Stock Recommendations Today: Paytm, Nykaa, IndiGo, Colgate On Brokerages Radar

Brokerages largely believe India's GDP values for the March quarter were higher than expected, and Morgan Stanley believes growth will moderate due to weak global demand.

Investec expects growth moderation and elevated asset quality trends in the non-banking financial space, as well as small finance banks, to continue in the first half of the current fiscal.

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.

• Maintained 'hold' with a target price of Rs 1,700, indicating a 3% downside potential.

• The March-quarter results beat subdued expectations.

• Valuation remains a concern despite the company’s growth story.

• Jefferies highlighted ongoing concerns regarding concentration risk and high volatility.

• Management aspires to achieve 25% growth in the midterm.

• Maintained 'hold' with a target price of Rs 870, indicating a 2% downside potential.

• The market anticipates a possible reintroduction of Merchant Discount Rate on UPI person-to-merchant transactions, driven by a sharp cut in government budgetary allocation for fiscal 2026.

• CLSA estimates that MDR could boost Paytm’s adjusted Ebitda for fiscals 2027 and 2028 by 20–50%.

• A reasonable MDR (10 basis points or more) could trigger a rerating for Paytm.

• CLSA assumes 18–25% industry growth for UPI-P2M over the next three years.

• MDR reintroduction is seen as a significant potential upside and could lead to a rerating for the stock.

• Maintained 'buy' with a target price of Rs 6,300, implying an 18% upside.

• Continues to see new horizons of growth for IndiGo, including becoming the first airline to start operations at Navi Mumbai International Airport.

• International route expansion plans cover Europe, Central Asia, and Southeast Asia.

• Jefferies highlighted IndiGo’s dominant market share, strong network, and ongoing capacity and route expansion as key drivers for long-term growth.

• Rates 'overweight' with a target price of Rs 191, indicating a 6% upside.

• Management is confident about improving growth trends in the fashion segment, with green shoots visible in the first few months of the current fiscal.

• Fast delivery initiatives are performing well in metro markets, and management expects Ebitda margins to improve across all three sub-segments.

• Maintained 'overweight' with a target price of Rs 2,750.

• Expects back-ended revenue growth in fiscal 2026, with margins to remain strong.

• Focus areas include category development, premiumisation, and innovation, along with enhanced distribution and minimising channel conflicts.

• Ebitda margin is expected to stay in the 32–34% range, with productivity and savings measures (4–5% of revenue) being reinvested.

• Indian steel prices remain about 15% higher than imported steel (even after import duty).

• Steel imports into India have recently decreased.

• The rally in steel stocks is driven by strong domestic demand, a 12% government duty on imports protecting local producers, and positive news from China about supply cuts.

UBS

• Real GDP growth at 7.4% YoY in March quarter was above expectations.

• UBS raised India fiscal 2026 real GDP growth forecast to 6.4% on an annual basis.

• RBI to cut rates an additional 50-75bps this year; fiscal drag to ease.

Morgan Stanley

• Growth in GDP of 7.4% and GVA of 6.8% higher than expected.

• Growth meaningfully above Morgan Stanley's expectations.

• Improved industrial activity with manufacturing and construction leading growth.

• FY26E GDP at 6.2%.

• Expects growth to moderate due to weak global demand.

• Monitoring domestic policy trends and global tariffs.

Deutsche Bank 

• Deutsche Bank states stronger GDP growth indicates a 5.50% terminal repo rate is appropriate.

• Jan-March 2025 GDP growth improved to 7.4% YoY, higher than the estimate of 6.8% YoY.

• Manufacturing sector saw a growth of 4.8% YoY in Jan-March 2025, driven by a rebound in corporate sector earnings.

• Mining sector growth remained low, but improved to 2.5% YoY.

• Electricity sector grew at 5.4% YoY.

• Construction sector had strong growth at 10.8% YoY.

• Financial/real estate/professional services sector growth improved 7.8% YoY.

• Agricultural sector growth remained robust at 5.4% YoY.

• Most SFBs/NBFCs reported a decline in spreads, led by yield decline.

• Expects growth moderation and elevated asset quality trends to continue in the first half of the current fiscal.

• Valuations remain near all-time high across most segments.

• Prefer affordable HFCs (HFFC, Aptus, Aadhar), PNB Housing, AU SFB & Ujjivan SFB.

• Downgraded Jana SFB to 'hold', see RoA remaining below 1.5% over the next fiscal.

• Maintained 'buy' with a revised target price Rs 1,700, implying a 16% upside.

• March-quarter results missed expectations on both own and consensus estimates.

• Excellent start to fiscal 2026 drives strong guidance on pivotal entry in NCR.

• FY26 guidance for 60% pre-sales growth is credible on large launches.

• Large launches slipped towards end of Q4 and beginning of the current quarter.

• Expects flat collection trend to reverse; capex deployment continues.

• Maintained 'buy' with a target price of Rs 9,400, implying 35% potential upside.

• Reaffirmed constructive stance on wealth management, asset management, and asset servicing.

• Positivity driven by movement in flows, new clients, and new products.

• Productivity benefits are expected to further aid the business.

• The street is ignoring the pace of Nuvama’s growth and business momentum.

• Currently trades at 20 times FY27E earnings.

• Maintained 'hold' with a target price of Rs 1,565, indicating a 4% potential upside.

• Estimates sales and EPS CAGR at 14% and 19% over next two fiscals.

• After a 17% rally in the last three weeks, the company trades at 66 times FY26E PE, with current valuations about 25% above its historical 10-year average PE.

• Astral foresees industry growth at +6–7%, and its own growth at low-double-digits.

• Post 17% rally in last three weeks, the company trades at 66 times the FY26E PE.

• UBS maintained 'buy' on Mahindra & Mahindra with a price target of Rs 3,700, implying a 24% upside.

• M&M is expected to significantly outperform the industry in the current fiscal, with SUV volume growth forecast at 15–18%.

• The outlook for exports is positive, with expansion into right-hand drive markets underway.

• M&M plans to launch two cheaper EV variants in Q1 and Q2 FY26.

• Recent sales data confirms strong momentum: May 2025 SUV sales rose 21% year-on-year to 52,431 units, and total vehicle sales increased 17% to 84,110 units, with exports up 37%.

• Indian auto outlook: UBS notes Tesla’s direct-to-consumer model may not work well in India due to pricing and distribution challenges.

• Free Trade Agreements could open new markets, such as the UK.

• CLSA notes that AI demand remains robust, driven by deep reasoning models.

• The firm maintains a positive stance on the Indian IT sector, expecting a V-shaped recovery ahead.

• The brokerage highlights that Nvidia's DeepSeek and Qwen from China are two of the best AI models globally.

HSBC

• Downgraded to 'hold' with a target price of Rs 200.

• Cites a "tall ask" in achieving margin targets.

• Limited clarity on the earlier commitment to break even in the fashion business Ebitda margin by fiscal 2026.

• Sees risks to the consensus expectation of a 150 basis points margin improvement.

• Reduced financial year 2025 revenue estimates by 3–5%.

• Revised Ebitda estimates by a range of +3% to -10%.

Nomura

• Maintained 'neutral' rating with a target price of Rs 216.

• Emphasised focus on profitable growth.

• March quarter Ebitda was slightly ahead of estimates.

• Beauty and personal care segment growth remains on track.

• Continued focus on driving profitable growth in the fashion segment.

• Prefers CarTrade over Nykaa in the sector.

Macquarie

• Maintained 'underperform' with a target price of Rs 6.50.

• Q4 missed estimates due to continued subscriber erosion and a higher interest burden.

• Company approved a fundraise of Rs 20,000 crore (US$2.3bn).

• ARPU rose 0.6% QoQ to Rs 164 per month.

• There is no quick fix to Vodafone Idea’s deep-rooted fundamental challenges, according to the brokerage.

• Sees challenges to further equity infusion by the government.

• Macquarie prefers Indus Towers over Vodafone Idea.

UBS

• Maintained a 'buy' call with a target price of Rs 12.10.

• Company lost 1.6 million subscribers in Q4 (better than the estimated 1.8 million loss).

• Added 0.4 million 4G subscribers, ending the quarter with 126.4 million 4G subs.

• Spent Rs 42.3 billion in capex during the March-quarter; overall fiscal 2025 capex at Rs 95.6 billion, in line with guidance.

• Total unique broadband towers increased by 8,511 sequentially.

• Cash balance at the end of Q4 was Rs 99.3 billion.

• UBS is watching for continued softness in business performance and highlights that successful fund raising is key for the company’s outlook.

• Maintained 'sell' rating; raised price target to Rs 1,380, implying a 3.4% downside.

• Noted healthy FY26 pre-sales guidance; new launches will need to be closely monitored.

• Demand in Bengaluru and Gurgaon appears at least steady.

• Expects contractual and manufacturing segments to grow 10% in FY26, with improved profitability.

• Project-level margins from current pre-sales are in the range of 40%.

• Launch timeline visibility is slightly better for FY26.

• Maintained 'buy' rating with a target price of Rs 3,480, implying a 17.3% upside.

• Demand momentum for M&M’s Utility Vehicles remained strong; May 2025 domestic volumes up 21% YoY (flat MoM).

• May volumes were supported by incremental Battery Electric Vehicle sales.

• Tractor segment shows steady growth: domestic volumes up 10% YoY (+1% MoM).

• Peer Escorts Kubota reported a 2% YoY decline in domestic volumes, indicating possible market share gain for M&M.

• Light Commercial Vehicle volumes rose 8% YoY.

• As capacity expands and new models are launched, Citi expects significant market share gains for M&M in the UV segment.

• Citi maintained a 'buy' rating on Hero MotoCorp with a target price of Rs 4,900, implying a 13.8% upside.

• Domestic two-wheeler volumes rose a marginal 2% YoY.

• Management noted VAHAN retails were approximately 500,000 in May, up around 12% YoY.

• The 69% MoM volume growth reflects very weak wholesale in April.

• Segment-wise: Motorcycle volumes up 1% YoY (+66% MoM); scooter volumes up 21% YoY (+68% MoM).

• TVS Motor’s YoY growth in domestic volumes at 14% was much better than Hero’s.

• Exports remain sluggish: volumes flat YoY, up 11% in May 2025.

• A possible uptick in rural demand could be positive for Hero MotoCorp.