Brokerage Reports on Bharti Airtel, Indus Towers, GAIL, Bank of India, Zomato, QSRs, HCLTECH, Defense Sector, COFORGE, and Manappuram Fin

JEFFERIES ON TELECOM:

– Bharti Airtel is favorably positioned, maintaining a “Buy” rating with a target price increase to Rs 1,300 from Rs 1,085.
– Indus Towers has too much optimism priced in, marked as “Underperform” with a target price hike to Rs 160 from Rs 150.
– Emphasis on the timing of tariff hikes and VIL’s funding as key focus areas.
– Positive outlook for tariff hikes in 2024 and a steady rise in 5G adoption.
– Spectrum auction risks are deemed unlikely.

ANTIQUE ON GAIL:

– Downgraded to “Hold” from “Buy” with a target price increase to Rs 157 from Rs 133.
– Pipeline business value considered fully captured.
– Commendable turnaround in the marketing segment, but earnings likely peaked.
– Near-term challenges for petrochemicals; expansion to contribute value from FY27.
– Upside capped by valuations.

MORGAN STANLEY ON BANK OF INDIA:

– Maintains “Overweight” with a target price of Rs 13,500,000.
– Strong gross loan growth at 4.2% QoQ.
– Muted deposit growth attributed to higher excess liquidity.
– Improved domestic loans to deposits ratio at 79%.
– Positive outlook on the bank’s performance.

HSBC ON ZOMATO:

– Maintains “Buy” with a target price increase to Rs 150 from Rs 140.
– Expects relatively muted business and stock performance in 2024 after a strong 2023.
– Long-term view remains constructive, dependent on QC business progression.
– Q3 and Q4 unlikely to drive major earnings upgrades.

INVESTEC ON HCLTECH:

– Initiates a “Fast Sell” with a target price of Rs 1,335.
– Lack of near-term catalysts and limited upside risks.
– Valuation at 22.4x FY25E ahead of post-Covid averages.
– Anticipates underperformance compared to Infosys.

ANTIQUE ON DEFENSE SECTOR:

– With defense production and exports expected to reach all-time high levels in FY24, the sector is set for a strong FY25.
– Recommends “BUY” on BEL with a target price of Rs 221.
– Recommends “BUY” on HAL with a target price of Rs 3,618.
– Recommends “BUY” on BDL with a target price of Rs 2,038.

MORGAN STANLEY ON COFORGE:

– Initiates “Overweight” with a target price of Rs 7,200.
– Premium valuations with potential to sustain.
– Key catalysts include an increase in deal TCV, faster-than-expected growth, and an uptick in new grad contribution to net adds.

MORGAN STANLEY ON MANAPPURAM FIN:

– Maintains “Overweight” with a target price of Rs 210.
– Asirvad MFI IPO in abeyance by SEBI has a negative impact on investor sentiment.
– Thesis based on undervaluation using consolidated earnings, considering IPO and potential value creation.

KOTAK ON QSR:

– Demand Weakness: India’s Quick Service Restaurant (QSR) sector experiences demand weakness for five consecutive quarters, indicating a prolonged trend.

– Store Addition Moderation: Continued weakness in demand prompts a call for moderation in the addition of new stores, reflecting a cautious approach to expansion.

– Subdued SSSGs in Q3: Despite a weak base, late festive season, and the cricket world cup, the Same Store Sales Growth (SSSGs) remained subdued in Q3.

– EBITDA Estimates Adjustment: Kotak has cut the EBITDA estimates for the fiscal years 2024-2026 by a range of 5-13%, indicating a cautious outlook on the earnings performance of QSRs.

– Sapphire Foods Preference: Kotak prefers Sapphire Foods due to its perceived offering of good growth at reasonable valuations within the QSR sector.

Individual Stock Recommendations:
– Jubilant Food: Maintains a “Reduce” rating with a target price of Rs 500.
– Devyani: Maintains an “Add” rating with a target price of Rs 110.
– Restaurant Brands: Maintains a “Reduce” rating with a target price of Rs 110.
– *Sapphire*: Maintains a “Buy” rating but cuts the target price to Rs 1,640 from Rs 1,700.
– Westlife Food: Maintains a “Reduce” rating and cuts the target price to Rs 800 from Rs 845.