Stock Recommendations Today: Vodafone Idea, IRCTC, Devyani International, ITC Hotels On Brokerages' Radar

Vodafone Idea Ltd., Indian Railway Catering and Tourism Corp. and Devyani International Ltd. were among the top companies on brokerages' radar on Wednesday.

Further, Bernstein said it expects further correction in small cap and mid cap stocks, which can be used as an opportunity to resurrect a dedicated strategy.

JPMorgan and CLSA have both cut the target price of Devyani International after it announced its third quarter results.

Jefferies initiated a 'buy' rating for ITC Hotels Ltd., on the back of sectoral tailwinds.

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.

• Bernstein has been cautious about small and midcap stocks, labeling them as a bubble for some time, though strong domestic flows have supported the stocks.

• Despite being down more than 15% from their peak in October last year, small and midcap indices are still at multi-year highs.

• Small caps face several risks that may lead to further correction in the market.

• As foreign outflows stop and domestic reallocation is behind, a recovery is expected to emerge in the second half of the year.

• Bernstein does not see a reason to actively bottom-fish in small and midcap stocks.

• The firm maintains a selective buy call on large caps.

• Sharp corrections in small and midcap stocks could present opportunities to revive a dedicated strategy for these stocks.

• The view is that the macroeconomic environment is bottoming out, and a selective buy approach with positive returns for Nifty remains the stance.

• Bernstein does not expect small and midcap stocks to outperform large caps.

• Kotak’s strategy focuses on understanding the behavior of retail investors, as their actions over the next few weeks and months will influence the direction of the Indian market.

• Analysis shows that the returns of retail investors have been lower than those of small and midcap indices.

• Retail investors have invested more funds at higher market levels, and it will be interesting to see whether newer investors continue to hold their investments.

• Older investors may have also invested larger sums at higher levels.

• There is a growing concern that the "breaking point" for investors could be closer than widely believed.

• Trump 2.0 tariffs are not the same as the 2018 tariffs, the brokerage said.

• The latest tariffs are applied universally without exception, meaning China may not require similar means to remain competitive in the market.

• With China’s hot-rolled coil prices near trough levels, there is limited room for further price decreases.

• The threat of increased imports from FTA countries to India is minimal, and the impact on domestic HRC prices is limited.

JPMorgan

• JPMorgan maintains an 'overweight' rating on Devyani, lowering the target price to Rs 195 from Rs 200.

• The company is expected to see gradual same-store sales growth recovery ahead, with margins having bottomed out.

• India’s same-store sales growth should improve with the recovery from external brand impact, underlying demand acceleration, and an undemanding base.

• The firm anticipates gradual improvement in ADS and margins, which should help share price performance.

CLSA

• CLSA maintained an 'outperform' rating on Devyani, lowering the target price to Rs 188 from Rs 196.

• Same-store sales growth continued its negative trend for KFC and Pizza Hut.

• Margins were in line with consensus, but average daily sales declined across the board.

• The Thailand business is expected to grow in low double digits, and three new launches are planned for first quarter of financial year 2026.

• Maintained a 'buy' rating on Neuland Labs, lowering the target price to Rs 15,850 from Rs 16,150 apiece.

• Third quarter results were weaker than expected, but the business is set to improve from FY26E onwards.

• The company is expected to see a 20%+ Ebitda CAGR over financial year 2024-2027, driven by a more profitable CMS/Specialty API mix.

• Investec maintained a 'buy' rating on Muthoot Microfin, cutting the target price to Rs 200 from Rs 260.

• The company reported a weak third quarter, with profit declining 97% year-on-year.

• While operating profit was in line with expectations, credit costs rose due to accelerated provisions and write-offs.

• AUM growth was weak, mainly due to slow disbursements, and credit costs are expected to remain elevated in fourth quarter.

• Nomura maintained a 'buy' rating on Sansera Engineering, lowering the target price to Rs 1,669 from Rs 1,892 per share.

• The company is expected to increase diversification in FY26F, with growth momentum led by non-auto sectors.

• A slowdown in domestic demand is expected to drive this diversification, but weak global demand and delayed order ramp-up has led to cuts in earnings estimates.

Macquarie

• Macquarie maintained a 'neutral' rating on Vodafone Idea, with a target price of Rs 7.

• For third quarter, the company continued to lose market share, and its performance in terms of subscribers and margins fell below estimates.

• The ongoing subscriber erosion highlights the challenges Vodafone Idea faces, with no quick solutions in sight.

UBS

• UBS maintained a 'buy' rating on Vodafone Idea with a target price of Rs 13.

• For third quarter, results were broadly in line with expectations, but the net loss was slightly worse due to higher depreciation and lower interest income.

• UBS will monitor the company’s capex plan, 5G coverage, and any potential AGR relief measures.

• Macquarie maintained an 'outperform' rating on IRCTC with a target price of Rs 900.

• For third quarter, the company showed higher margins, although volumes were milder.

• The softness in the catering business was offset by a recovery in tourism.

• Management's shift in focus towards growth in non-convenience fees is positive, and their commentary is supportive.

• Macquarie maintained an 'outperform' rating on Birlasoft with a target price of Rs 710.

• Revenue in dollar terms was down 1.5% quarter-on-quarter, and 3.9% below estimates.

• Pass-through revenue declined, and the proportion of offshore revenue increased.

• Management noted that furloughs were higher than usual in third quarter of this financial year, but they expect strong deal signings in the fourth quarter, including a new major manufacturing logo in Europe.

• Maintained an 'underweight' rating on SAIL with a target price of Rs 115.

• Third quarter results were largely in line with expectations, and adjusted for higher volumes, realisations were also in line with expectations.

• The Ebitda per ton was Rs 4,600, which was below the forecast of Rs 4,800 per ton.

• Maintained an 'underweight' rating on Berger Paints with a target price of Rs 466 per share.

• Third quarter saw good volume delivery despite a challenging market setup.

• However, the firm expects the company's derating to continue.

• Berger Paints delivered a volume growth of 7.4%, and management expects the value and volume gap to narrow to 2-2.5% in the next couple of quarters.

• Management also highlighted that Akzo’s decorative business is not a strategic fit for Berger.

• Jefferies initiates a 'buy' rating with a target price of Rs 240.

• The company is well diversified and holds the position of the no. 2 player in the listed space.

• Tailwinds from the hotel sector, along with the addition of recent new hotels, are expected to drive growth.

• The management’s strategy of focusing on management contracts will also help improve returns.

• Earnings are projected to grow at a 19% CAGR over financial year 2024-2027, which will contribute to an improvement in ROCEs, reaching 12% by financial year 2027.

• The stock currently trades at a 25%+ discount to Indian Hotel, and Jefferies believe this discount will narrow over time.