Brokerage Views: UBS On HDFC Bank, Emkay On ITC, Citi On India Consumer And More

Brokerages have Asian Paints Ltd., HDFC Bank Ltd., ITC Ltd. and other companies on their radar. Analysts have also given their views on India's gas sector after the latest regulation by the Petroleum and Natural Gas Regulatory Board.

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 Thursday.

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Systematix On Asian Paints

Systematix maintains a 'buy' on the company with a target price of Rs 3,280 per share, implying an upside of 11% from the previous close.
Expectations of rural demand resurgence in financial year 2025.
Emphasis on dealer/influencer initiatives.
Advertising, promotional and brand building to be prioritised over price cuts.
Return on capital employed and return on equity to come off due to higher operational and capital expenditure.
Key risks include volume growth slowdown, increased competition.

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UBS On HDFC Bank

UBS maintains its 'buy' call with a target price of Rs 1,900 apiece, a 23% upside from the previous close.
Foreign headroom at 24.95% in March 24 vs 25% required.
Post March 2024, foreign investors have sold $1.1 billion of stocks in April in financial services and $3.1 billion in May across sectors.
Headroom for HDFC Bank may have increased.
Becomes a candidate for increase in adjustment factor in the August MSCI review.
May result in passive flows of $3-6 billion (eight to 17 days of average daily trading volume)
Net interest margin, return on assets profile to gradually improve over the next two years.

Emkay On ITC

The brokerage downgraded ITC to 'add' with a target price of Rs 460 per share, an upside of 6.5% from the previous close.
Near-term headwinds to limit valuations.
Downgrade on account of cigarette margin stress, demand in paper business and margin weakness and slowdown in agribusiness.
Cigarette margin compression of 60 bps year-on-year is likely for fiscal 25, recoup likely in financial year 26.
Additional pressure is likely to be from the surge in competition.
Expectations of higher tax hike in the budget to fund populist measures.

Citi On Indian Gas Sector

Preferred picks for the brokerage are GAIL (India) Ltd., Indraprastha Gas Ltd., Mahanagar Gas Ltd.
Consolidation in the compressed natural gas sector to benefit larger and experienced CGDs.
Petroleum and Natural Gas Regulatory Board's latest notice introduces new guidelines for CGD marketing exclusivity.
Regulatory withdraws September 2021 notice that states marketing exclusivity period.
Recent development helps CGDs with ongoing litigations.
New guidelines enable PNGRB to introduce competition in the sector.
Higher competition to not risk larger players- IGL, MGL.

Citi On India Consumer

Potential policy interventions to stimulate consumption/volume growth.
Highlights potential for favourable regulatory action towards liquor in Andhra Pradesh.
Believes improvement in consumption and companies self-help initiatives to accelerate volume growth.
Key Buys: Hindustan Unilever Ltd., Godrej Consumer Products Ltd., Britannia Industries Ltd., Honasa Consumer Ltd.
Key Sells: Colgate-Palmolive (India) Ltd., Dabur India Ltd. and United Breweries Ltd.
Believes any favourable policies by the government likely to hike MSP could support rural consumption.
Believes that listed players could see market share gains.

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