Brokerage Views: CLSA On Airtel, Morgan Stanley On Kaynes Technology And More

Multiple brokerages, including Motilal Oswal, Emkay and Nuvama, are positive on Mahanagar Gas Ltd. following the management's commentary on natural gas inclusion under the GST regime in an analyst meeting.

JSW Steel Ltd. has also received positive commentary from Motilal Oswal on account of the brokerage's outlook on capacity expansion as well as steel demand.

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

Brokerages On Mahanagar Gas

Motilal Oswal Maintains 'Buy' At Rs 1,565 Target

Management maintains overall 6-7% volume growth target
Current APM gas allocation at 70%, shortfall met by additional high-pressure-high-temperature volumes
Full year 2025 capex guidance of Rs 1,000 crore, allocation of Rs 200 crore to its arm Unison Enviro Pvt.
Expect average growth of 7% in volume over fiscal 2024-2026.
Prefer Mahanagar Gas over Indraprastha Gas on cheaper valuation, lower EV risk

Emkay Maintains 'Buy' At Rs 1,680 Target

Management guides 5-year volume compounded average growth rate of 6-7%
Company could see margin downtick to spur volume growth
Management expects further decline in APM allocation
Current Unison Enviro Pvt. volumes at 0.13mmscmd vs 1.2mmscmd potential in 7-8 years
Management expects GST rate at 12%; to benefit stakeholders
Comments have been sought by June 2024 end on the new central excise bill

Nuvama Maintains 'Buy' At Rs 1,670 Target

Management expects Ebitda margins to normalize to Rs 9–11/scm
PNGRB withdraws common carrier status, however, is still sub judice
Management expects natural gas GST rate at 12%; to help drive volumes
New businesses implies unlocking potential over long term
Brokerage expects 6-7% volume growth in fiscal 2025.

Motilal Oswal On JSW Steel

Reiterates 'buy', target Rs 1,070; 20.5% upside potential
Capacity expansion on track; well placed to capitalize on opportunity
Domestic steel demand expected to be robust
Company well placed to capture domestic and international markets
Steel sales volumes expected to hit 30mt in fiscal 2025 from 25mt in fiscal 2024.
Ebitda/t expected to improve with higher realization and lower coal costs

Nuvama On Ceat

Maintains 'buy' with target of Rs 3,000, upside 22%
Full year 2025 volume growth likely to be in high single-digits to low double-digits
Full year 2025 exports to grow in double digits, key focus regions include Latin America, Europe, the US and Middle East
Medium-term target is to increase share of exports to 25% from 19% in fiscal 2024
Tyre realisations shall improve on premiumisation and electrification
Raw material costs shall rise 3–4% in Q1 financial year 2025 due to higher input costs
Capex is expected to be Rs 1,100 crore for fiscal 2025-2026
Revenue compounded annual growth rate likely to be 9% over fiscal 2024–2026
Aggressively targeting EV segment with platform-wins in 2W, PV and CV segments with OEMs such as Tata Motors, M&M, MG Motors, Kia
Building in revenue/earnings compounded annual growth rate of 9%/11% over fiscal 2024–2026

ICICI Securities on Ceat Analyst Meet

Upgrades to reduce from sell, target raised to Rs 2,232 from Rs 2,160
Expects slower OEM growth in FY25 due to high base effect
Better growth in replacement/exports as PV replacement market demand has remained sluggish since Covid days.
Capex to remain elevated around Rs 1,000 crore in FY25 to complete capacity additions.
CEAT aims to launch TBR tyres by Q2 FY25 and PCR by Q4 FY25 in the US market
Focus on pricing, margins and maintain double-digit RoCE close to mid-teens

Citi On Bajaj Housing

Constitutes over 27%/12%/15% of Bajaj Finance's assets under management/profit/net worth respectively.
Bajaj Finance has infused further capital of Rs 20 billion in April (at Rs 18.1 per share)
Assigning three–four times P/B to BHFL’s post-issue equity translates to 12–16% of BAF’s market cap.
Focused on prime housing.
Two-thirds of AUM is concentrated in Maharashtra (31.5%), Karnataka (23%), and Telangana (14.8%)
Fresh issue in IPO will scale up to over Rs 180 billion, providing it with growth capital

Morgan Stanley Rates Kaynes Technology As 'Overweight'

Target Rs 3,845; 15.3% potential upside
Sector tailwinds and robust backlog to drive sustainable growth in core segment
Margin is industry leading, to further expand by 100 bps in FY25.
Expects momentum to continue with top-line/PAT/CAGR of 36% and 35% (FY24–28)
Expects working capital to improve by further 10–12 days in fiscal 2025 to 70 days
Government subsidy approvals for OSAT & PCBA manufacturing is plausible

CLSA On Bharti Airtel

Maintains buy, target of Rs.1,540, upside: 8.5%
Strong India mobile growth backed by management execution is driving 562 million subscribers (406 million in India) across 16 countries.
Since 2017 the market cap has expanded 3.3 times to $100 billion.
Bharti's 3 key drivers are its high-growth scalable business, strong management and global competitive edge
Bharti's total customer base has reached 562 million, 406 million of whom are in India
Bharti management's strength is best evidenced by ARPU, which is at a 15% premium to sector leader Reliance Jio.
Management will continue to play a key role in steering strong growth and generating superior returns.
ROCE should jump 9ppt to 21% by FY27CL ranking it one of best users of capital among telcos globally
Bharti's returns are most sensitive to Arpu, and our Rs 286 forecast in FY27CL vs the CEO's Rs 300 target leaves potential for a positive surprise.
The risk of competition from RJio is behind it, and Bharti is at the forefront of mobile growth and new opportunities.
Bharti continues to offer visible growth backed by mobile tariff hikes

Nomura on HCL Tech

Maintains neutral with a target price of Rs 1,500 apiece, upside 5.9%
FY25 revenue growth guidance assumes no improvement in macro vs FY24.
First half of the current fiscal is likely to be soft, and growth is expected to pick up in the second half of FY25.
Annual productivity benefits to clients on renewals and offshoring of a large contract will lead to a around 2% constant-currency sequential decline in Q1 FY25.
In Q2 FY23, the impact of the State Street BPO business divestment will be for the full quarter.
Discretionary demand remains challenging, while cost take-out projects dominate the deal pipeline.
An improvement towards its medium-term aspiration of 19–20% needs a sharp revenue growth pickup, which is unlikely in FY25.
The focus remains on optimisation of the employee pyramid to aid in margin improvement.
HCLT notes that it remains committed to returning at least 75% of PAT to its shareholders.

Morgan Stanley On Adani Ports

Maintains 'overweight' on Adani Ports at Rs 1,517 target (8% upside)

Kolkata port: O&M contract win-

APSEZ wins five-year O&M contract for a container facility.
Company to deploy cargo handling equipment within seven months.
APSEZ sees synergies with transshipment hubs at Colombo and Vizhinjam.
Upside risks: faster-than-expected growth, strong earnings growth in logistics
Downside risks: slower growth, dilutive acquisitions, competitive tariff intensity.

Nomura On Birlasoft

Maintains 'buy' with a target price of Rs 860, upside 25%.
Demand environment remains challenging due to weak discretionary spending.
Higher volatility and uncertainty leading to delayed client decision-making and smaller deal sizes.
Intends to continue investing in capabilities and expects its margins to remain rangebound in the near term.
Company reiterated its strategy of targeting niche areas to create a differentiated positioning.
Birlasoft has made almost all the key hires in the revised organisation structure under CEO Angan Guha.
Company will be on the lookout for potential M&A opportunities to build its domain or capability.
Downside risks include weak deal wins leading to weaker-than-expected revenue growth and slow margin expansion.

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