Brokerage Views: Gujarat Gas In Focus, Citi On UltraTech Cement And More

Brokerages are unimpressed with Gujarat Gas Ltd. after the state government on Friday announced plans to merge several of its key energy companies. Meanwhile, Citi expects double-digit volume growth for UltraTech Cement Ltd. and has remained bullish on the stock.

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.

Brokerages On Gujarat Gas

IIFL Securities

The brokerage maintained a 'reduce' on the stock with a target price of Rs 607 per share.
The merger exposes Gujarat Gas shareholders to riskier, volatile exploration and production and trading and pipeline businesses.
The levers for value creation is limited to cost savings.
The brokerage remained cautious as each business has its own challenges.
It said one may opt to take a "leap of faith" for value creation in the long run.

Emkay Global

The brokerage maintained 'reduce' on Gujarat Gas, at a target price of Rs 600 apiece.
It maintained 'add' on Gujarat State Petronet, with a target price of Rs 460 per share.
The exchange ratio implies issuance of 78.7 crore new GGL shares. Moreover, 53.7 crore shares will get cancelled out due to intercompany stakes.
The valuation of GSPL seems low at 5 times the current net profit run rate.
The brokerage expects merger to imply 50% earnings-per-share accretion for Gujarat Gas.

Jefferies

The brokerage maintained 'underperform' rating.
The integration of gas trading business will improve Gujarat Gas' margin profile.
The merger will increase earnings volatility for the company.
The fair value of Gujarat Gas at Rs 513 per share post scheme implies a 15% downside.

Also Read: Gujarat Gas Merger To Be Earning Positive But Here's The Catch

Citi On UltraTech Cement

Maintained a 'buy' rating on UltraTech Cement stock with a target price of Rs 13,000 per share, implying a potential upside of 16% over the previous closing.
The management expects to outpace 7-8% long-term industry demand growth.
It expects price hikes post monsoon/festive season as demand picks up.
The management is targeting Rs 300 per tonne of cost savings over the next three years.
Capacity expansion to 183.5 million tonnes per annum remains on track for fiscal 2027 as compared to the current 149.5 MTPA.
The brokerage estimates 12% volume growth on a compounded annual basis through fiscal 2024-2027.

Also Read: UltraTech Cement Secures $500 Million In Second Sustainability-Linked Loan

Motilal Oswal On Cummins India

The brokerage reiterated a 'buy', with a target price of Rs 4,300 per share, representing an upside potential of 15% from the previous closing.
The company is well positioned to benefit from revised pollution (CPCB 4+) norms.
Demand remained strong despite price hikes of 15-35% across nodes.
Exports have bottomed out and the brokerage expects improvement in coming quarters.
It expects distribution segment to report 25% CAGR over fiscal 2024-2027.
It expects revenue to grow 18% on a compounded annual basis and profit at 21% over the period.

Also Read: Cummins India Q1 Results: Profit Rises 31%, Beats Estimates

Axis Capital On GMM Pfaudler

The brokerage maintained 'buy' call on the GMM Pfaudler stock and hiked the target price to Rs 1,600 per share from Rs 1,475 apiece, implying a potential upside of 17% from the previous closing.
The management suggests the worst is behind and sees proper rebound post few quarters.
Diversification away from glass lined equipment yielding results, with access to larger market.
The global mixing market (TAM) size is $6 billion and the company's current capabilities offer access to $3 billion.
The company targets revenue of $100 million in mixing over the next 3-4 years.

Also Read: Infinity Partners Buys 9.17% Stake In GMM Pfaudler