Stock Recommendations Today: Financials, Tata Motors, M&M, Tata Power, Godrej Consumer On Brokerages' Radar

Morgan Stanley sees shifting consumer preferences driving increased demand for SUVs as a positive indicator for Mahindra & Mahindra Ltd., and remains bullish on the counter.

The brokerage maintains an 'equal-weight' call on Tata Motors, saying that the upcoming launch of the Harrier EV and Sierra EV in the third quarter are key catalysts to watch.

HSBC expects a rate cut of 25 basis points by the Reserve Bank of India on Friday, and believes inflation is likely to trend below target.

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

• Maintained 'equal-weight' rating with a target price of Rs 715, implying an upside potential of 1.4%.

• Recently launched the Harrier EV built on its new Active Plus platform, targeting the premium electric SUV segment.

• The upcoming launch of the Harrier EV and Sierra EV in the third quarter are key catalysts to watch.

• The Harrier ICE model currently sells about 5,000 units per quarter; it remains to be seen how much the EV variant will add to this volume.

• Maintained 'overweight' rating with a target price of Rs 3,668.

• Shifts in consumer preferences are driving increased demand for SUVs.

• Management plans to launch two battery electric vehicles and internal combustion engine SUVs in calendar year 2026.

• Longer-term absolute earnings before interest and tax from BEVs could be in line with that of ICE vehicles.

• M&M expects mid-to-high teens growth in utility vehicle segment and aims for 85,000 unit production capacity by the end of fiscal 2027.

• Maintained 'overweight' rating with a target price of Rs 449, implying an upside potential of 15%.

• For the solar engineering, procurement, and construction segment, third-party orders are expected to be completed in fiscal 2026.

• The company has locked in its entire solar manufacturing capacity, with projected margins of approximately 20%.

• Targets solar production of 3.7 GW in the current fiscal.

• Maintained 'overweight' rating with a target price of Rs 1,431, implying an upside potential of 16%.

Management Takeaways:

• Expects fiscal 2026's revenue growth in the high single digits.

• Ebitda growth anticipated in double digits.

• Aims for mid to high single digit volume growth.

• Household insecticide segment expected to grow at mid to high single digits.

• New categories are expected to grow at mid-teens.

• Management remains open to acquisition opportunities to drive growth and expand portfolio.

• Expects a 25 basis points rate cut by the RBI.

• Inflation is likely to trend below target.

• Lower inflation to aid income and fiscal revenue.

• Financial year 2027 estimates are to determine the extent of the rate cut.

The "6 Stars" (Core Holdings)

• Stocks: Mahindra & Mahindra, HDFC Bank, Bharti Airtel, Trent, Tata Consultancy Services, and Power Finance Corporation.

• These represent Macquarie’s core, long-term conviction portfolio.

• The list has marginally underperformed the MSCI India index since inception, mainly due to TCS’ weaker performance.

• No changes were made to this list in the latest update.

• Returns since inclusion: Bharti Airtel (7%), Power Finance Corp (4%), Trent (1%).

The "6 Hitters" (Tactical Plays)

• Stocks: Bharat Electronics, Reliance Industries, GAIL, Shriram Finance, Larsen & Toubro, and Life Insurance Corp.

• This list focuses on medium-term tactical opportunities.

• It has delivered a 14% gain since the last update, driven by strong gains in BEL (40%) and a rebound in RIL (13%).

• L&T was added for its strong order flows, and LIC was added due to attractive valuations.

• Ultratech Cement and NTPC were removed from this list.

The "6 Rising Stars" (Path to 2x Returns)

• Stocks: Delhivery, Aditya Birla Capital, Uno Minda, Indian Railway Catering and Tourism Corporation, Lemon Tree Hotels, and Devyani International.

• These are high-conviction, high-growth ideas expected to potentially double in value over 2–3 years.

• This list has been the standout performer with an average gain of 24% since inclusion.

• Top performers include Delhivery (+55%) and Aditya Birla Capital (+35%).

• Lemon Tree Hotels and Devyani International each returned 9%, while Uno Minda and IRCTC returned 19% and 10%, respectively.

• No changes were made to this list in the latest update.

• Maintained 'overweight' rating with a target price of Rs 1,800.

• JPMorgan notes that FY26 demand is expected to be weak due to a macroeconomic slowdown and AI-led technology deflation.

• Infosys is facing pricing pressure and weak discretionary IT spending, which could constrain near-term growth.

• The company’s focus remains on maintaining 20–22% operating margins under its cost optimisation program called ‘Project Maximus’.

• Maintained 'overweight' rating with a target price of Rs 77, implying an upside potential of 13%.

• Wind installations projected at 6-7 GW in fiscal 2026, 8 GW in fiscal 2027, and 9-10 GW thereafter.

• Suzlon's Wind Turbine Generator business targets order inflows that are 1.5 times its planned execution for fiscal 2026.

• The Operations and Maintenance Services business is expected to continue increasing installations, with an Ebitda margin of approximately 40%.

Maintained 'buy' ratings on:

• Embassy Office Parks with a target price of Rs 435, implying a 14.1% potential upside.

• Brookfield India Real Estate Trust with a target price of Rs 330, indicating upside potential of 7.9%.

REIT Sector Outlook:

• Indian office REITs delivered strong distribution per unit growth of 8-15% in fiscal 2025, marking a rebound after two years of muted net asset value growth.

• HSBC expects 8-13% compound annual growth rate in DPU from fiscal 2025 to fiscal 2027.

• Growth drivers include improving occupancies, increasing marginal rents, and new asset builds and acquisitions.

• Maintained 'equal-weight' rating with a target price of Rs 1,000, implying an upside potential of 13%.

• Company has issued guided to 10% sales volume growth.

• Set to expand domestic capacity to 50 million tonnes by 2030 (currently at 34 million tonnes).

• See lower imports due to the safeguard duty.

• Supreme Court has halted the liquidation for BPSL. The company has no implications for BPSL operations.

• Maintained 'equal-weight' rating with a target price of Rs 1,855 apiece.

Management Takeaways:

• Growth is expected to be driven primarily by the retail health insurance segment.

• Motor third-party premium hikes, if approved, are expected to be muted.

• The motor insurance segment is facing market share pressure due to aggressive pricing by public sector undertakings.

• Corporate, health, and crop insurance segments could experience further growth pressure in fiscal 2026.

• Retail health insurance is expected to generate mid-teens return on equity, supporting profitability.

Leadership Rejig and Senior Management Attrition

• 2024 saw significant senior management attrition in Indian financial institutions.

• Notable moves include KVS Manian joining Federal Bank and retirements/resignations at Axis Bank (Rajiv Anand), Kotak Mahindra Bank (Shanti Ekambaram), Standard Chartered (Zarin Daruwalla), Federal Bank (Shalini Warrier), and Axis Max Life (Prashant Tripathy).

• 360One and IndusInd Bank are also searching for new leadership.

• Smaller banks and financial firms are expected to explore leadership refreshes to strengthen their management teams.

Foreign Partners and Ownership Changes

• Sumitomo Mitsui Banking Corporation is acquiring Yes Bank and taking a 5% stake in 360One.

• Reports suggest Emirates NBD may acquire IDBI Bank.

• Allianz is exiting its partnership with Bajaj and partnering with Jio Financial.

• Such ownership changes are likely to trigger leadership transitions in these institutions.

Expected Impacts of Leadership Changes

• Increased investment in retail banking, digital platforms, and technology.

• Strengthening of business teams to enhance competitiveness.

• Higher attrition rates as new management brings changes.

• Larger ESOP pools, salary hikes, and other incentives to attract and retain talent.

• Positive for talent acquisition and expertise, especially at mid-sized banks.

• Foreign direct investment inflows into the sector are expected to rise.

• Successful leadership transitions could lead to re-rating of affected financial stocks.