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.
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