Brokerage Reports: Jefferies on Newgen, HSBC on Swiggy, JPM on Indus Towers, Macquarie on Healthcare, CLSA & Morgan Stanley India Strategy

Nuvama on Zen Technologies 
Recommendation: Buy | Target Price (TP): ₹2,200 
– Zen Technologies (ZTL) sees strategic positives despite a muted H1 in terms of order inflows. 
– A stronger order book in H2FY25 and achieving its guidance of 50% revenue CAGR, 35% operating profit margin (OPM), and 25% profit after tax (PAT) margin over the next 2–3 years remain key priorities. 

Jefferies on Newgen Software 
Recommendation: Buy | Target Price (TP): ₹1,500 
– A recent ₹325 million purchase order from RBI could trigger more deals with Indian banks. 
– Post-meeting, Jefferies remains optimistic about Newgen’s growth prospects. 

HSBC on Swiggy 
Recommendation: Hold | Target Price (TP): ₹550 
– Better-than-expected execution and valuation adjustments could be upside triggers. 
– From FY24–27, Swiggy’s food delivery business is expected to grow at a 16% CAGR, while quick commerce (QC) may see a 65% CAGR. 
– EBITDA breakeven for the overall business is not anticipated before FY28. 

Macquarie on Healthcare 
– Despite solid Q2 earnings, pharma stocks have recently corrected, offering attractive entry points. 
– Top Pick: Sun Pharma 
– Hospitals delivered strong Q2 results, but existing hospital profitability remains a challenge. 
– Recommendations: 
  – Outperform (OP): Lupin, Cipla, Dr. Reddy’s,

Zydus Lifesciences, Eris 
  – Neutral: Mankind Pharma, Ipca Labs 
  – Underperform (UP): Max Healthcare, Apollo Hospitals, Alkem 

JPMorgan on Indus Towers 

Recommendation: Overweight (OW) | Target Price (TP): ₹520 

Key Takeaways from Management Meeting: 

1. Vi (formerly IDEA) plans to clear ₹35 billion in past dues by Q4FY25 or early FY26, boosting dividend possibilities. 

2. Higher tower rollouts expected in H2FY25 compared to H1FY25. 

3. Vi’s urban rollout aligns with Indus Towers’ infrastructure, minimizing fresh capex. 

4. Rural 5G rollout is still distant due to lack of use cases. 

5. Average revenue per tower (ARPT) is under pressure due to lower-cost towers and renewal discounts. 

6. Annual tower renewals are around 7–8%, with a bulk expected by FY27. 

7. No immediate debt repayment planned; excess cash will be returned to shareholders. 

Citi on Oil & Gas 

– Positive earnings recovery expected for Oil Marketing Companies (OMCs) due to higher petrol/diesel margins or government LPG compensation announcements. 

– Progress on GAIL’s tariff hike proposal and RIL’s solar module facility commissioning are key triggers. 

– Catalyst Watch: HPCL, GAIL, IOC 

– City Gas Distribution companies like IGL and MGL offer attractive medium-term opportunities, though near-term gains depend on government actions. 

Morgan Stanley India Strategy 

– India continues to be a top-performing market with strong earnings, macro stability, and domestic flows. 

– Sensex Targets: 

  – Base Case: 93,000 (14% upside by Dec 2025) 

  – Bull Case: 1,05,000 | Bear Case: 70,000 

– Sector Preferences: Overweight on Financials, Consumer Discretionary, Industrials, and Technology; underweight on others. 

– 2025 likely to be a stock-pickers’ market, with India leading among emerging markets (EMs). 

CLSA India Strategy 

– Growth remains below expectations, with economic activity showing a weak trend in October. 

– Festive consumption provided a short-term boost, but broader macro trends remain subdued. 

– Mixed early indicators for November suggest a cautious outlook. 

Macquarie India Strategy 

Key Themes for 2025: 

– Slower growth momentum, earnings fatigue, and foreign fund outflows could challenge domestic liquidity. 

– Top Buys: TCS, HDFC Bank, M&M, Sun Pharma, PFC, Delhivery 

– Underperform Calls: Tech Mahindra, Zomato, SBI, Apollo Hospitals, Avenue Supermarts, Bajaj Finance 

UBS on Bajaj Auto 

Recommendation: Sell | Target Price (TP): ₹7,900 

– Impact of recent price cuts on the Freedom 125 model is minimal. 

– November 2024 wholesale figures for the Freedom 125 fell short of expectations, with most sales coming from the top variant. 

Axis Capital on City Union Bank 

Recommendation: Buy | Target Price (TP): ₹220 

– Conservative lending strategy and strong balance sheet provide stability. 

– Asset quality has returned to pre-Covid levels, but higher investments are impacting the cost-to-income ratio. 

– Over FY24–27, loans, net interest income (NII), pre-provision operating profit (PPOP), and PAT are expected to grow at CAGRs of ~14%, 12%, 13%, and 10%, respectively.