setting outlets, food delivery apps.
Expects catering services revenues to grow at 15% CAGR over next three years.
IRCTC's margins stand attractive and comparable with peer MakeMyTrip.
The company generates healthy cash flow due to minimal capex.
Key growth levers: Higher share of reserved train tickets, upgradation of Indian train fleet, improving contribution from ad revenue.
CLSA on TCS
Upgrade to 'outperform', with a hike in target price to Rs 4,546, indicating a 13% potential upside.
Further rupee depreciation over the US dollar could be another tailwind for its earnings in 2025.
The company's multiple is akin to the past.
Five-year average for TCS, currently it is trading at parity.
Citi On TCS
Maintain 'sell' rating with a target price of Rs 3,900, implying a potential downside of 4%.
Expect a gradual and uneven recovery.
Early signs of recovery in discretionary spend have been there for three quarters now.
Forward looking indicators weak for TCS.
Margin levers for most companies are at close to optimal levels.
Expect cost pressures in coming quarters.
HSBC On TCS
Maintain 'hold' with a price target of Rs 4,540, implying a 10% potential upside.
Performance seems to have bottomed out.
Good deal wins an early signs of discretionary spend pick-up, reduced deal cycles.
Margins going forward should improve further.
Remain 5–6% below consensus, though commentary provides some confidence.
Could underperform large peers due to higher Europe exposure.
Jefferies On TCS
Maintain 'buy', with a target price of Rs 4,760, implying a potential upside of 16%.
TCS's third quarter results were in line with estimates.
Encouraged by management comments on early signs of revival in discretionary spends.
Ramp-down of BSNL deal may provide scope to improve margins.
Maintain earnings estimates and expect 9% EPS CAGR over fiscals 2025 to 2027.
At 27x PE, valuation is attractive and factors in the near-term growth headwinds.
Nomura On TCS
Retain 'neutral' with a target price of Rs 4,020, implying a potential downside of 0.5%.
Modest miss on estimates with growth visibility for fiscal 2026 hazy.
UK led the growth up 4.1% while North America fell 2.3% year-on-year.
TCS noted that decision-making cycle in smaller projects has shortened.
Expect fiscal 2025 Ebit margin at 24.6%, flat year-on-year and 25.1% in fiscal 2026.
FY26-27 EPS are 5-6% lower than consensus.
Emkay On TCS
Maintain 'add' with a target price of Rs 4,500, implying a potential upside of 11%.
Performance weaker than estimates.
Trim their estimate by 1-3%, factoring in the Q3 miss and higher dividend payout.
Though the stock lacks a near term trigger, valuation has become favorable.
Nuvama On TCS
Maintain 'buy' with a target price of Rs 5,200, indicating a potential upside of 28.5%.
Results tick all the boxes, despite benign expectations.
Deal-wins were super strong even without any mega deals.
Commentary on early signs of revival in discretionary spends leads to a bright outlook.
View strong deal-wins, efforts to offset BSNL revenue impact as positive triggers for TCS.
Revival in developed market growth and discretionary spends marks incrementally positive signs for the industry.
Valuations remain attractive versus peers
Morgan Stanley On Tata Elxsi
Maintain 'underperform', with a revised target price of Rs 6,000, indicating a potential downside of 7%.
Q3 missed expectations, weakness in European transportation continues.
Lowered revenue growth forecasts to 5% in fiscal 2025 and 9.1% in fiscal 2026.
Sees limited growth visibility and see potential cut to consensus numbers.
Brokerage lower than consensus by 11-12% on FY 2026-27 EPS estimates.
Stock underperformed last year but still trades at rich valuations.
Nuvama On Consumer Durables
Preferred Picks: KEI, Polycab, Havells, Crompton, Amber, Dixon, PG Electroplast.
Consumer Durables companies’ Q3 results likely to be a mixed bag.
Electronics manufacturing & industrial cables to report a robust performance on industry tailwinds, strong demand.
Appliances & wires to post relatively weaker growth due to weak consumer sentiments.
Expect coverage to post 17%, 32%, and 36% year-on-year growth in revenue, Ebitda, and net profit respectively.
Nuvama On Cement Sector
Neutral stance on sector, top pick remains JK Cement.
Prices saw uptick in December, to improve further in the fourth quarter on government capex.
All India cement prices improved Rs 7 per bag in Dec. 24.
Demand is likely to gather pace in Jan. 25, which could allow more price hikes.
Believe the worst is over on the pricing front.
Nuvama On Consumer Sector
Top 'buys' for 2025: United Spirits, Marico, Pidilite, United Breweries.
Picks from one-two years perspective: Colgate, Britannia, Hindustan Unilever, Bikaji.
Stocks whose valuations factor headwinds: Godrej Consumer, Tata Consumer, Nestle.
United Spirits: Andhra reforms, strong wedding season, premiumisation to help co.
Marico: International biz remains robust, strong pricing growth likely in Parachute & Edible oils biz.
Pidilite: Expects core business to keep growing at a steady space.
United Breweries: Expects volumes to rise in high single-digits.
Demand drivers in 2025: Rural demand, pricing growth, diversification, science-based R&D, premiumisation.
Goldman Sachs On IndusInd Bank
Downgraded to 'neutral' with a target price of Rs 1,090 per share, implying a potential upside of 11%.
Cut EPS estimates by 5-18% over a variety of factors.
Revenue engines slowed over last two quarters.
Expects impact from rising delinquencies in commercial retail portfolio.
Expects slower loan growth to impact profit.
Valuations seem fair, risk reward balanced.
CLSA On Bajaj Finance
Maintained an 'outperform' rating on the stock, with a target price of Rs 9,200, implying a potential upside of 26%.
PAT compounding to start in FY26, after a year of downgrades.
NIM and credit costs drove PAT cuts while growth was in line.
Expects credit costs to improve in FY26.
Risks: lower growth, higher credit costs, lower fee income.
UBS On TCS
Maintained 'buy', with a target price of Rs 4,750, implying a potential upside of 17.5%.
Markets may see more positive than negative.
Deal conversion ratio indicates probable stabilisation.
Remain bullish despite weak 3Q.
Trading at similar valuations to Infosys, HCL Tech.
Jefferies On CDMO Players
CDMO stocks delivered stellar returns in 2024, despite mixed earnings.
See 2025 as a 'show-me' year for the sector.
Actual earnings delivery will delineate winners from laggards.
Build strong earnings growth across most of their coverage.
Slippages may not be taken kindly given steep valuations.
Remains selective with Piramal as the top pick.
Maintained 'buy' on Piramal Pharma, with a target price of Rs 310. indicating a potential upside of 26.5%.
Upgraded Syngene to 'hold', with a price target of Rs 890, indicating a 2.1% potential upside.
Downgraded Gland Pharma to 'underperform', with a target price of Rs 1,630, implying a potential 11.8% downside.
