Brokerage Views: Nuvama On Life Insurers, Nomura On KEC International And More

Nuvama Research shared its outlook on life insurance players and asset management sectors on Tuesday. The comments came in the backdrop of Insurance industry performance numbers and mutual funds' inflows data released a day before. Among buzzing stocks, top brokerages are keeping KEC International Ltd., and Hindustan Construction Co. on their radar.

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

Nuvama On Life Insurers

Private life insurers’ individual annual premium equivalent grew 25% YoY, outgrowing industry’s 19% YoY.
LIC continued to underperform—clocking an APE growth of just 7.2%.
Individual APE five-year CAGR (FY20–25) is a strong 14.6% for private insurers.
Near-term challenges on margin and regulatory uncertainty on surrender values weighing.
Sectoral valuations may remain depressed until clarity emerges on regulations
Top picks in the sector are SBI Life Insurance Co. and HDFC Life Insurance Co.

Nuvama On AMCs

Active equity funds garnered all time-high net inflows of Rs 40,370 crore
Number was fuelled by continued inflows in existing schemes and a pickup in inflows through new fund offers.
Systematic-investment-plan flows continued to inch higher to Rs 20,900 crore.
Active equity assets under management increased 2.5% to Rs 31.9 lakh crore, driven by strong inflows.
Top picks are Nippon India Life AMC, CAMS and Aditya Birla Sun Life AMC.

Antique Initiates Coverage On L&T Finance

Antique initiated coverage on L&T Finance Ltd. with a target price Rs 220 apiece, implying a potential upside of 33%.
Promoter group has shown renewed vigor and placed trust in an all-round leader.
AUM growth to sustain at over 20%; structurally working on reducing credit cost.
Cyclically credit cost should go down, to slide lower and stabilise around 2.1%.
Resolution of security receipts and unwinding of residual corporate loans itself can provide 80-100 bps fillip to the return on assets.
Expect earnings CAGR to be 25% and return on equity to expand over 400 basis points to 15% over three years.

Elara Capital On Hindustan Construction

Initiates coverage with a 'buy' rating and sets the target price at Rs 63, implying a potential upside of 65% from the previous close.
Poised to reclaim lost glory; 10-year slog improves financial health.
The company is ready to flex its muscles after debt restructuring, dispute settlement and non-core asset monetisation.
Currently, 26% of hydropower capacity and 60% share of India’s civil nuclear power strengthens positioning.
Stars align for growth: debt burden starts to lessen.
Pipeline trends Rs 10,000 crore inflows in FY25; rising 15% thereafter.
Expects a standalone revenue and Ebitda compound annual growth rate of 20% each during FY24–27, with an earnings CAGR at 50%

Kotak Institutional On Indian IT

Cognizant announced acquisition of Belcan for $1.29 billion
Target is a North American engineering, research and design company.
Acquisition implies target multiple of 1.6 times the EV/sales.
Cognizant expects synergies of over $100 million within three years.
Target company has a revenue run rate of $800 million and grew at over 8% over the past two years.
This acquisition follows moves by large Indian IT peers to acquire ER&D services companies.
Competition is intensifying with the entry of large peers.

Nomura On KEC International

Nomura maintains a 'buy' with a target price Rs 960 apiece, up from Rs 598. The target price implies an upside of 18%.
Robust transmission and distribution outlook; gradual margin recovery.
Management retained FY25 order inflow/revenue growth guidance of 40%
Aim for Ebitda margin of 7.5% for FY25 vs 6.1% FY24 margin.
T&D and civil to propel order inflows
International T&D to be driven by capital expenditure in Saudi Arabia and the UAE.
Large value interconnection projects in Africa and bottoming of Bangladesh/CIS markets.
Expects revenue/Ebitda/profit CAGRs of 12%/28%/58% over FY24–27.

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