HDFC Securities has reviewed the second-quarter earnings across pharma and metal sector including Divi's Laboratories and Tata Steel. The brokerage's latest assessment reflects a mixed earnings season, with healthy loan growth, improving operating performance and business expansion supporting some companies, while margin pressures, subdued demand and regulatory concerns continue to weigh on others.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
HDFC Securities has reviewed the second-quarter earnings across pharma and metal sector including Divi's Laboratories and Tata Steel. The brokerage's latest assessment reflects a mixed earnings season, with healthy loan growth, improving operating performance and business expansion supporting some companies, while margin pressures, subdued demand and regulatory concerns continue to weigh on others.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
ALSO READ | BEL To Gain From Defence Order Pipeline? UBS Sees Attractive Risk-Reward, Raises Target Price
Divis Labs
Factoring in the strong beat in Q2, HDFC Securities has raised Divi's Labs' Ebitda by ~24/10% for FY27/28E and revised the target price to Rs 11,470, based on 43 times Q2 FY29 EV/EBITDA (implying 63x PE). The brokerage has maintained 'Add' rating on the pharma stock.
Tata Steel
The brokerage has maintained its Buy rating on Tata Steel, with a revised target price of Rs 255/share (7.5 times its FY28E consolidated EBITDA). In Q2 FY27, Tata Steel's consolidated margin further expanded to a 17-quarter high (Rs 13.3k/MT, +0.5k QoQ), driven by robust pricing gains and strong traction in the Netherlands.
Domestic sales stayed strong at +8% YoY growth, offsetting the 20% fall in the EU. Steel prices remained subdued in Q2, though they have firmed up in Q3 by ~Rs 3.5/MT QoQ in India as well as the UK. Along with higher cost transformation target for H2 FY27, this should drive the margin up in FY27E.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
