Stock Recommendations Today: IT, HDFC Life, Hindustan Zinc On Brokerages' Radar

Citi believes the Indian IT sector's demand could face a double blow after full effects of tariffs comes in. The brokerage has a sell call on Hindustan Zinc amid current valuations and a subdued zinc outlook.

HDFC Life Insurance Co.'s management expects moderate growth in the first half of the financial year 2026 followed by a pickup in the second half.

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:

• Global economy has been holding up fine for Indian IT.

• Demand could face a double blow after full effects of tariffs comes in.

• US cloud service giants are growing from AI services.

• AI growth not a positive sign for IT services growth.

Indian IT management commentary:

• Discretionary spend continues to be weak.

• Strong pipeline continues.

• Mid caps sees a comfortable growth.

• Continue to prefer Infosys, HCLTech and Mphasis.

• Management expects moderate growth in the first half of the financial year 2026 followed by a pickup in the second half.

• Growth is anticipated to outperform the overall industry.

• The impact of "surrender value" regulations has been largely mitigated.

• Pricing discipline is expected to support profitability.

• Lower interest rates are likely to aid demand for non-participating products.

• The company is regularly repricing products to reflect falling yields.

• Citi maintains a 'sell' rating on Hindustan Zinc with a target price of Rs 400, reflecting a 25% downside.

• The company announced its first interim dividend of Rs 10 per share for the financial year 2026.

• Citi incorporates an estimated dividend of Rs 15 per share for the financial year 2026.

• The sell rating is maintained amid current valuations and a subdued zinc outlook.

• Zinc is expected to be in surplus in calendar year 2025, while the silver outlook remains more resilient.

• Citi estimates that every 10% change in silver price impacts Ebitda by 3.6%.

• Every $100 per tonne change in zinc-lead London Metal Exchange prices is estimated to impact Ebitda by 5%.

• Key upside risks include higher silver, zinc, and lead prices, higher volumes, and rupee depreciation.

• Systematic investment plan flows are holding up, while lumpsum flows remain weak.

• Valuations for asset management companies are now close to the peak of the last cycle.

• The outlook for assets under management growth is muted.

• Earnings are expected to grow at a slower rate.

• HSBC remains cautious on the sector despite structural growth opportunities.

• Individual new sum assured growth stronger than individual APE for most large players.

• SBI Life delivered strong 68% annual growth in May due to sustained new retail protection products.

• ICICI Prudential Life and HDFC Life's individual new sum assured growth was at 19% and 14% respectively, on an annual basis.

• CLSA maintains an Outperform rating on Tata Communications with a target price of Rs. 2,100, implying a 21% upside.

• Management targets data revenue of Rs. 28,000 crore and Ebitda margins of 23-25% by financial year 2028.

• The data business currently forms 84% of consolidated revenue.

• Data business margin was 18.5% in the financial year 2025.

• Management guided for an Ebitda compound annual growth rate of 18% by financial year 2028.

• The company is expected to see sizable market expansion opportunities led by digital platforms and services.

• Impact of policy stimulus on demand is expected to materialise in the second half of financial year 2026.

• Share of services in total consumption has increased to 51.7%, up from 47% 10 years ago.

• Services account for 60% of incremental consumption growth.

• Durable goods have been growing faster than services.

• The stimulus may lead to larger growth in the services sector.

• Demand for durable goods could pick up pace as a result of the stimulus.

• The Morgan Stanley MNC Sentiment Index for India rose to a two-year high and continued to gap higher versus China, marking the 14th consecutive quarter of outperformance against China.

• High MNC sentiment bodes well for India’s capital expenditure cycle, balance of payments, corporate profits, and share prices.

• Strong sentiment is likely to result in higher investments and profits.

• The MNC Sentiment Index has a strong association with foreign portfolio investor profits and the direction of share prices.

• Near-term outlook for India’s consumer sector remains challenging.

• Monitor for any recovery in financial year 2026.

• Expect urban consumption recovery starting from the second half of the fiscal.

• Maintain a positive outlook on rural consumption demand.

• Companies are likely to reinvest benefits from raw material cost softening to prioritise volume growth and market share gains.

• Increased competitive intensity is expected across the sector.

• Preferred food and beverage top picks: Britannia, United Spirits, and Varun Beverages.

• Preferred home and personal care top pick: Godrej Consumer Products.

• Maintained 'buy' with a price target of Rs 1,750, indicating 14.9% upside potential.

• Appointment of Sumit Madan as managing director and chief executive officer could be a positive development.

• The appointment eliminates overhang of management uncertainty.

Jefferies

• Jefferies expects fiscal 2026 sales growth in India’s property sector to accelerate to 22%, driven by a strong launch pipeline.

• Good launch activity is seen across major developers, including Godrej Properties, Sobha, and Lodha.

• Rate cuts are viewed as a relief for mid and affordable-segment housing, supporting demand.

• Interest rate cuts have a positive correlation with developer valuations.

• Despite the recent rally, property stocks are trading in line with their five-year net asset value premiums.

• Preferred picks are DLF, Godrej Properties, and Lodha.

Morgan Stanley

• The BSE Realty Index has risen 20% in the past month, reflecting improved liquidity and investor sentiment in the property sector.

• Recent rate cuts translate into lower loan EMIs, directly improving housing affordability for buyers.

• Morgan Stanley expects new entrants in the market, particularly upgrading from lower segments to medium and premium residential segments.

• Developers remain confident about residential market volume growth and positive price outlook.

• Investor interest in mid-cap developers and real estate investment trusts has grown notably.

• Rate cuts in the current cycle have historically resulted in sector outperformance, especially for developers with better balance sheets and fewer uncertainties.

• Rated 'buy' with target price of Rs 1,400, indicating an upside potential of 18%.

• Beginning a new phase of aggressive capacity addition to increase its bed count by 75%.

• Plan to grow from 5,100 beds currently to 9,000 beds over next 3-4 years.

• Majority of new beds will come from brownfield expansions, ensuring faster break-even.

• Intends to remain acquisitive, leveraging its strong execution track record.

• Newly acquired units in Lucknow, Noida, and Nagpur have significant room for growth in sales and margins.

• Expects over 20% Ebida growth in the next two years.

• Citi rates Britannia as 'buy' with a target price of Rs 5,645, seeing upside risk to earnings per share and valuation multiples.

• The company shows an improving market share trajectory and potential for margin expansion.

• Britannia has already taken price corrective measures and is now at competitive pricing.

• The company is expected to drive market share gains in the near term.

• Potential margin expansion is anticipated, led by commodity cost correction.

• Citi estimates an acceleration in growth with 11% revenue growth and 16% recurring EPS growth in FY26.

• Investec maintained a 'buy' rating on Afcons Infrastructure with a target price of Rs 585, implying a 31% upside.

• Management reiterated its FY26 guidance of 20-25% revenue growth, adjusted Ebitda margins above 11%, and order inflows between Rs 20,000 crore and Rs 25,000 crore.

• Revenue guidance is contingent on successfully executing recently won L1 orders in the first half of the fiscal.

• Working capital is expected to largely normalise in financial year 2026.

• Expansion into the Middle East and Eastern Europe regions is seen as providing exciting growth opportunities.

• Macquarie maintained an 'underperform' rating on United Spirits with a price target of Rs 1,250, implying a 21% downside.

• Sharp price hikes are expected to impact consumption negatively as users may lower their consumption or consider alternatives.

• Historically, sharp price increases have negatively affected volumes and tax collections.

• Maharashtra accounts for approximately 15% of United Spirits’ sales.

• Assuming a 30% volume impact due to price hikes, this implies an estimated 5% hit to overall sales.

• Goldman Sachs notes that the April-June quarter accounts for 40% of Varun Beverages’ standalone revenue.

• Non-seasonal rains in May caused an adverse impact on sales of summer products during this quarter.

• Goldman Sachs expects Varun Beverages, Dabur, and Tata Consumer Products to register lower sales growth in beverages for this period.

• The April-June quarter is expected to see a one-off weather-related impact on sales.

• Competitive intensity has remained unchanged over the last 3-4 quarters.

• Citi maintained a 'neutral' rating on HCL Technologies with a target price of Rs 1,510.

• Discretionary spending remains subdued overall.

• Business segments like BFSI, telecom, and technology are performing better for the company.

• Consumer and manufacturing sectors are facing headwinds.

• Margins are likely to remain stable in the near term.

• The company continues to execute well despite a challenging environment.

• First quarter performance is expected to be in line with past results.

• Citi continues to prefer HCL Technologies along with Infosys over other large-cap Indian IT companies.