Brokerage Reports on ICICI Bank, IDFC First Bank, Interglobe Aviation, Coal India, MGL, and BEL

ICICI Bank

CLSA: Maintains an “Outperform” rating with a target price of Rs 1600. ICICI Bank had another solid quarter, showing balanced growth in assets and a slight decrease in net interest margin (NIM). Pre-provision operating profit (PPOP) grew faster than net interest income (NII) due to improved operating efficiency. Asset quality remained stable, with low credit costs at 40 basis points (bps).

Motilal Oswal (MOSL): Rates ICICI Bank as a “Buy” with a target price of Rs 1500. The bank’s well-rounded performance has strengthened its leadership. Asset quality slightly improved, and cost control was effective. Business growth was strong despite a minor 9 bps drop in NIM. Earnings per share (EPS) estimates were raised by 2.8% and 1.8% for FY25 and FY26, respectively, with a return on assets (RoA) of 2.19% and return on equity (RoE) of 17.4% projected for FY26.

Nomura: Upgrades target price to Rs 1575, keeping a “Buy” rating. ICICI Bank had an exceptional quarter, surpassing peers in loan and deposit growth while maintaining strong asset quality. Nomura raised EPS estimates for FY25-FY27 by 2-3%, anticipating lower operating expenses and a slight reduction in credit costs.

Goldman Sachs: Rates ICICI Bank as “Neutral” with a target price of Rs 1361. Despite a tough economic environment, the bank outperformed expectations in slippages and credit costs, with operational profits growing 12% year-over-year (YoY) and core PPOP 3% higher than Goldman Sachs’ estimate.

IDFC First Bank

MOSL: Maintains a “Neutral” rating with a target price of Rs 73. The bank’s PPOP was in line with expectations, but earnings were impacted by higher provisioning. Guidance for credit costs was raised to 2.2%-2.25%, with strong deposit growth and a slight 4 bps reduction in margin. Earnings estimates were cut by 18% and 5% for FY25 and FY26, with an RoA of 1.0% and RoE of 11.0% expected for FY26.

Goldman Sachs: Rates IDFC First Bank as “Sell” with a target price of Rs 64. The bank’s profit after tax (PAT) missed estimates by 71% due to higher credit costs. Asset quality deteriorated, especially in the microfinance book. While PPOP grew 28% YoY, it was down 7% quarter-over-quarter due to lower NII and non-interest income.

Interglobe Aviation

Goldman Sachs: Maintains a “Buy” rating, lowering the target price to Rs 4800. The airline’s Q2 results missed estimates with negative earnings per share (EPS) and profit before tax (PBT), despite strong revenue from better-than-expected yields. Costs were higher than anticipated due to fuel and lease expenses.

MOSL: Rates as “Neutral” with a target price of Rs 4130. Interglobe’s net loss was influenced by seasonal factors, and over 60 aircraft remain grounded due to engine issues. Management expects this to improve by FY26.

Kotak Institutional Equities: Maintains “Buy” with a target price of Rs 5200. The airline’s PBT was impacted by short-term issues, including seasonal weakness and increased fuel prices. Demand remains robust, although FY27 estimates were reduced by 10%.

Bandhan Bank

Kotak Institutional Equities: Rates “Buy” with a target price of Rs 250. Earnings grew by 30% YoY, with slippages at 3.5% and credit costs at 2%. Early indicators show resilience in the bank’s microfinance portfolio.

Nomura: Upgrades to “Neutral” with a target price of Rs 180, citing steady performance despite challenges in the microfinance sector. Loan and deposit growth were healthy, although asset quality weakened.

CLSA: Rates as “Outperform” with a target price of Rs 240. Bandhan’s asset quality is better than expected, and slippages are controlled, with recent audits providing reassurance.

Macquarie: Maintains “Outperform” with a target price of Rs 250. While PAT missed estimates due to higher expenses, lower credit costs helped. The bank targets credit costs of 1.8%-2% for FY25, with a favorable valuation.

Jefferies: Recommends “Buy” with a target price of Rs 240. Bandhan posted a strong profit growth of 30% YoY, and quality of microfinance loans remains stable due to conservative measures.

Bank of Baroda

HSBC: Rates as “Hold” with a target price of Rs 270. Strong non-core income offset pressure from NIM, fees, and provisions. Stable asset quality is expected, though credit cost normalization may affect RoA growth.

Jefferies: Recommends “Buy” with a target price of Rs 310. BoB’s profit rose 23% YoY, with loan growth at 12%. NIMs fell, impacting NII, and fee income was down 18%, but credit quality held up well.

Nomura: Maintains “Buy” with a target price of Rs 290. Strong RoA delivery and steady asset quality, although core fees were lower than expected. Projects a RoA of 1.1% and RoE of 15-16% over FY25-FY27.

Mahanagar Gas Limited

Nomura: Downgrades to “Reduce” with a target price of Rs 1250, citing weak short-term outlook and potential policy changes. Margins fell in Q2, but volume growth remained strong.

Jefferies: Recommends “Buy” with a lower target price of Rs 1740. Volumes were above estimates, although EBITDA margins were slightly below. Expects strong volume growth and raised FY25-26 estimates.

CreditAccess

Nomura: Downgrades to “Reduce” with a target price of Rs 850. The bank’s Q2 PAT fell 46% YoY, with credit costs spiking to 7%, well above expectations.

CLSA: Downgrades to “Hold,” reducing the target price from Rs 1800 to Rs 910. Q2 profit declined due to high credit costs, leading to lower growth guidance.

Coal India

Jefferies: Recommends “Buy” with a target price of Rs 570. Q2 EBITDA dropped 20% YoY, mainly due to lower-than-expected FSA realization and higher employee costs. Valuations remain attractive despite modest EPS cuts for FY25-FY27.

JSW Steel

Morgan Stanley: Maintains “Overweight” with a target price of Rs 1150. The results beat expectations due to higher volumes and controlled costs, although global subsidiaries faced headwinds.

Balkrishna Industries

Kotak Institutional Equities: Rates “Sell” with a target price of Rs 2375. Q2 EBITDA was 15% above estimates due to higher volumes and lower expenses, although demand remains weak in the EU and US.

Shriram Finance

Goldman Sachs: Recommends “Buy” with a target price of Rs 3557. Q2 met expectations, with stable asset quality and a slight ROA expansion. Guidance suggests further improvements.

HSBC: Maintains “Buy” and raises target price to Rs 3725. Q2 reinforced confidence in Shriram Finance’s operations, with no misses on key metrics.

Morgan Stanley: Rates as “Overweight” with a target price of Rs 4200. Low asset stress, strong provisions, healthy growth, and attractive valuation make it a preferred pick.

CLSA: Recommends “Outperform” with a target price of Rs 3600. Strong disbursement growth, especially in commercial vehicle and MSME segments, drove an in-line Q2 result.

Bharat Electronics Limited (BEL)

Nomura: Recommends “Buy” with a target price of Rs 363. Q2 performance beat estimates due to strong gross margins, with sustained profitability over the past five quarters.