HDFC Bank Bullish: CLSA targets 2025, Morgan Stanley aims for 2110. Brokerage reports reveal insights on Bajaj Finance, L&T Tech, Gail, and Cement Sector

CLSA on HDFC Bank:
– Maintains Buy; Raises target price to ₹2025 from ₹1900.
– Trims loan growth estimate from 17%-18% to 15% due to deposit challenges.
– Cuts estimates by 3%-5% based on lower deposit and loan growth.
– Highlights good loan growth and asset quality with one-off credit costs.
– Notes weak deposit traction while reporting stable margins QoQ.

Morgan Stanley on HDFC Bank:
– Maintains Overweight with a target price of ₹2,110.
– PAT exceeds estimates by 4% due to a lower tax rate.
– Credit cost and NII growth align with expectations.
– Notes a negative impact on LCR QoQ at 110% vs. 121%, potentially delaying growth/margin improvement.
– Cuts FY25 and FY26 EPS estimates by 3% each.

– Downgrades to Hold from Buy; Reduces target price to ₹1,730 from ₹1,770.
– Highlights beat on NII but miss on fees and credit cost, along with a sharp decline in LCR.
– Cuts earnings by 5-6% for FY25/26; core earnings take a higher hit at 8% due to a ~4% cut in loan growth.
– Recognizes HDFC Bank as the strongest banking franchise in India but expects the earnings narrative to dominate in the short to medium term.

Bernstein on HDFC Bank:
– Sets a target of ₹2,200, down from an earlier target.
– Expresses disappointment in both LDR and NIM change metrics.
– Points out unchanged NIM despite higher LDR and an increase in loan to asset ratio.
– Foresees questions about the premium for steady EPS growth with another quarter of EPS decline.
– Highlights unchanged cost to income and increased provision expenses due to a one-off impact.
– Notes the bank’s decision to lower tax expenses to maintain a 2% ROA.

Citi Research on HDFC Bank:
– Sets a target of ₹2,050, down from an earlier ₹2,100.
– Recommends buying.
– Reports PAT at ₹16,370 crore, beating estimates of ₹13,900 crore.
– Highlights low visibility for growth, maxed out LCR (at 110%), and LDR (at >110%).
– Emphasizes the importance of deposit growth outpacing loan growth.
– Recognizes limited NIM expansion levers in the immediate term.
– Notes a missed branch rollout guidance (270 branches in 9M vs. estimated 800-1,000 branches in FY24).
– Considers operating leverage and benign credit cost as key to RoA stability.
– Reduces the loan growth estimate to 16% for FY25E, expecting NIMs at 3.6%.

Morgan Stanley on L&T Tech:
– Maintains Underweight with a target price of Rs 4,600.
– Despite results being a miss, management’s commentary on demand is constructive.
– Appreciates a strong deal pipeline and recent wins.
– Verticals show no sequential decline for the second consecutive quarter, providing comfort.
– Suggests potential underperformance if material growth acceleration in FY25 doesn’t occur.

Morgan Stanley on ICICI Lombard:
– Maintains Overweight with a target price of ₹1,750.
– Notes a 10-15% PAT miss due to lower capital gains.
– Management upholds a combined ratio guidance of 102% by end-FY25.
– Highlights easing competitive intensity in motor and anticipates health business growth in FY25.
– Emphasizes sustained progress as a key factor.

– Maintains Buy; Raises target price to ₹190 from ₹150.
– Believes earnings growth prospects are not fully priced in.
– Sees scope for expansion in transmission EBITDA and is actively seeking long-term deals.
– Expects gas trading EBITDA of ₹4,500 cr for FY25-26.
– Suggests lower LNG prices could aid petchem business profitability.

UBS on Bajaj Finance:
– Assumes a Sell rating with a target price of ₹6,800.
– Highlights high share in consumer finance and underappreciated competition.
– Expresses concerns about JFS’s expansion impacting consumer loans in the medium term.
– Notes the peaking quality of the customer base and underscores the importance of cross-selling for incremental growth.
– Believes competitive pressure is not fully reflected in the current pricing.

Morgan Stanley on Cement Sector:
– UltraTech: Maintains Overweight; Raises target price to ₹12,000 from ₹9,300.
– Dalmia Bharat: Maintains Overweight.
– Ambuja: Upgrades to Overweight from Equal-weight; Raises target price to ₹600 from ₹390.
– Grasim: Maintains Overweight; Raises target price to ₹2,430 from ₹1,977.
– Shree Cement: Maintains Equal-weight; Raises target price to ₹28,500 from ₹25,000.
– ACC: Upgrades to Equal-weight from Underweight; Raises TP to ₹2,400 from ₹1,650.
– Believes India’s cement industry is amid a multiyear demand upcycle.
– Acknowledges strong capacity addition but expects high utilization levels, anticipating margin expansion and industry re-rating over the next few years.

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