Market Insights: Nomura on Yes Bank and Bajaj Finance; Jefferies on SBI Card; Morgan Stanley on Bajaj Finance; Citi on Bank of Baroda

Nomura on Yes Bank:

Maintains a “Neutral” rating, Target price is set at ₹17.

Pre-Q2 update shows strong deposit growth, mainly from CASA accounts.

Expects the bank to achieve a Return on Assets (RoA) of 0.5% in FY25 and 0.8% in FY26, and a Return on Equity (RoE) of 4.5% in FY25 and 7.5% in FY26.

Although the bank’s return profile is improving, it remains significantly lower than its peers.

The stock trades at 1.4x one-year forward Book Value per Share (BVPS), which Nomura believes reflects the positive outlook.

Nomura on Bajaj Finance:

Maintains a “Neutral” rating, Target price is set at ₹7,500.

Q2 pre-quarter update shows results are broadly in line with expectations.

Key focus for Q2 will be on credit costs.

Any increase in FY25 credit cost guidance may be viewed negatively by the market, and vice versa.

Jefferies on SBI Card

Maintains a “Hold” rating, Target price is set at ₹795.

The company is expected to benefit from lower short-term interest rates, which should improve Net Interest Margin (NIM) in H2.

Spending growth is expected to remain weak in the near term.

Credit costs may rise in Q2 and stay high in the near future.

Card Customer Information File (CIF) growth could improve as stress levels ease, and corporate spending is likely to improve gradually.

Profits and RoE are expected to improve after FY25.

Concerns about asset quality in the near term could weigh on valuations.

Morgan Stanley on Bajaj Finance:

Maintains an “Overweight” rating with a target price of ₹9,000.

Assets Under Management (AUM) grew by 5.6% quarter-on-quarter, exceeding estimates.

H1 customer acquisition is annualizing at 1.7 million, significantly above the FY25 guidance of 1.3 to 1.4 million.

Expects Q2 profit after tax (PAT) to be weak due to higher credit costs and lower NIM.

The valuation is attractive, with FY26 PAT expected to grow by over 25%.

Citi on Bank of Baroda:

Opens a 90-day positive catalyst period.

Q2 global advances growth is ahead of estimates.

Expects core NIMs to remain stable, despite some pressure from overseas NIMs.

With slippages contained, credit costs are likely to settle at 50-60 basis points.

Improved recoveries are expected to further boost earnings.

Anticipates delivering a ROA of over 1%.

ICICI Securities Limited has recommended a “BUY” on Adani Energy with a target price of Rs 1318, reflecting a potential upside of 30.54% from the current price of Rs 1009.65.

Sharekhan also advises a “BUY” on ICICI Prudential Life Insurance, targeting Rs 920, indicating a 17.93% potential increase from its current price of Rs 780.15.

Sharekhan has set a target of Rs 1734 for IPCA Laboratories, suggesting a potential rise of 15.75% from its current price of Rs 1498.1.

Motilal Oswal has given a “BUY” recommendation for Jindal Steel & Power, aiming for a target of Rs 1200, which implies a potential increase of 15.42% from the current price of Rs 1039.65.

Prabhudas Lilladhar has a target of Rs 1185 for Nazara Technologies, representing a potential gain of 20.34% from its current price of Rs 984.75.