Jefferies on Reliance
Rating: Maintain Buy with a target price of Rs 1700.
Outlook: The risk-to-reward for Reliance is compelling.
Refining: Expect a year-on-year improvement in Singapore Gross Refining Margins (SGP GRM) in CY25, as the supply-demand situation in refining becomes more favorable.
Jio: Jio’s strong growth in home broadband subscribers positions it well for 5G monetization.
Public Listing: Likely to see a public listing in CY25.
Retail: Retail performed well in October, but a sustained recovery could take up to two quarters.
Valuation: The current valuation implies a $57 billion valuation for Retail, which Jefferies considers pessimistic.
JPMorgan on ER&D Services
Overview: The growth premium for ER&D services compared to IT has decreased, but it’s expected to increase again next year.
Auto Sector: The weakness in the automotive sector is seen as temporary, and growth is expected to pick up next year.
Telecom: The ER&D sector’s premium will not return to previous highs due to ongoing challenges in the telecom sector.
Preferred Stocks:
KPIT Tech: Maintain Overweight with a target price of Rs 1900.
Persistent: Maintain Overweight with a target price of Rs 6100.
L&T Tech: Maintain Overweight with a target price of Rs 6300.
Cyient: Maintain Overweight with a target price of Rs 2250.
Tata Elxsi: Maintain Underweight with a target price of Rs 6400.
Tata Tech: Maintain Underweight with a target price of Rs 800.
Jefferies on Real Estate
Residential Markets: The real estate market had a strong start to the busy season, with sales in October reaching a 6-month high.
Sales Trends: Value sales are up more than 20% due to a better mix of products and pricing.
Future Outlook: Many large new launches are expected in the second half of the year, which will likely lead to strong sales.
Growth: Listed developers are expected to see pre-sales growth of around 25% for FY25, even though Q2 was weak.
Stock Picks: Prefer stocks such as Godrej Properties, Lodha, and DLF.
JPMorgan on Defence
BEL: Initiate Overweight with a target price of Rs 340.
Hindustan Aeronautics: Initiate Overweight with a target price of Rs 5135.
Mazagon Dock: Initiate Neutral with a target price of Rs 4248.
Growth Prospects: The defence sector has strong growth potential, and recent stock price corrections are seen as a buying opportunity.
Key Pick: BEL is seen as the best option for exposure to long-term growth in defence production and exports.
Kotak Securities on Emcure
Rating: Upgrade to Buy from Add, with a target price of Rs 1680.
Growth Outlook: Emcure’s organic growth is expected to improve in the second half of the year, especially due to new licensing deals with Sanofi and the consolidation of Mantra.
EPS Growth: The company is expected to see a 29% compound annual growth rate (CAGR) in EPS, driven by higher utilization, lower interest costs, and more positive outcomes.
JPMorgan on Bharti Hexacom
Rating: Maintain Overweight with a target price of Rs 1630.
Business Model: The ‘social’ impact of the business model is often overlooked.
Financial Performance: The company continues to have top operational and financial metrics.
Network Expansion: Bharti’s network expansion is not only growing its social reach but also boosting market share.
ESG: Bharti’s environmental, social, and governance (ESG) efforts are potentially underappreciated in the market.
UBS on Swiggy
Rating: Initiate Buy with a target price of Rs 515.
Growth Potential: Swiggy is well-positioned for growth, currently trading at a 35% discount compared to Zomato.
Online Food Delivery: Swiggy’s margins and scale are catching up to Zomato’s, with similar GMV (Gross Merchandise Value) growth expected from FY24-27.
Goldman Sachs on Sun Pharma
Rating: Sell with a target price of Rs 1600.
R&D and Cost Outlook: Sun Pharma has reduced its R&D guidance to 7-8% of sales due to delays in the GL0034 clinical trials, which are now expected to push into FY26.
Jefferies on Real Estate
Market Update: Residential markets saw a festive boost in October, with sales reaching a 6-month high.
Sales Growth: Value sales grew by 20%+, aided by better product mix and pricing.
Outlook: Expect good sales to help listed developers post 25% pre-sales growth for FY25.
Stock Picks: Prefer Godrej Properties, Lodha, and DLF.
Citi on L&T Finance
Rating: Buy with a target price of Rs 221.
Growth Plans: L&T Finance aims to double its book size in the next 3-4 years, expecting a 20-25% CAGR in AUM (Assets Under Management).
Credit Costs: The credit cost is expected to stabilize between 2.0-2.25%, supporting a steady return on assets (ROA) of 2.8-3.0%, despite a reduction in MFI (Microfinance) exposure.
