Jefferies on GMR Airports: Jefferies recommends buying GMR Airports with a target price of Rs 106. GMRI, through its subsidiary GNIAL, has signed a concession agreement to develop and operate Nagpur Airport in Maharashtra. Currently, the airport is relatively small, handling 2.8 million passengers in FY24, but has a 10-year CAGR of around 8%. Nagpur, however, is strategically important.
UBS on 360 One: UBS has initiated coverage on 360 One with a Buy recommendation and a target price of Rs 1,250. The company’s core asset management revenue and assets under management (AUM) are expected to grow faster than the overall business. They see improvements in profitability driven by higher operating leverage. The new business opportunities in the high-net-worth individual (HNWI) and global segments could provide additional growth. UBS expects return on equity (ROE) to increase to 32% by FY27.
Motilal Oswal (MOSL) on Oil India: MOSL recommends buying Indian Oil with a target price of Rs 720. The current price implies the standalone business is trading at seven times FY27 estimated price-to-earnings ratio. The company has a robust production growth outlook with a compound annual growth rate (CAGR) of 9% between FY24 and FY27, driven by refinery capacity expansion and new city gas distribution networks. Phase I of the IGGL project is expected to be commissioned by December 2024.
HSBC on Varun Beverages: HSBC maintains a Buy rating for Varun Beverages with a target price of Rs 780. The company’s board approved a qualified institutional placement (QIP) of Rs 75 billion, which implies a 4% dilution in equity. Varun Beverages plans to use the proceeds to repay debt, strengthen its balance sheet, and support growth. A faster return on invested capital (ROIC) is possible as the company shifts value from debt holders to equity holders.
Morgan Stanley (MS) on Varun Beverages: MS has an Overweight rating on Varun Beverages with a target price of Rs 674. The company’s board approved a QIP of up to Rs 75 billion. As of 2Q CY24, Varun Beverages had net debt of Rs 59 billion, with a debt-to-equity ratio of 0.7x and debt-to-EBITDA ratio of 1.37x. Management has indicated a net debt target of 2x EBITDA in the past.
JPMorgan (JPM) on Telecom: JPMorgan upgraded Vodafone Idea to Neutral from Underweight, raising the target price from Rs 7 to Rs 10. Bharti Airtel has an Overweight rating with a higher target price of Rs 1,920, and Bharti Hexacom’s target price has been raised to Rs 1,580. Indus Tower is rated Overweight with a target price of Rs 525, and it’s JPMorgan’s top pick in the telecom and tower companies segment. The likelihood of tariff hikes in FY27 has increased due to a lack of relief in adjusted gross revenue (AGR) and affordability concerns.
Axis Capital on Tata Tech: Axis Capital initiates coverage on Tata Technologies with a Reduce rating and a target price range of Rs 110 to Rs 950. Growth challenges persist despite some improvement in the VinFast ramp-down issue. Client concentration is expected to increase, which could reverse recent progress. Tata Tech’s valuations are high, despite underperformance year-to-date.
Goldman Sachs on Godrej Consumer: Goldman Sachs maintains a Buy rating on Godrej Consumer with a target price of Rs 1,525. Hindustan Unilever (HUL) has increased prices in its soap portfolio by 5-7%, which gives Godrej Consumer the ability to raise prices too. Since soap accounts for 35% of Godrej Consumer’s Indian business, price hikes are expected to reduce margin pressures over the next six months. Goldman Sachs expects a turnaround in earnings growth after five years of weak performance.
Bernstein on PB Fintech: Bernstein maintains an Outperform rating on PB Fintech with a target price of Rs 1,720. If PB Fintech’s plans work, the company could dominate a much larger Indian health insurance market. However, if the plan fails, Bernstein believes the downside would be limited to $100 million. While not in favor of PB Fintech’s capital allocation, Bernstein is inclined to trust management’s view that this is a one-time investment, limiting the impact on stock performance. The insurance business continues to show strong momentum.
Goldman Sachs on India Insurance: Goldman Sachs is increasingly optimistic about the life insurance sector, expecting improvements in the operating environment. Corporations have noted limited impact from new regulations, and there is potential for value of new business (VNB) growth to accelerate for private insurers. With an upcoming rate cut cycle, embedded value is likely to rise, and valuations remain attractive. HDFC Life is rated Buy with a target price of Rs 820, while SBI Life also maintains a Buy rating with a target price of Rs 2,000.
Jefferies on Job Creation: Jefferies highlights that the IT slowdown is affecting formal job creation, which has dropped to a three-year low in the organized sector as large IT companies reduce their workforce. However, outside of IT, job creation remains healthy, growing over 3%. The banking, financial services, and insurance (BFSI) sector is having a strong year, with wages up by 12% year-over-year. Jobs linked to capex in the construction sector are on the rise, and improvements in agriculture, supported by a strong monsoon, are expected to boost bottom-tier consumption.
Stay informed with our financial updates, stocks, bonds, commodities. Get global & political insights. Follow us & enable notifications for the latest updates.
