Bajaj Finance Ltd., Ambuja Cements Ltd., and Paytm are the hottest stocks under brokerages' radar on Wednesday due to significant developments that could impact their market performance.
Bajaj Finance is in the spotlight after it announced that its profit for the second quarter rose 13% on a yearly basis to Rs 4,014 crore, led by the healthy growth in net interest income and assets under management.
Ambuja Cements, following its acquisition of Orient Cement, is expected to strengthen its growth trajectory and boost capacity targets. Brokerages are highlighting its potential to drive consolidation within the cement industry.
Meanwhile, Paytm is garnering attention after receiving NPCI approval to add new UPI users, a crucial step in revitalising its user base and improving profitability.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Wednesday.
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Morgan Stanley On Bajaj Finance
Retained 'overweight' rating with a target price of Rs 9,000 per share, implying a potential upside of 35%.
Profit after tax is better than estimates.
Change in credit cost guidance is not a significant negative.
Funding and credit costs have peaked.
New normal credit costs are expected to be in the range of 185-195 basis points.
EPS is trimmed by 1% for FY25 and FY26 estimates.
Citi On Bajaj Finance
Maintained a 'buy' rating with a target price of Rs 8,150 apiece, implying a potential upside of 23%.
Credit cost is elevated at 2.13%, with a cautious approach in certain segments.
Credit cost guidance is revised upward to 2.05% for fiscal 2025.
Risk actions have been initiated by cutting exposure to some segments.
Factoring in higher credit costs and lower assets under management growth.
Target price revised to Rs 8,150 per share, based on 4.5 times fiscal 2026 estimated non-mortgage business book value.
Also Read: Bajaj Finance Q2 Results Review - Stabilization Of Credit Cost In H2 Would Be Key: Yes Securities
Emkay On Paytm
Retained 'add' rating with a target price of Rs 750 per share, implying a potential upside of 10%.
Paytm has finally received NPCI approval for adding new UPI users.
Paves the way for re-accelerating its dwindling user base and further signalling an easing of regulatory stance.
The company's cost optimisation measures and gradual business turnaround will put it on an early path to profitability, the brokerage said.
Retained 'add' with a discounted cash flow-based target price.
Bernstein On Paytm
Maintained 'outperform' rating with a target price of Rs 600 per share, implying a potential downside of 12%.
Paytm to onboard new UPI users on its app.
Very positive development.
Development allows the platform to stem decline in monthly transacting users.
Could boost investor expectations of favourable outcomes on other regulatory decisions.
Morgan Stanley On Ambuja Cements
On Ambuja's acquisition of Orient Cement:
About 46.8% equity acquisition expected to close in 3-4 months.
Newsflow is positive for the company and the industry at large.
Expects accelerated consolidation in the cement industry to remain a key theme.
Acquisition helps Ambuja's journey to reach a 140 MT capacity target by 2028.
Citi On Ambuja Cements
On Ambuja Cement's acquisition of Orient Cement:
46.8% equity acquisition of OCL to close in 3-4 months.
Estimate transaction at EV/tonne of $100.
Rebranding should help increase OCL’s Ebitda per tonne.
Unsure about OCL's future growth based on the status of current limestone mines.
Ambuja continues delivering on growth plans, following its Penna and Sanghi acquisitions.
Citi On Zomato
Retained 'buy' rating and raised target price to Rs 310 per share, implying a 21% upside.
Does not expect significant escalation in discounts from Blinkit.
Raises top-line estimates in quick commerce.
Lowers margin estimates across food delivery and quick commerce.
Macquarie On Zomato
Maintained 'underperform' rating with a target price of Rs 100 per share, implying a 61% downside.
Second quarter estimates beat in quick commerce.
Food delivery segment lagged expectations in the September quarter.
Strong growth in gross order value and average order value, with no meaningful margin contraction supporting Blinkit's current industry position.
QIP raises concerns about overall quick commerce industry unit economics.
Limited margin of safety for company shares.
Anticipates rising competition in the quick commerce segment over the next one-two years.
Nuvama On Zomato
Retained 'buy' rating with a target price of Rs 325 (up from Rs 285), implying a 27% upside.
Expects Blinkit dark store addition to be faster than initially anticipated.
Profitability would be delayed due to higher upfront costs.
Cut FY25E/26E/27E Ebitda by 16.6%, 15.3%, and 4.7%, respectively.
Motilal Oswal On Zomato
Reiterated 'buy' rating with a target price of Rs 330, implying a 28% upside.
Viability of the "dark store model" is now beyond doubt.
Mature dark stores are already contribution margin positive.
Zomato is expected to report PAT margins of 4.7% in fiscal 2025, 8.6% in fiscal 2026, and 12.9% in fiscal 2027.
Emkay On Zomato
Maintained 'buy' rating with a target price of Rs 310, implying a 21% upside.
Lowered FY25-27E EPS by 17-26%, factoring in lower Blinkit margins and higher effective tax rate assumptions.
Positive aspects: Strong broad-based growth across segments.
Negative aspects: Profit miss and flattish Blinkit profitability.
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