Brokerage Reports: Macquarie on M&M, BofA & Goldman Sachs on M&M, Bernstein on Trent, Macquarie on TCS, Jefferies on JB Pharma, Blue Star, Astral, Go Digit

Macquarie on M&M

Macquarie has kept its “Outperform” rating for M&M, with a target price of Rs 3,441. The company had a strong Q2, and Macquarie has a positive outlook. They raised the tractor growth forecast and maintained their robust SUV growth guidance. With current demand levels, M&M might face capacity issues for ICE SUVs by FY26.

BofA on M&M

Bank of America (BofA) maintains a “Buy” rating on M&M, with a target price of Rs 3,600. M&M’s Q2 results showed a small beat, as the tractor cycle seems to be recovering. The momentum in SUV sales is expected to continue, and EV launches are on the horizon. They see potential growth opportunities within the company.

Goldman Sachs on M&M

Goldman Sachs also recommends a “Buy” on M&M, with a target price of Rs 3,600. M&M exceeded expectations in Q2, leading to an increase in tractor guidance and potential upside in SUV sales. As introductory pricing schemes phase out, they expect better margins in the automotive segment. M&M is also listed on Goldman’s APAC Conviction List.

Bernstein on Trent

Bernstein has an “Outperform” rating for Trent, with a target price of Rs 8,100. While Q2FY25 results missed expectations, the company’s growth story remains positive. Store expansion has been slow, but recovery is underway, and there was an encouraging surprise in EBITDA margins. Growth strategies include the Westside Pome, Zudio Beauty, and Zudio International ventures.

Macquarie on TCS

Macquarie maintains an “Outperform” rating on TCS, targeting Rs 5,710. The recent deal with Air France-KLM suggests an increase in demand for data modernization, which is key to enabling AI adoption. TCS aims to deliver data accessibility on the cloud quickly, reinforcing the significance of this modernization effort.

Jefferies on TBO Tek

Jefferies has initiated a “Buy” rating on TBO Tek, setting a target price of Rs 2,000. TBO, a B2B platform focused on outbound travel, shows growth through margin-accretive hotel operations and is consolidating a fragmented market. Despite moderation in global travel growth, TBO’s earnings are expected to see a CAGR of 31% over FY24-27.

Citi on Go Digit

Citi maintains a “Buy” rating on Go Digit with a target price of Rs 450, initiating a 90-day “Positive Catalyst Watch.” They anticipate growth in motor premium, as well as a favorable direct premium base, particularly with selected OEMs. Group health insurance sales are also gaining traction, benefiting from reduced competition.

Jefferies on Blue Star

Jefferies continues to rate Blue Star a “Buy,” raising its target price from Rs 1,815 to Rs 2,040. Growth in EMP and RAC volumes contributed to a 27% YoY increase, though commercial refrigeration saw some issues.

Goldman Sachs on Astral

Goldman Sachs retains a “Buy” rating on Astral with a target price of Rs 2,410. Plumbing results were in line for Q2, but weaker performance in paints and adhesives pulled results slightly lower. Pipe realizations improved 4% QoQ, boosting margins.

Jefferies on JB Pharma

Jefferies maintains a “Buy” on JB Pharma and raises the target price to Rs 2,330. Q2 was in line with expectations, with growth drivers intact. While CDMO business was muted, the company expects a stronger second half. Domestic business continues its growth, with EBITDA margin guidance staying in the 26-28% range.

Investec on Astral

Investec also rates Astral a “Buy,” lowering the target price to Rs 2,485. EBITDA missed expectations by 11%, but management’s cost containment efforts have improved profitability. They reduced volume guidance but kept their margin outlook steady.

Investec on Indian Hotels

Investec maintains a “Hold” rating for Indian Hotels, increasing the target price to Rs 742 from Rs 630. The company’s strong performance is driven by higher ARR growth. They expect margins to remain at 32-32.5% for FY26/27, with PAT growing at a 24% CAGR from FY24-27.

UBS on Cummins

UBS maintains a “Sell” rating on Cummins with a target price of Rs 2,380. Q2FY25 results surpassed consensus on topline and EBITDA. UBS expects demand and margins to normalize post pre-buy effects, with management’s outlook on growth and product mix being crucial.

Nomura on Gujarat Gas

Nomura keeps a “Reduce” rating on Gujarat Gas, with a target price of Rs 470. Results were slightly below expectations, but overall volume growth guidance remains at 7%, with unit EBITDA between Rs 5-6 per scm.