Macquarie on Hyundai India: Macquarie has initiated an Outperform rating with a target price of Rs 2,235. They believe Hyundai India deserves a higher price-to-earnings (PE) multiple compared to its competitors due to its strong portfolio and premium brand positioning. The company’s powertrain options, including support from its parent company and potential market share growth, are positive factors in the medium term. Key growth drivers include rising domestic passenger vehicle demand, new model launches, and improved margins due to a better product mix. Macquarie expects Hyundai to maintain a premium PE multiple as the market rewards consistent earnings and market share growth.
Nomura on Hyundai India: Nomura has initiated a Buy rating with a target price of Rs 2,472, citing Hyundai’s focus on style and technology. The premiumization of its models is expected to drive high-quality growth. They highlight the Indian car market’s long-term potential, as car ownership in India is still low, with only 36 cars per 1,000 people. Nomura estimates an 8% compound annual growth rate (CAGR) in volumes over FY25-27, driven by the launch of 7-8 new models and improvements in EBITDA margins from 13.1% in FY24 to 14% by FY27, thanks to cost reductions and better operational efficiency.
HSBC on Bajaj Housing Finance: HSBC has downgraded Bajaj Housing Finance with a target price of Rs 110. While the company reported healthy profit after tax (PAT) due to income from assignments and low credit costs, its core earnings were weak. HSBC expects the company’s earnings per share (EPS) growth to slow down because of reduced asset under management (AUM) growth, pressure on net interest margins (NIM), and normalized credit costs. They have cut EPS estimates by 1-4% for FY25-27.
Morgan Stanley on Bajaj Finance: Morgan Stanley is overweight on Bajaj Finance with a target price of Rs 9,000. Bajaj Housing Finance’s AUM increased 6% quarter-on-quarter, aligning with Bajaj Finance’s overall growth. PAT rose by 13% QoQ (+21% YoY) due to higher non-interest income and lower credit costs. They made slight adjustments to Bajaj Finance’s Q2 FY25 PAT forecasts.
JPMorgan on AU Small Finance Bank: JPMorgan has initiated coverage with a Neutral rating and a target price of Rs 700. They see strong potential for earnings growth over the medium term, with an estimated 34% CAGR in EPS over FY25-27, driven by robust asset growth and improvement in return on assets (ROA). However, in the near term, JPMorgan is cautious about rising delinquencies in the bank’s unsecured loans. The Fincare merger expands AU Bank’s reach but also increases its exposure to riskier unsecured loans.
Investec on 360 One: Investec has a Hold rating on 360 One with a target price of Rs 1,050. The company’s transactional income contributed to in-line operating profits, and net assets under management (ARR) inflows were stronger compared to previous quarters. However, Investec is seeking clarity on the reasons behind net outflows in alternative investment funds (AIF), the sustainability of transactional income, and the reasons for high operational expenses.
Jefferies on 360 One: Jefferies has a Buy rating on 360 One with a target price of Rs 1,350, noting strong Q2 results with a 41% year-on-year increase in pre-tax profits. Wealth management saw 44% growth, and asset management rose by 31%. Jefferies has raised their EPS estimates by 2-3%, citing robust fundraising in asset management, which offset redemptions expected to conclude by Q4.
UBS on 360 One: UBS also maintains a Buy rating with a target price of Rs 1,250, noting strong AUM growth, particularly in wealth management, where AUM rose by 45% YoY in the first half of FY25. However, they noted relatively lower retention rates in wealth management and questioned the sustainability of cost increases, although profits were in line with expectations.
Investec on City Union Bank: Investec has a Buy rating on City Union Bank with a target price of Rs 200. They noted better-than-expected performance across growth, profitability, and asset quality metrics. This is the first quarter where all three metrics showed improving trends, and Investec believes the bank is in a favorable cycle for asset quality, given the secured nature of its loans.
Macquarie on City Union Bank: Macquarie has an Outperform rating with a target price of Rs 185, noting that Q2 FY25 PAT was in line with expectations. They believe the bank’s growth engine is starting to accelerate, and they expect ROA to remain steady at around 1.5-1.6%, despite rising credit costs. Macquarie views the bank’s growth and ROA trajectory as favorable.
Jefferies India Strategy: Jefferies notes that a rise in liquidity has driven deposit growth for banks, which is now matching loan growth. The gap between deposit and loan growth is at its lowest in the past 10 quarters. With earnings downgrades in the broader market, the gap between banks’ and Nifty’s EPS growth has narrowed to 2 percentage points for FY24-26. At 14x forward PE, banks trade at a 35% discount to the Nifty, and Jefferies sees potential for a cash reserve ratio (CRR) and deposit rate cut as a trigger for banking stocks. Regulatory pressures on banks may be easing.
Goldman Sachs on Ultratech Cement: Goldman Sachs maintains a Buy rating on Ultratech Cement but has lowered its target price to Rs 11,720 from Rs 12,430. The company’s Q2 performance was weak, but management is optimistic about a recovery in the second half of the fiscal year. Price increases will be important, as competition for market share remains strong. Goldman Sachs is positive on Ultratech’s balance sheet, cost-saving initiatives, and capacity expansions.
Bernstein on Ultratech Cement: Bernstein maintains a Market-Perform rating with a target price of Rs 10,508. Despite the stock price nearly doubling since Q2 FY23, the company’s earnings per share (EPS) have remained the same. They noted weak demand, although management remains optimistic about the future. While costs are being optimized, Bernstein believes there may be limited room for further reductions. They are cautious due to upcoming supply and high valuations.
Bank of America on Ultratech Cement: BofA continues to rate Ultratech Cement as a Buy but has reduced its target price to Rs 12,300 from Rs 13,100. They believe Q2 likely marks the bottom, with recovery prospects in the second half. BofA also suggests that the worst of the profitability challenges are behind the company.
Macquarie on Ultratech Cement: Macquarie maintains a Neutral rating with a target price of Rs 11,106. Q2 results were in line with expectations, and the outlook for margins in H2 is positive. Macquarie is optimistic about demand, and they expect margins to improve as seasonal costs normalize and cement prices rise.
Nomura on Dr. Lal PathLabs: Nomura maintains a Buy rating with a target price of Rs 3,720. Despite a modest rise in seasonal demand, the company is expected to perform steadily in Q2, which is usually strong for the diagnostic industry due to an increase in acute ailments. However, the incidence of dengue, particularly in Delhi, is lower compared to last year.
Bank of America on Sapphire Foods: BofA has downgraded Sapphire Foods to Underperform from Neutral and cut the target price to Rs 330 from Rs 336. They believe the stock’s rally has outpaced the company’s medium-term business prospects, and earnings estimates may need to be revised downward. Although Pizza Hut holds a strong position in Sri Lanka, BofA has yet to see a significant business uptick.
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