Automakers' September quarter business updates are being scrutinised by brokerages. Mahindra & Mahindra Ltd. stock has been upgraded to an 'outperform' rating by CLSA. While, Emkay and Motilal Oswal Financial Services Ltd. have shared their views on Tata Motors Ltd. after the release of Jaguar Land Rover numbers for the second quarter.
NDTV Profit tracks what brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Tuesday.
CLSA On Mahindra & Mahindra
The brokerage upgraded the stock to 'outperform' and increased the target price to Rs 3,400 per share, implying an 11% potential upside to the previous close.
Improved scale, superior mix and better pricing drove auto margins in the second quarter.
The brokerage expects better scale and average selling price given new models.
It also expects domestic tractor industry to revive.
CLSA has increased the earnings-per-share by 5% each for the current and the next fiscal.
It raised target price based on DCF model at around 26 times the price-to-earnings compared to the mean of 18 times between fiscal 2015 and 2022.
Emkay On Tata Motors-JLR Volumes
Retained 'buy' call on the stock with a target price of Rs 1,175 per share, a potential upside of 26%.
The commentary around volume rebound is encouragingly divergent from luxury peers, the firm said.
Peers have recently downgraded their outlook citing demand weakness in China.
The brokerage reaffirmed its positivity given structural improvements across operational parameters.
The company is on track for becoming net-debt free this year.
Healthy India outlook particularly in commercial vehicles amid impending cyclical recovery and strong margin uptick.
The firm reduced its EPS estimate for fiscal 2026 and 2027 by 2% on slight margin reduction.
The balance sheet is healthy with least-demanding valuations among OEMs.
Motilal Oswal On Tata Motors–JLR Volumes
The brokerage retained 'neutral' rating on Tata Motors with target price of Rs 990 apiece, an upside potential of 7%.
Jaguar Land Rover's second quarter wholesale sales declined 10% year-on-year due to supply disruptions from high-grade aluminum suppliers, which affected multiple OEMs.
Additionally, a temporary hold was placed on 6,500 vehicles in September end, primarily in the UK and Europe, to facilitate additional quality control checks.
The overall mix of most profitable RR/RR Sport and Defender models stood at 67%.
The brokerage cut its revenue, Ebitda and net profit estimates for JLR. It now stands at 6.4 billion pounds, 958 million pounds and 247 million pounds, respectively.
It expects JLR margins to remain under pressure till fiscal 2026, led by rising cost pressure and EV ramp up.
Citi On Nykaa
The firm has a 'sell' rating on parent FSN E-Commerce Ventures Ltd., with a target price of Rs 165 per share, a potential downside of 15%.
It expects revenue growth at 25% year-on-year in the second quarter. Ebitda margin is projected to rise 100 basis points on a sequential basis and 80 bps on a yearly basis.
It expects contribution and Ebitda growth at 25% and 47%, respectively.
It sees strong momentum in beauty and personal care and sustained weakness in fashion vertical.
Citi said an enterprise value-to-Ebitda of 60 times is reasonable.
Morgan Stanley's Equity Strategy
Incrementally more concerned on oil price and global growth risk to cyclical markets.
China policy easing is important but valuations have re-rated substantially.
Geopolitical risks, the US elections and 2025 policy uncertainty prime concerns.
India remains largest overweight.
Scaled back underweight China position for pan Asia/ emerging market investors to -50 bps.
Nuvama On Skipper
The brokerage initiated coverage on Skipper with a 'buy' rating and a target price of Rs 650, a potential upside of 44%.
The company's presence across the T&D ecosystem is poised for a powerful performance.
High-voltage macro tailwinds include domestic and international drivers.
The company is doubling tower capacity and is the only backward-integrated player in India. It is a niche player in pole position.
The brokerage values Skipper at 25 times its fiscal 2027 EPS estimate of Rs 26.
The key risks include execution and order award delays, sharp price movement of raw material and working capital management.
Nomura On Power Sector
The firm said India power sector drives significant growth opportunity.
The demand is driven by commercial and industrial and residential sources.
It expects a healthy growth of 7% in the next five years.
Tata Power
Nomura initiated coverage on Tata Power with a 'buy' rating and a target prices of Rs 560, seeing a potential upside of 27%.
The company is expected to deliver significant Ebitda growth of 16% till fiscal 2027 on a compounded annual basis.
It will double renewable energy capacity to 10 GW and deliver on EPC projects.
There is a sharp jump in profitability in Odisha discom.
JSW Energy
Nomura initiated coverage on JSW Energy with a 'buy' rating and a target prices of Rs 885, a potential upside of 31%.
It sees 38% Ebitda CAGR through fiscal 2027 through doubling of renewable capacity.
Significant earning visibility with 92% share tied to long-term power purchase agreements.
Large wins in green energy projects and upsides from higher utilisations and tariffs.
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