Goldman Sachs: Neutral on Ambuja Cements; Citi: Sell on PNB; UBS: Sell on Ambuja Cements, Buy on Federal Bank; Nomura: Buy on Macrotech; JP Morgan on Auto and More!

Goldman Sachs on Ambuja Cements

Recommendation: Neutral, Target Price (TP) increased to Rs 640 (up from Rs 625).

Q2 Analysis: Ambuja’s Q2 volumes and realizations exceeded expectations.

Growth Strategy: The company is focusing on acquisitions and has a strong pipeline for organic expansion.

Valuation: Current stock levels seem to reflect the anticipated growth and profit improvements.

Citi on Ambuja Cements

Recommendation: Neutral, TP lowered to Rs 610.

Q2 Financials: Consolidated EBITDA stood at Rs 11.1 billion, down 15% year-on-year due to a 7% drop in realizations, although higher volumes and cost reductions provided some relief.

EBITDA per Ton: Reported at Rs 785, compared to Rs 810 in Q1 and Rs 955 a year ago.

Outlook: Revised EBITDA estimates for FY25, FY26, and FY27 down by 14%, 23%, and 16%, respectively.

UBS on Ambuja Cements

Recommendation: Sell, TP set at Rs 475.

Q2 Performance: Though Q2 EBITDA fell short of consensus by 5%, it was considered strong given the weak demand and pricing challenges faced by the industry.

Volume Growth: At 9%, Ambuja’s growth outpaced the industry and leading competitor, Ultratech.

Nomura on Macrotech

Recommendation: Buy, TP Rs 1,600.

Q2 Performance: Solid Q2 results, with expectations for an even stronger second half of FY25 due to anticipated growth in pre-sales, operational cash flow (OCF), and revenue recognition.

Nomura on FirstSource

Recommendation: Buy, TP Rs 400.

Q2 Results: Revenue exceeded expectations, with steady margins.

Growth Outlook: Raised FY25 revenue growth guidance to 19.5-20.5% from 11.5-13.5%, with a gradual margin increase expected as investments are front-loaded.

Jefferies on Sun Pharma

Recommendation: Buy, TP raised to Rs 2,150.

Q2 Results: Sales aligned with expectations, while EBITDA and PAT were higher due to reduced R&D costs.

Growth Drivers: US segment saw growth from gRevlimid and specialty products; India grew 11% led by volumes.

R&D: FY25 R&D spending outlook revised downward.

Citi on PNB

Recommendation: Sell, TP Rs 96.

Q2 Results: Achieved PAT of Rs 43 billion (higher than Citi’s estimate of Rs 36 billion), aided by treasury gains and loan recovery.

Guidance: GNPA guidance revised to 3.5-3.75% from 4%, and credit cost to 0.25-0.3% for FY25.

Motilal Oswal (MOSL) on PNB

Recommendation: Neutral, TP Rs 120.

Q2 Results: Strong quarter with significant asset quality improvement.

Credit Cost Guidance: Further reduced to 30 basis points, with strong capital adequacy (PCR at 90%).

EPS Growth: Increased EPS estimates by 8.9% for FY25 and 4.9% for FY26.

Citi on Bharti Airtel

Recommendation: Buy, TP Rs 1,950.

Q2 Results: India mobile revenue and EBITDA grew 10% and 13% QoQ, ahead of estimates, with minimal subscriber churn despite tariff hikes.

Consolidated Performance: Revenue and EBITDA exceeded estimates by 2% and 4%, respectively.

Citi on IOC

Recommendation: Buy, TP reduced to Rs 190.

Q2 Performance: EBITDA at Rs 38 billion (down 56% QoQ), below the Rs 99 billion estimate, reflecting weak refining, inventory losses, and ongoing LPG under-recoveries.

CLSA on IOC

Recommendation: Underperform, TP Rs 120.

Q2 Performance: PAT was below expectations, largely due to weak marketing margins and significant inventory losses, though a one-time provision reversal helped reported PAT.

Forecast: Lowered PAT estimates for FY25-27 by 6% to 20%.

CLSA on LIC Housing Finance

Recommendation: Upgraded to Outperform, TP cut to Rs 700.

Q2 Results: Net Interest Income (NII) and Pre-Provision Operating Profit (PPOP) fell short by 6-7%, but PAT exceeded expectations due to reduced credit costs.

Asset Quality: Stable, despite higher operational expenses affecting spreads.

UBS on Federal Bank

Recommendation: Buy, TP Rs 250.

Q2 Performance: PAT exceeded expectations, driven by lower credit costs and stable asset quality.

Loan Growth: Solid with CASA deposits up 4% QoQ.

Guidance: Bank has maintained its FY25E projections and is focused on improving net interest margins (NIM).

Citi on Federal Bank

Recommendation: Buy, TP Rs 231.

Q2 Results: Return on Assets (RoA) of 1.28% beat estimates, supported by low credit costs and strong fee income.

Key Drivers: Growth in secured lending, improved liquidity (LCR at 115%), and rising high-yielding loan share boosted core NIMs.

Bernstein on REC

Recommendation: Outperform, TP Rs 653.

Q2 Results: Improved asset quality, NIM, and returns, with loan growth on track.

Positive Development: Increased bids for the KSK Mahanadi power plant, one of India’s largest stressed assets.

Outlook: Bernstein is optimistic about lenders in India’s power sector.

Bernstein on PB Fintech (Policy Bazaar)

Recommendation: Outperform, TP Rs 1,720.

Focus: Investors are watching for updates on its new ventures, especially in healthcare and HMO.

Market Position: Insurers are seeing strong sales growth, supporting Policy Bazaar’s volume growth.

Nomura on BPCL

Recommendation: Buy, TP raised to Rs 380 (up from Rs 368).

Q2 Performance: Lower results due to LPG under-recoveries, inventory losses, and lower Gross Refining Margins (GRM).

Operations: Sourcing of Russian crude at 34% and PDPP utilization at 80%.

Industry Support: Regulatory support for fuel marketing margins has been favorable for oil marketing companies.

JP Morgan on Auto Sales

Festive Demand: 2-wheeler and passenger vehicle sales rebounded during the festive season (up 8% YoY for 2-wheelers and flat for passenger vehicles).

Trend Analysis: Analysts look at cumulative data from September to November for a full picture of festive demand due to varying festival dates.

Stock Performance: Auto stocks declined 9-17% over the past month due to earlier weak demand projections, but demand is recovering.

Preferred Stocks: Focus on companies with diverse revenue bases and market-share gains, like Bajaj Auto, TVS Motor, and M&M.

Goldman Sachs on Sun Pharma

Recommendation: Maintain Sell; Target Price (TP) increased to Rs 1,600 from Rs 1,525.

Q2 Performance: The positive results are primarily driven by reduced R&D expenses.

Margin Outlook: Rising R&D costs and expenses related to the launch of Deuroxolitinib are expected to limit margin growth.

Valuation Concerns: Current valuations do not adequately reflect the various risks involved.

Jefferies on Sun Pharma

Recommendation: Maintain Buy; TP raised to Rs 2,150 from Rs 2,000.

Q2 Performance: Specialty segments continue to show strong growth momentum.

Financials: Q2 sales met expectations, while EBITDA and PAT surpassed estimates due to lower R&D expenses.

US Growth Drivers: The increase in the US market was led by higher sales of gRevlimid and the specialty segment.

R&D Guidance: The R&D outlook for FY25 has been revised downward due to delays in clinical trials.

Launch Preparedness: Sun Pharma is ready to launch Leqselvi following the resolution of its litigation and is positioned to secure more specialty deals.

HSBC on IT Sector

Analysis: A review of past US elections shows no significant correlation between the party in power and technology spending and growth for Indian IT.

Historical Trends: Over the last two decades, tech spending has remained largely unaffected by which political party is in control.

Future Outlook: While there may be a slowdown in securing large contracts before elections, this is not yet definitive.