Brokerage Views: Nuvama On SBI, Citi On Asian Paints And More

Brokerages from Citi to Nuvama have State Bank Of India, Punjab National Bank and Asian Paints Ltd. on their radars following the release of these companies' fourth-quarter results.

NDTV Profit tracks what the brokerages are putting out on specific stocks. Here are all the top calls from the brokerages that you need to know about on Friday.

Nuvama On State Bank Of India

Nuvama reiterates the ‘buy’' rating on the State Bank of India with a target price of Rs 950 apiece.
SBI announced the strongest earnings in the sector, beating expectations on the core NIM.
The research firm is increasing FY25E/26E EPS by 14%/12% to factor in higher growth and NIM.
"Given a benign credit cycle, a RoA of 1.1%, strong growth, NIM guidance, and the new wage agreement behind it, we argue SBI should re-rate.".
Nuvama expects the State Bank of India to outperform.

Citi Research On State Bank Of India

Citi Research maintains a 'sell' rating on State Bank of India with a target price of Rs 705 apiece.
Credit growth was robust at 5% quarter-on-quarter and gained traction in corporate, besides retail. Deposit growth lagged at 3% quarter-on-quarter, and the loan-to-deposit ratio expanded by 140 basis points.
The State Bank of India needs to evaluate the RBI's draft guidelines on project financing exposure in their entirety.
It has a project financing exposure of Rs 1.25 lakh crore, to which incremental provisioning would be applicable.
Based on its back-of-the-envelope calculations, it expects incremental provisioning to be absorbed without any significant impact (even in the worst-case scenario).

Also Read: SBI Q4 Results: Profit Up 24% On Higher Other Income, Lower Provisions

Citi Research On Asian Paints

Citi Research reiterates a 'sell' on Asian Paints with a target price of Rs 2,600 apiece.
The research firm cut the FY25–26E earnings per share estimate by 1-2%.
While Asian Paints has underperformed Nifty by 31% (in the last 12 months), Citi believes it is too early to bottom fish given the uncertainty (and risk) on growth and margins (and hence the valuation).
While Birla Opus has already been launched in select markets, the research firm expects to see meaningful impact in the industry (aggression in pricing/dealer margin, branding/marketing, product acceptance, shift in market share, etc.) only by 2HFY25E.
"We believe Asian Paints (as well as other players) may try to protect market share and drive volume growth at the cost of margins, which could potentially reset the overall margins at lower levels and hurt profitability.".
The management expects double-digit volume growth and an 18–20% Ebitda margin in FY25. Citi is building 7% revenue growth (factoring price cuts and downtrading) and Ebitda margin of 19%, leading to a 5% earnings per share decline year-on-year.

Also Read: Asian Paints Declares Highest Dividend In Nearly 12 Years

Citi Research On Punjab National Bank

Citi Research maintains a 'sell' on Punjab National Bank with a revised target price of Rs 95 apiece.
Punjab National Bank delivered a profit-after-tax of Rs 3,010 crore, registering a RoA of 0.8%, primarily due to contained credit costs, higher Treasury gains and recoveries.
Citi Research revises the credit cost to 1% for FY25/26E, thereby increasing earnings estimates by 12%/3%.
Management guided for GNPA below 5% and NNPA below 0.5% for FY25 exit and expects credit costs and slippages of less than 1%.

Also Read: Punjab National Bank Q4 Results: Profit More Than Doubles On Lower Provisions

Nuvama On Vijaya Diagnostic

Nuvama Institutional Equities maintains a 'buy' on Vijaya Diagnostic, with a target price of Rs 910 apiece.
Q4FY24: Robust volume growth; impressive Ebitda margin
Expansion to pay off; poised to gain in Pune and Kolkata
Growth momentum to sustain healthy returns despite expansion
Target valuation at 50x, versus 45x earlier, rolled over to FY26.

Emkay on Escorts

The brokerage maintains 'add' with a target price of Rs 3,850 per share, an upside of 12% from previous close.
Strong export outlook backed by new product introduction.
Commencement of direct component exports to Kubota amid global sourcing shift to India .
Management guided for low-to-mid single-digit industry growth in FY25 on normal monsoons.
Raise FY25E/26E earnings per share by 2%/3% on higher other income.

Jefferies On Asian Paints

Jefferies retains 'underperform' on the company with a target price of Rs 2,200, a downside of 19% from the previous close.
Fourth quarter was an all-round miss, while the revenue fell first time in the recent past.
Margins saw sharp decline while advertising and promotional costs increased.
Rise of competition is a concern and creates uncertainty.
Valuations at ~50 times is expensive.
The brokerage trimmed EPS and lowered target PE to 40 times.

Jefferies On Bharat Petroleum

Jefferies maintains 'buy' on Bharat Petroleum and cuts target price to Rs 730 per share, an upside of 23% from the previous close.
Q4 Ebitda was 30% below Jefferies estimates.
Q4 miss driven by weaker refining segment.
Lower gross refining margins on narrowing Russian crude discounts
Diesel/Petrol marketing margins at Rs 3/7.6 per liter.
Expects better profitability among peers in FY25/26.
The brokerage raised FY25/26 earnings by 7%/14%.

HSBC On Tata Power

HSBC downgrades the company to 'reduce' with a target price of Rs 300 per share, downside of 31% from the previous close.
Reported earnings and commentary imply early signs of stagnation.
Execution is largely beyond the company’s control and investors could be disappointed.
Slower execution of pump storage project and slower government reforms will be key catalysts.
Updated their earnings estimates and valuation to factor in lower coal prices.

Citi On India

Citi upgraded India to 'overweight'.
The overall Nifty target for March 2025 stands at 23,900, indicating approximately a 7% upside potential.
Key overweight sectors include PSU Utilities & Defence, Industrials, and Banks/Insurance, while key underweight sectors include Consumer Discretionary, IT Services, and Metals.
Consumption trends are likely to persist in a "k-shaped" manner.
Capex activity is under scrutiny with elections being a significant factor to watch
While there's notable momentum in public capex, private capex is gradually improving.
Downgraded China to Neutral after a solid run, but acknowledged upside risks over the near-term