Brokerage Views: Bull Vs Bear Case For M&M, Nuvama On HAL And More

Brokerages have Mahindra & Mahindra Ltd., GAIL India Ltd., Indian Energy Exchange Ltd. and LIC Housing Finance Ltd. among others 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.

Nomura On Hindustan Aeronautics

Nomura maintains 'buy' on Hindustan Aeronautics at Rs 4750 target, with an upside of 13%.
Q4 earnings beat was led by strong margins.
Order backlog at Rs 94,000 crore, translating to 3.3xTTM sales.
HAL’s March quarter gross margin at 63.2% likely on favorable sales mix and stage of execution.
Nomura maintains positive stance on the back of strong pipeline.
Company diversifying MRO segment into commercial aircraft maintenance.
Brokerage expects revenue/EBITDA/PAT CAGRs of 14%/11%/23% over FY23-26.

Citi Raises Target Price For M&M

Citi maintains 'buy' on M&M, but raised target price to Rs 2,730 from Rs 1,890. The stock has an implied upside of 15%.
March quarter Ebitda was ahead of estimate, though due to lower other income.
Positively surprised by management's outlook, Citi said.
FY25 volume growth guidance is 5% YoY for tractors and mid- teens for UVs
Citi increased earnings estimates to account for growth across segments.
It raised target multiple for the core business to 26x from 20x.

CLSA Downgrades M&M

CLSA downgraded Mahindra & Mahindra to 'sell' from 'outperform, with target price of Rs 2,312.
Increase in investments in SUV business indicates strong confidence.
Downgrade on the back of recent rally in the stock price.
Management highlighted their plans to increase investments in FY25-27 to Rs 37,000 crore.
CLSA believes the stock is fairly priced in after the recent rally.
Brokerage increases EPS estimates by 14.9%/14.5% for FY25/26 driven by a 50 basis points higher margin assumption for the Auto and Farm segments for FY25/26.

Nuvama On M&M

Nuvama retains its 'buy' rating on M&M with a target price of Rs 2,760 per share, implying a potential upside of 17% from the previous close.
Q4 FY24 revenue/adjusted Ebitda beat estimates.
Adjusted profit after tax grew 3% to Rs 2,040 crore, below estimates, on higher depreciation and tax rate.
Expects 14% revenue CAGR over FY24–26.
Robust growth of 15% in autos and 9% in farm segment.
Utility vehicles product portfolio to be ramped up with nine internal-combustion-engine SUVs.
Rapidly expanding capacity to meet demand.

Motilal Oswal On M&M

The brokerage maintains 'buy' on M&M with a target price of Rs 2,720 per share, implying a potential upside of 15% from the previous close.
Capital expenditure guidance significantly enhanced for next three years.
4Q FY24 beat the brokerage's estimates on all fronts.
Utility vehicles momentum and revival in tractor demand to be drivers for FY24–26.
Raised their earnings per share estimates by 6%/11% for FY25/FY26.
Maintains long-term guidance of 18% return on equity.
Implied core price to earnings stands at 24/19 times FY25E/FY26 EPS.

BofA On M&M

BoFA maintains 'neutral' with TP target price of Rs 2,480, implying an upside of 4.5%.
Company saw margin improvement in both auto and farm segments.
Strong response to 3XO, Thar 5-Door launches to drive growth.
Positive growth prospects drive better vain multiples.
Farm implement business scale up is impressive.

Also Read: M&M Shares Hit Record High On Target Price Hikes After March Results

Motilal Oswal On Biocon

Motilal Oswal maintains 'neutral' rating on Biocon with a target price of Rs 280 apiece, implying an 8% decline from the previous close.
Work-in-progress to improve business outlook across segments.
Better show in biosimilar partly offset by lower generics/research services business YoY.
Despite YoY growth in Ebitda, profit after tax declined YoY due to higher depreciation/tax outgo.
Capex would be tapered down.
Maintains 'neutral' rating on the stock as the current valuation factors in the upside in earnings.

Citi On GAIL

Citi retains 'buy' and adds the company on its 'positive catalyst watch' with a target price of Rs 230 per share. This implies a 17% upside from the previous close.
Q4 Ebitda 20% ahead of brokerage estimate.
Ebitda beat driven by gas trading segment.
Robust petchem performance drives beat.
Sequential decline in gas transmission on higher depreciation.
Strong LPG segment driven by higher volumes, better prices.
Raises its FY25-26 Ebitda estimates by 1%.

Citi On LIC Housing

Citi maintains its 'buy' on the company with a target price of Rs 770 per share, implying an 18% upside from the previous close.
Net-interest-margin expansion offsets higher opex/credit cost.
Company surprised on the NIMs expanding 15 basis points QoQ to 3.15%.
Aggressive write-offs and provisioning coverage scale-up lead to 62-bps credit cost.
Opex too came in higher due to wage revision, gratuity provision and marketing spend.
Revises earnings by 3%/2% for FY25/26.

Motilal On LIC Housing

The brokerage re-iterates 'buy' on LIC Housing after Q4 results.
PAT declined 8% year-on-year, missing estimates by 8%, due to one-offs in operational expenses and tax.
NIM expanded 15 basis points sequentially to 3.15%.
Management guided for NIM of 2.7% to 2.9% in FY25 and double-digit loan growth.
Guided for credit costs of 40 basis points, and cost-income ratio of 13-14% in FY25.
Motilal Oswal estimates RoA/RoE of 1.6%/14% in FY26.

Nuvama On Indian Energy Exchange

Nuvama maintains 'reduce' on the company with a target price of Rs 119 per share, implying a 20% downside from the previous close.
Q4 Ebitda/net profit missed brokerage estimates by 14%/4%.
Power deficit shift in volumes implies IEX needs to reinvent its products.
View limited upside despite factoring 17% volume growth in FY24–26.
Management expects 15–20% year-on-year volume growth in FY25, driven by rise in electricity demand.
IEX to lose 'business moat', in case of a shift to market coupling.

Nuvama On Crompton Greaves

Nuvama retains its 'buy' call on Crompton Greaves and raises the target price to Rs 393 per share from the earlier Rs 365 apiece, implying a potential upside of 16% from its previous close.
Electronic consumer durables faring well, with B2B lighting remaining robust.
Focus is on improving Butterfly performance, likely to recover Q2 FY25 onwards.
Company is focusing on product innovation in the ECD segment.
Crompton 2.0 remains intact, with sustainable performance ahead.

Also Read: Stock Market Today: Nifty, Sensex Register Best Week In Over Three Months

Nuvama On InfoEdge

Nuvama retains buy on Infoedge with a target price of Rs 7,050, implying an upside of 20%.
Results for quarter ended March 2024 were in-line with estimates.
Management saw initial signs of a growth revival in IT segment.
Billing by IT client saw 11% YoY growth, which is a significant improvement from revenue decline.
Billing growth to accelerate from here due to high utilisation at IT services.

Citi On InfoEdge

The brokerage maintains 'buy' on the company and revised target price to Rs 6,870 per share from Rs 6,650 apiece earlier. This implies an upside of 17% from the previous close.
Uptick in billing led by both IT and non-IT, the consultant sector was flat.
Lower losses in non-recruitment verticals were key contributors to margin expansion.
Management commentary suggests overall billings growth should improve hereon.

Nomura On Honeywell Automation

Nomura maintains 'buy' on Honeywell Automation India at Rs 53,600 target, with 12.1% upside.
Q4 sales in line, but margins missed estimates.
Revival in real estate, healthcare, hospitality to push building automation demand.
Tailwinds for automation segment over the next 12-18 months.
Company well placed to capatalise growth in renewable energy.
Nomura expects Ebitda margin to recover to 15.6% by FY26.
It expects sales/EBITDA/PAT CAGRs of 16%/23%/25% over FY24-26.
Brokerage raised P/E multiple to 60x (from 55x) on sectoral tailwinds, cyclical upturn in end user industries.