Brokerage Views: Citi On UltraTech, Cipla; Jefferies On Shriram Finance, IndusInd And More

Brokerages have companies like Shriram Finance Ltd. and IndusInd Bank Ltd. on the radar following the release of their earnings for the first quarter of the current financial year.

Sriram Finance reported a 19% rise year-on-year in net profit in the June quarter. IndusInd Bank profit rose 2% year-on-year to Rs 2,171 crore in the quarter ended June but missed analysts' estimates.

The brokerages also shared their view on UltraTech following its acquisition of India Cements Ltd on Sunday. The cement manufacturer's latest stake acquisition of 32.72% from the promoters of India Cements values the deal at a steep premium of $120.76 per tonne.

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 Monday.

Jefferies On Shriram Finance

The brokerage maintains 'buy' with a target price of Rs 3,475 per share, implying a potential upside of 19% from the previous close.
Net interest margin dipped slightly as expected.
The GNPA fell sequentially despite adverse seasonality.
Sees enough headroom for expanding distribution of products like gold, MSME.
Estimated 17% asset under management CAGR over FY24–27E.
The NIM should be stable.
Expects a 17% earnings-per-share CAGR.
Valuations remain stable.
Believes loan growth should hold up at 18% in fiscal 2025.
Forecasts broadly steady credit cost of 2.3% over FY25–27.

Also Read: Stocks To Watch: ACC, BEL, Hindustan Petroleum, IndusInd Bank, BHEL, Cipla, IndiGo, Star Health

Nomura On Shriram Finance

The brokerage maintains 'buy' with a target price of Rs 3,500 per share, an upside of 19.7% from the previous close.
Asset quality improves.
Expects AUM/EPS CAGR of 16%/20% over FY24– 26.
Finds current valuations of 1.7 times the FY26 book value still relatively undemanding.
Expects Shriram Finance to stand out in FY25 on a relative basis.

Also Read: Trade Setup For July 29: Nifty Poised For Continued Bullish Momentum

Morgan Stanley On Shriram Finance

The brokerage maintains 'overweight' with a target price of Rs 3,660, an upside of 25% from the previous close.
Good conditions for continued re-rating and compounding.
Favourable cyclical conditions and structural changes continue to drive healthy financial outcomes.
Valuation has re-rated materially, albeit from depressed levels.
Thinks absolute multiples relative to ROE and versus peers is appropriate.
Stock has sustainable growth, reasonable valuation and good trailing performance.

Jefferies On IndusInd Bank

The brokerage maintains 'buy' with a price target of Rs 1,750 apiece, an upside of 25% from the previous close.
Q1 FY25 softer pre-provision operating profit growth drives cut to estimates by 11–12%
Asset quality and credit costs held up better than expected.
Earnings growth should be soft in FY25 and pick up from FY26.

Kotak On IndusInd Bank

The brokerage maintains 'buy' with a target price of Rs 1,800 per share, a 28% upside from the previous close.
There is room for re-rating if operating leverage plays through and supported by stable asset quality.
The bank is making considerable investments to improve its franchise challenge of executing.
Nothing that the current discount to its frontline peers appears to be far higher than expectations.
Believes gap between positioning of bank with peers is reasonably high.

Nomura On IndusInd Bank

The brokerage maintains 'neutral' rating with a target price of Rs 1,580 apiece, an upside 12.5% from the previous close.
Builds in a 16% loan CAGR over FY24–26.
Cuts FY25–26F EPS by 3% as they factor in lower NII and fees.
Expects the company to deliver a 1.7%/14.2% RoA/RoE over FY25– 27.
Builds in credit costs at higher end of 1.3% over FY25–27.
Upside risks include lower credit costs and higher loan growth.
Downside risks include sharper moderation in margins, increase in slippage.

Citi On UltraTech Cement

Citi maintains 'buy' with a target price of at Rs 13,000 per share, an 11.5% upside from the previous close.
Latest acquisition of India Cements in line with expectations.
The acquisition provides UltraTech access to limestone reserves of over 1 billion tonnes.
Acquisition to help UltraTech consolidate position in the south.
Expects UltraTech's south capacity share to rise from 16% to 28%.
Expects the Indian cement pricing environment to be muted.
Company's current EV/tonne is at $200 vs historical peak of $250.

Emkay On UltraTech Cement

The brokerage maintains 'buy' with a price target of Rs 12,800 per share, a 9.7% upside from the previous close.
UltraTech's 33% acquisition of India Cements was done at a cost of $121 per tonne.
UltraTech's total stake in India Cements at 56% at a blended acquisition cost of $108 per tonne.
Expects UltraTech's capacity market share to double in the south, to 25% by fiscal 2027.
UltraTech India's grey cement capacity is likely to cross 200 MT by FY27.
Acquisition to help the company achieve industry-leading volume growth.

Citi On Cipla

Citi maintains 'buy' with target price of Rs 1,820 per share, an upside potential 14.8% from the previous close.
Cipla remains the top pick over Sun Pharmaceutical Industries Ltd., Torrent Pharmaceuticals Ltd.
First-quarter numbers were largely in line.
25% Ebitda margin estimate for FY25 led by sustained momentum in India branded Gx, recovery in trade Gx, launch of additional peptides, gradual ramp in lanreotide.
Refiling of gAdvair expected by calendar year 2024.
Revlimid volumes expected to be marginally higher in FY25.

Bernstein Research On SBI Cards

The brokerage maintains 'underperform' on SBI Cards & Payment Services Ltd. with a target price of Rs 600 per share, a downside of 17% from the previous close.
Further deterioration in asset quality as credit cost up 8%.
Spend growth remains weak due to sharp decline in corporate spends.
Sharp rise in credit costs drove the RoA to 1.4% with no respite anytime soon.
New card additions were down 18% YoY.

Citi On Ashok Leyland

The brokerage maintains 'buy' and raised the target price to Rs 285 per share from Rs 245 apiece earlier, an upside 15% from the previous close.
First-quarter results In line with estimates and the outlook is positive.
Prevailing industry demand momentum is better than envisaged at FY25 beginning.
Likely to perform better, given a strong product-launch pipeline.
Positive on resumption of industrial and infra growth.
Expects new orders in the bus segment.

Also Read: Stock Market Today: Sensex, Nifty Retreat From Record To End With Marginal Gains As Airtel Drag