Brokerage Views: Goldman Sachs, UBS On Asian Paints, Jefferies On Gold NBFCs And More

Brokerages from JPMorgan to Goldman Sachs have Asian Paints Ltd., LTIMindtree Ltd. and Bajaj Auto Ltd. on their radar, following the release of the first quarter earnings for the current fiscal year.

Further, Zen Technologies Ltd. bagged fresh 'buy' coverage from Motilal Oswal Financial Services Ltd. while Jefferies initiated 'buy' coverage on Muthoot Finance Ltd. and Manappuram Finance Ltd.

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 Thursday.

Also Read: Vedanta Could Get Up To Rs 6,741 Crore Dividend Windfall From Hindustan Zinc

Motilal Oswal Initiates Coverage On Zen Technologies

The company is a niche player in the defence simulator-based training market.
Long-term industry growth drivers in place.
Addressable markets for simulators and counter-drones in India established at ~Rs 14,000 crore and Rs 12,000 crore over five years.
AMC business will grow in line with product business over few years.
Aiming to increase exports from the current levels.
Order book of Rs 1,400 crore to grow at 37% three-year CAGR.
Expects revenue/Ebitda/profit after tax CAGR at 63%/57%/ 56% FY24-27, respectively.

Also Read: Zen Technologies May See 31% Upside, Motilal Oswal Says On Initiating 'Buy'

Citi On Eicher Motors

The brokerage maintained 'buy' with a target price of Rs 5,300 crore, implying an upside of 7.8% from the previous close.
New Royal Enfield Roadster on Sherpa 450 Platform launched.
Guerrilla 450 introductory price starting at Rs 2,39,000.
Retail starting mid-August across Europe.
The bike is launched in three variants—Analogue (base), Dash (mid-level) and Flash (top end).
Provides good upgrade option to current 350-CC Royal Enfield owners.
Could also support export volumes for the company.

Also Read: Stock Market Today: Nifty, Sensex End The Choppy Session At Record Highs As Infosys, TCS Lead

Goldman Sachs On Asian Paints

The brokerage maintained a 'neutral' rating and cut the target price to Rs 2,750 per share, a downside of 7% from the previous close.
Second consecutive quarter of revenue decline, the brokerage noted.
Employee cost increased 23% after one-off cost reversal.
Expects the festive season to face intense competition.

Also Read: Muthoot, Manappuram Finance See Jefferies Initiate 'Buy' On Better Gold-Price Leverage

UBS On Asian Paints

UBS maintained a 'buy' rating with a revised target price of Rs 3,650 per share, from Rs 3,550 apiece earlier. This implies an upside of 23% from the previous close.
Demand impacted by heatwave and elections.
Gross margin impacted due to raw material inflation and weak product mix.
Lower than anticipated margins in FY25 due to higher staff cost.

Citi On Asian Paints

The brokerage reiterated 'sell' and cut the target price to Rs 2,400 per share, from Rs 2,600 apiece. This implies a downside of 19% from the previous close.
Expects about 8% gap in volume and value near-term.
July 2024 price hike was only 1% and a rural demand uptick can further hurt product mix.
Increased competitive intensity will keep margins under pressure.
Expects to see impact by Birla Opus launch in the industry.

Also Read: Asian Paints Drops To Two-Month Low As Q1 Results Disappoint

JPMorgan On Asian Paints

Rated 'neutral' and lowered target price to Rs 2,800 apiece from Rs 2,870 apiece earlier, implying a downside of 6% previous close.
Company's success in premium segments will be crucial.
Expects negative share price reaction.
Intensive competition to threaten margins.

Nomura On Asian Paints

Maintained a 'neutral' rating on the stock and slashed the target price to Rs 2,850 apiece from Rs 2,925 apiece earlier, implying a downside of 4% from previous close.
Murphy’s law is playing out; fiscal 2025 will see weak earnings growth.
First-quarter fiscal 2025 volumes growth of 7% year-on-year missed management guidance of double-digit growth.
Cut earnings per share for fiscal 2025, 2026, and 2027 to 7.8%, 6.4%, and 5.7%, respectively.
Low earnings growth due to the overhang of higher competition in the sector
Expects compound annual growth of 7% in earnings per share over fiscal 2024–2027.
Downside risks: lower than expected volumes, margins, and higher than expected competitive intensity.

Also Read: Asian Paints Q1 Results Review: Analysts Cut Target Price As Rising Costs Hit Profit

Jefferies On Asian Paints

Retained 'underperform' on the stock with a target price of Rs 2,100 apiece, implying a downside of 29% from previous close.
International revenue declined by 2%.
International profitability saw a sharp decline due to loss in Asia and the South Pacific.
Infra demand is subdued due to elections.
Cuts earnings per share estimate for fiscal 2025-2027 by 1-7%.
Valuations are around 50 times which is expensive.

Citi On Bajaj Auto

The brokerage maintained 'sell' with a target price of Rs 6,800 apiece from Rs 6,500 per share earlier, a downside of 29% from the previous close.
First quarter results ahead of estimates as product mix drives average selling price.
Management expects 6-8% volume growth in FY25.
Volume growth is expected to be higher as premium models.
PLI for EVs accrual also supported profitability.
Sharp focus on electric three-wheelers offer similar profitability as ICE 3Ws.
Lower-priced electric two-wheeler gain momentum, margins could be under pressure.

Emkay On Bajaj Auto

Maintained 'reduce' with a target price of Rs 8,300 per share from Rs 7,900 earlier, implying a downside of 14% from the previous close.
Domestic two-wheeler prospects are healthy.
Response to newly-launched CNG motorcycle needs to be watched.
Management guided for exports recovery to be gradual.
Raised FY26E earnings per share by 2.6% and sees 13% EPS CAGR FY24-27E.

Also Read: Bajaj Auto Posts Rs 978 Crore Profit In Q1, Meets Estimates

Jefferies Initiates Coverage On Muthoot Finance

Jefferies initiated coverage with a 'buy' and a target price of Rs 2,220 per share, an upside of 21% from the previous close.
Largest gold NBFC with strong franchise and healthy operating metrics.
Better leverage to improve gold finance fundamentals.
Expects loan CAGR of 17%, EPS CAGR of 19% and ROE of 19%+.

Jefferies Initiates Coverage On Manappuram

Jefferies initiated coverage with a 'buy' and a target price of Rs 270 per share, an upside of 23% from the previous close.
More diversified with gold as 49% of AUM.
Growth drivers beyond gold prices due to diversification thrust.
Leverage to gold prices is lower versus Muthoot.
Expects gold loan growth of 16% and 18% CAGR on loan book.
Value at 1.4 time price to book despite 18% ROE outlook.

Citi On Just Dial

The brokerage maintained 'sell' with a target price of Rs 950 per share, a downside of 7.8% from the previous close.
Lower employee expenses drove margin beat.
Traffic growth remains weak.
Watch for ramp-up in new initiatives (JD Xperts, JD Shopping, JD Real Estate).
Stock is expensive at 20 times ex-cash March FY26E price to earnings, according to brokerage.

Bernstein On LTIMindtree

Maintained 'market-perform' with a target price of Rs 4,800 per share, a downside of 14% from the previous close.
Modest total contract value makes growth recovery difficult in FY25.
Deal wins started to flow in revenue.
Clients starting to scale up high priority programs.
Utilisation improved above management’s band.
Noted green shoots in demand.
Clients beginning to deploy savings towards high priority transformation programs.

Nomura On LTIMindtree

Maintained 'reduce' with a target price of Rs 4,670 per share from Rs 4,640 earlier, a downside 16% from the previous close.
Growth improvement led by the resumption of certain paused projects.
Growth momentum to continue in Q2.
Flattish Ebit margin guided by management in FY25.
Not likely because of wage hikes in Q3.
Prefer Infosys Ltd. and Wipro Ltd. in the large-caps India IT services space.

Jefferies On LTIMindtree

Maintained 'underperform' with a target price of Rs 4,920 apiece, a downside 12% from previous close.
Management commentary on growth has improved.
Recent run up has baked this in.
Utilisation is at peak levels, limited scope to reduce subcontracting costs.
Pick up in hiring to impact margins.
Multiples are rich in context of inconsistency in execution.

Also Read: LTIMindtree Q1 Results: Revenue Up 2.8% QoQ, PAT rises 3.1%