Brokerage Views: Goldman Sachs Initiates Buy On United Spirits; Asian Paints, Tata Motors In Focus

Brokerages have shared notes on several key stocks this Monday. On Tata Motors Ltd., analysts remain cautious, with both Nuvama and UBS cutting their price targets due to concerns over weaker demand and rising discounts in its Jaguar Land Rover division.

Asian Paints Ltd., meanwhile, faces increased competition, with brokerages like Jefferies and CLSA expressing concerns over margin pressure and the competitive landscape, downgrading their outlooks for the stock.

On a positive note, Goldman Sachs has initiated coverage on United Spirits Ltd. with a 'buy' rating, citing its well-positioned portfolio and growth prospects amid the premiumisation trend, boosted by lower scotch import tariffs.

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 Monday.

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Nomura on Asian Paints

Maintain 'neutral' rating with a revised target price of Rs. 2,500.
Anticipate moderate improvement in the second half of the fiscal year ending March 2025.
Reduce earnings per share estimates by 13% for the fiscal years through March 2027.
Forecast earnings per share compound annual growth rate at 12%.
Downside risks include lower-than-expected volumes and heightened competition.

Jefferies on Asian Paints

Strongly recommend 'underperform' with a target price of Rs. 2,100, suggesting a downside of 24%.
Maintain cautious outlook due to rising competition.
Lowest margins in the past eight quarters and will review estimates after the upcoming earnings call.

CLSA on Asian Paints

Reiterate 'underperform' rating with a target price of Rs. 2,290, implying a downside of 17%.
Continue to see rising competitive intensity as Birla Opus expands footprint.
Expect an increase in rebate offers as competition with Birla Opus escalates.

Also Read: Asian Paints Share Price Falls To Over Three–Year Low As Analysts Flag Growth Concerns In Near Term

Nuvama on Tata Motors

Maintain 'reduce' rating, with a revised target price of Rs. 767 (previously Rs. 1,010), indicating a downside of 4%.
Performance impacted by revenue shortfall and higher discounts or marketing expenditures for Jaguar Land Rover (JLR).
Cut Ebitda estimates by 10–20% for the fiscal years through March 2027.
Revenue and Ebitda compound annual growth rate expected to remain flat over this period, versus prior high-growth phases.
Expect a 3% decline in JLR sales due to order book depletion and weak demand outlook.
Lower JLR’s valuation multiple from 2.5x to 2x due to these challenges.
For commercial vehicles, anticipate moderate infrastructure spending and increased competition from railways.

UBS on Tata Motors

Retain 'sell' with a target price of Rs. 780, revised from Rs. 825, indicating a downside of 3%.
JLR’s 11% volume decline resulted in a 50% drop in EBIT margins.
Expect continued risks to market optimism.
Discounting pressure on JLR is accelerating, with India’s passenger vehicle segment also seeing increased competition.

Emkay on Tata Motors

Retain 'buy' with a revised target price of Rs. 1,000, down from Rs. 1,175, indicating a 24% upside.
Quarter’s performance impacted by lower JLR margins, although JLR remains resilient amid global uncertainties.
Positive outlook driven by a reduced break-even point, solid product portfolio, and focus on profitability and cash flows.
Forecast stable demand for India’s commercial vehicle sector and continued focus on margin improvement for passenger vehicles.
Lower earnings per share growth estimates by 4–5% over the next three fiscal years, reflecting margin pressures and flat JLR volumes.

Also Read: Tata Motors Sees Target Price Cuts As JLR Margin Pressure Dims Outlook

Goldman Sachs on United Spirits

Initiate 'buy' with a target price of Rs. 1,650, up 14%.
Well-positioned to benefit from premiumisation trends in its portfolio.
India-UK trade deal reducing scotch import tariffs could support growth.
Urban consumption slowdown expected to continue in the second half of the year ending March 2025.
Expect margin expansion to 18% by the year ending March 2027.
Project earnings per share compound annual growth rate at 14%.

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Nuvama on Divi's Laboratories

Retain 'buy' rating with a revised target price of Rs. 6,830 (previously Rs. 5,740), indicating an upside potential of 15.7%.
Outlook remains optimistic for Divi's, driven by growth in:

- Custom synthesis business expansion.

- Contrast media business ramp-up.

- Commercialisation of GLP-1 in the fiscal year ending March 2026.

- Generics business, with additional opportunities from the Biosecure Act.

Jefferies on Divi's Laboratories

Retain 'hold' rating with a target price of Rs. 5,790, indicating a downside potential of 1.8%.
Struggling generics business may weigh on overall growth momentum.
Limited upside potential given high valuation.
Maintain positive outlook on custom synthesis.

Also Read: Divi's Labs Q2 Review: Should You Buy The Stock After Earnings? Here's What Brokerages Say

Citi on Bank of Baroda

Reiterate 'buy' with a price target of Rs. 300, implying 14% upside.
Hold a 90-day positive catalyst watch on the stock.
Improved return on assets visibility is expected to drive re-rating.
Consolidation among public sector banks has eased a significant overhang.
Recapitalisation of Rs. 7,000 crore will support growth capital.
Steady strategic progress, likely to see gradual return on equity improvements.
Well-capitalised compared to peers, with one of the highest non-performing loan coverage ratios among public sector banks.

Nomura on State Bank of India

Reiterate 'buy' rating, raising the target price to Rs. 1,050, implying a 24.6% upside.
Increased earnings per share estimates by 4–7% over the fiscal years ending March 2027, due to reduced operating expenses and higher non-interest income.
Strong loan growth and robust deposit growth, supported by a 30 basis point increase in the one-year marginal cost of funds-based lending rate.