1. Reliance Industries (CITI):
– Rating downgraded to ‘neutral,’ target at 2,910.
– FY24-26E EBITDA raised by 2-5%, driven by Jio, retail, and O2C.
– Recent outperformance prompts a balanced risk/reward assessment.
– Q3 performance aligns with stronger oil & gas offsetting weaker O2C.
– Jio and retail expected to report softer sequential growth.
2. Global Oil Demand (CITI):
– Predicts 1.3 million bpd growth in global oil demand for 2024.
– Divergent projections in January from IEA, EIA, and OPEC.
– OPEC more bullish than EIA and IEA.
– OPEC anticipates decelerating oil demand growth in 2025.
– Citi expects a global oil surplus of 1.2 million bpd in 2025.
3. Hindustan Unilever (Nuvama):
– Target set at 3,105 with a ‘buy’ rating.
– Q3FY24 performance below estimates due to sales miss and price cuts.
– 2% YoY volume growth, gross margin up by 400bps.
– FY24E/25E EPS cut by 5%/3%.
4. Ultratech Cement (CITI):
– Target at 11,700 with a ‘buy’ rating.
– Expects a 7-8% fall in hybrid coal costs over the next 6 months.
– Anticipates a 12% volume CAGR through FY23-26.
– Third capacity expansion phase adds 21.9mtpa.
– Capacity CAGR of 10% expected over FY24-27.
5. Ultratech Cement (Motilal Oswal):
– Target set at 12,000 with a ‘buy’ rating.
– Optimism about demand growth prospects.
– Expects capacity utilization to improve to 80-85% in Q4.
– Positive demand trends in most markets, except the North region.
– FY24/25 capex at Rs 9,000 crore on expansion plans.
– Estimates a volume CAGR of 10% over FY23-26.
6 .Morgan Stanley’s on Hindustan Unilever:
– Equal-weight rating maintained with a target price reduction to ₹2464 from ₹2502.
– Highlights the dominance of urban demand over rural demand, premium over mass, and MT (Modern Trade) over GT (General Trade).
– Reports a modest 2% volume growth.
– Indicates negative pricing trends observed in Q3, expected to persist into Q4.
– Forecasts a decline in corporate market share in the coming months, with a projected recovery to current levels by December 2024.
7. HSBC on HUL:
– Current Market Price (CMP): ₹2,565.
– Downgrades to “Reduce.”
– Q3 performance falls below expectations.
– Weak earnings not solely attributed to macro weakness.
– Target revised to ₹2,350.
– Home Care & BPC, once growth engines, show muted growth.
– Outlook uncertain, with lackluster growth.
8. MS on Ultratech:
– CMP: ₹10,094.
– Maintains “Overweight” stance.
– Q3 EBITDA surpasses both their estimate and consensus.
– Earnings even better after adjusting for higher ‘Other’ Opex.
– Expects demand recovery to support prices.
– Foresees margin improvement due to demand recovery and fuel cost moderation.
– Target set at ₹12,000.
9. MS on HUL:
– CMP: ₹2,565.
– Maintains “Equal-Weight.”
– Target adjusted to ₹2,464.
– Reports earnings below estimates for the fourth consecutive quarter.
– Weaker topline growth attributed to lower volume growth.
– Negative pricing growth remains a challenge.
– Recovery elusive, with potential market share loss.
10. CLSA on Reliance Industries:
– CMP: ₹2,735.
– Maintains “Buy” with a target of ₹3,060.
– EBITDA/EBIT in line; capex at an 8-quarter low.
– Operating leverage evident; Retail EBITDA/sqf rises for the second quarter.
– 5G rollout completion highlighted as a significant development.
– Gas production drives an earnings beat.
11. MS on Reliance Industries:
– CMP: ₹2,735.
– Maintains “Overweight.”
– Reports the slowest investment capex in two years.
– Points to the completion of 5G rollout.
– Target set at ₹2,821.
– Gas production contributes to an earnings beat.
12. MS on RBL Bank:
– CMP: ₹265.
– Maintains “Underweight” with a target of ₹250.
– Core PPoP grows 40% YoY, exceeding estimates by 3%.
– Strong YoY growth in NII and fee income.
– Margin misses estimates by 8 bps.
– Anticipates continued strong retail loan growth.
– Remains underweight due to a gradual profitability recovery and reduced FY24 & F25 estimates based on one-time contingency provisions.
13. CLSA on Paytm:
– CLSA upgraded Paytm’s parent company, One 97 Communications, from “outperform” to “buy” after the December quarter results.
– The new price target is ₹960, up from ₹925, though still 55% below the IPO price of ₹2,150.
– Paytm’s losses narrowed, and EBITDA improved in Q4.
– CLSA sees diversification as Paytm scales back BNPL, with further diversification expected in the March quarter.
– Paytm aims to offset BNPL losses through new revenue streams, cost reduction, and promoting higher-ticket personal loans.
– Paytm plans to add 5-6 partners in the next six months, but scaling high-ticket personal loans may pose challenges.
– Despite difficulties, CLSA raised its core EBITDA estimate for Paytm by 3% for FY 2025-2026.
