Goldman Sachs listed its top 20 picks from Indian equities, including Reliance Industries Ltd., Larsen & Toubro Ltd., Adani Ports and Special Economic Zone Ltd., Mahindra & Mahindra Ltd., UltraTech Cement Ltd., in a recent note. The brokerage said that earnings in the nation have stabilised after a decade long down cycle, and the profit pool is set to shift towards investment cyclicals, like autos, real estate, chemicals and industrials.
HSBC hikes its target price for HDFC Bank Ltd. as the lender plans a loan book sale and list HDB Financial Ltd. Meanwhile, Jefferies Institutional Equities put out a note on Piramal Pharma Ltd. with key takeaways from its investor day meeting.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Wednesday.
Goldman Sachs On Indian Equity
India is likely to be among the fastest growing economies in medium-term.
India’s earnings have stabilised after a decade long down cycle.
Mid-teen profit growth momentum may sustain towards 2030.
Estimate MSCI India’s profits to grow at 14% compound annual growth rate in the next six years.
Profit pool likely to shift towards investment cyclicals.
Investment cyclicals includes autos, real estate, chemicals and industrials.
It could see the largest rise in profit share, to become second largest profit pool with 25% profit share.
Consumer cyclicals could see the highest absolute growth.
An investment up cycle could benefit asset heavy segments like retail, restaurants, hotels.
There may be rotation in growth leadership towards power and new energy.
Financials and Healthcare which led growth recently may lag.
20 Goldman Sachs 'buy' rated stocks - Reliance Industries Ltd., Larsen & Toubro Ltd., NTPC Ltd., Mahindra & Mahindra Ltd., UltraTech Cement Ltd., Power Grid Corp., Adani Ports and Special Economic Zones Ltd., InterGlobe Aviation Ltd., Eicher Motors Ltd., Havells India Ltd., Polycab India Ltd., Ashok Leyland Ltd., Phoenix Mills Ltd., Uno Minda Ltd., Hitachi Energy India Ltd., Astral Ltd., Embassy Office Parks REIT Ltd., Kajaria Ceramics Ltd., Blue Dart Express Ltd. and Amber Enterprises India Ltd.
HSBC On HDFC Bank
Hikes target price from Rs 1,870 to Rs 2,010, implying an upside of 14%, while retaining 'buy' rating.
Media reports on sale of 3% of loan book to bring down loan-to-deposit ratio.
Bank seems to be acting on stated intentions.
Articles state that low yielding auto and mortgage loans will likely be sold.
Further sell-downs to accelerate a return to normal LDR levels.
Build in a sharp slowdown in headline loan growth over fiscal 2025-26e, LDR of 93%.
Expect a 0.5-3% cut in fiscal 2025-27 EPS estimates, no changes in book value.
Increase value ascribed to HDB Financial and upgrade core multiple to 2.5x price-to-book.
Jefferies On Piramal Pharma
Maintains 'buy' with target price of Rs 260 and an upside of 20%.
Aim for twice the growth in revenue and thrice in Ebitda by fiscal 2030.
Revenue growth achievable led by contract development and manufacturing organisation contracts.
Expects operating leverage and improvement in return on capital employed.
Company expects net debt to Ebitda to come down to 1x by fiscal 2030 from 3.4x in fiscal 2024.
Expects Ebitda to increase by 4-10% on stronger margins.
CLSA On Oil And Gas
Expect a retail fuel price cut after Oct. 5.
Believe government may also raise excise duty on auto fuels.
Hike in excise duty to bring down breakeven price for diesel and petrol.
Lower than Rs 5 per litre diesel price cut to not impact Indraprastha Gas Ltd., Mahanagar Gas Ltds. prospects.
Believe diesel/petrol marketing margins have shot up to Rs 13-10 per litre.
Every Re 1 hike in excise duty to add Rs 16500/5600 crore to govt's collection on diesel/petrol.
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