Macquarie on ITC
Recommendation: Outperform (O-P)
Target Price (TP): ₹560
Key Insights:
Media reports suggest a potential introduction of a 35% special tax rate for cigarettes, possibly replacing the compensation cess.
Cigarettes currently attract a 28% GST and a compensation cess ranging from 5% to 36% based on length, with the longest cigarettes taxed at 36%.
If the special rate is in addition to the current cess, ITC may need to raise prices significantly (high single-digit percentage) to offset the higher tax burden.
Jefferies on Global Health (Medanta)
Recommendation: Hold
Target Price (TP): ₹1,170
Key Insights:
Bed additions are progressing well, except for delays in Indore and South Delhi.
Sequential improvement seen in the Lucknow facility, with Patna operations ramping up steadily.
Plans to spend ₹2,800 crore in capex over the next five years.
Indore delays are disappointing; the company is exploring alternative entry options.
BOFA on JSW Steel
Recommendation: Buy
Target Price (TP): ₹1,090
Key Insights:
Anti-dumping investigations are ongoing.
The company plans to reach 50 MTPA capacity entirely through brownfield expansions.
Aims to lower net debt/EBITDA to below 3x from 3.5x in Q2.
CITI on Mahindra & Mahindra (M&M)
Recommendation: Buy
Target Price (TP): ₹3,520
Key Insights:
Domestic UV sales grew 16% YoY but fell 15% MoM.
Management expects healthy reservoir levels and higher Minimum Support Prices (MSP) to support demand, though sequential growth may slow due to inventory fluctuations.
JPMorgan on KPIT Tech
Recommendation: Overweight
Target Price (TP): ₹1,900
Key Insights:
Near-term challenges are temporary, not structural.
EV/hybrid investments will continue but at a slower pace.
Funds raised through QIP will be used for strategic acquisitions.
Base case shows a potential 42% upside; bear case indicates a 10% downside.
Morgan Stanley on Gujarat Gas
Recommendation: Overweight
Target Price (TP): ₹614
Key Insights:
CNG prices were raised by ₹1.5/kg, a 2% hike.
More price hikes (3-4) could follow in the coming months unless natural gas taxes are rationalized.
Prefers GAIL and Reliance over Gujarat Gas.
BOFA on Vedanta
Recommendation: Neutral
Target Price (TP): ₹470
Key Insights:
FY25 aluminum production costs are expected to remain stable.
Oil & gas production may remain muted in the near term.
The demerger process is in the final stages, with stakeholder meetings upcoming.
Confident about meeting interest obligations through brand fees and regular dividends.
UBS on Real Estate
Recommendations:
DLF: Buy, TP ₹1,005
Prestige: Buy, TP ₹2,175
Oberoi Realty: Neutral, TP ₹2,230
Key Insights:
Residential sector is supported by multiple growth drivers, though macroeconomic softness could present short-term challenges.
Commercial real estate uncertainties due to COVID-19 have reduced.
Sees dips as buying opportunities.
Morgan Stanley on Financials
Key Insights:
RBI removed restrictions on Navi Finserv in record time (1.5 months).
If more such regulatory relaxations occur quickly, it could improve investor sentiment and reduce regulatory concerns for the group.
HSBC on Aster DM Healthcare
Recommendation: Buy
Target Price (TP): ₹550
Key Insights:
Announced a merger with Blackstone-backed Quality Care, creating one of India’s top three hospital chains.
Gains expected from scale, but synergies need more clarity.
HSBC on Bajaj Finance
Recommendation: Buy
Target Price (TP): ₹7,740
Key Insights:
Bajaj Finance and RBL Bank have stopped issuing new co-branded credit cards but will continue servicing existing ones.
FY25-27 earnings estimates are reduced by 1-2% due to lower fee and interest income from this portfolio.
Valuations are attractive at current levels.
CITI on Ashok Leyland
Recommendation: Buy
Target Price (TP): ₹260
Key Insights:
Domestic CV sales fell 4% YoY and 11% MoM in November 2024.
MHCV truck sales declined 2% YoY and 8% MoM, while MHCV bus volumes grew strongly by 33% YoY and 6% MoM.
Economy in charts
India is currently ranked fifth and has been the fastest growing economy in the past decade
India’s GDP growth for Q2 slowed to 5.4%, falling short of J.P. Morgan’s estimate of 6.4%. The deceleration was driven by subdued private consumption and sluggish investment activity. Additional contributing factors included reduced government spending, weak export performance, and lower GST collections, highlighting broader economic challenges. For the full fiscal year, GDP growth is projected to reach 6.4%.
In a significant move, India plans to revise its GDP base year from 2011-12 to 2022-23. An advisory committee comprising experts from the Reserve Bank of India (RBI) and academia will oversee the transition and enhance the statistical framework. This update aims to address concerns related to faster data dissemination and the accurate reflection of recent economic trends amidst slower growth dynamics.
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