Brokerage Views: HSBC, Nuvama On Life Insurers, Citi On Vodafone Idea And More

Brokerages Nuvama and HSBC believe that the share of private life insurers in the market has continued to increase, while industry heavyweight Life Insurance Corp. has underperformed. Bernstein, meanwhile, expects the Indian IT service providers to be on the cusp of recovery driven by Gen AI-led capex.

Meanwhile, Citi has given a 'buy' call on Vodafone Idea, citing reduced competitive intensity, even as the company faces balance sheet troubles.

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.

Citi On Vodafone Idea

The brokerage rated 'buy' with high risk and a target price of Rs 22 apiece, implying an upside of 69% over last closing price.
The company’s balance sheet leverage has remained uncomfortably high, and has worsened following the adverse verdict on the AGR dues.
Four-year moratorium on spectrum and AGR payments have provided material cash flow relief.
Completion of fundraise ensures sufficient capital for the company to reinvest.
A discernible shift in stance by market leader Jio towards monetization.
The peak of competitive intensity is now likely behind us.
The moves by Jio and Bharti Airtel to monetise 5G are a clear positive.

Also Read: Vodafone Idea Has 83% Downside, Says Goldman Sachs — Here's Why

Bernstein On IT

The brokerage maintained 'outperform' rating on Infosys and TCS.
The target price for TCS is Rs 4,600, a potential upside of 3% over lasting closing.
The target price for Infosys is Rs 2,100, a potential upside of 11% over lasting closing.
Positive for IT services as they get incremental cloud migration work.
Stabilizing and improving growth and Gen AI revenue driving meaningful increases in capex.
Cloud optimisation is no longer a meaningful headwind to growth.

Also Read: IT Services - Charting The Path To Revival; Motilal Oswal's Thematic View

Nuvama On Life Insurers

Private life insurers' annual premium equivalent, or APE, grew more than that of Life Insurance Corp. of India.
Private insurers have gained 314 basis point in individual APE market share to 68.3% so far in the current fiscal.
They have witnessed five-year compounded annual growth of 13.7%.

LIC

Continued to underperform private peers with individual APE growth of just 1% YoY.
Total APE edged up 2.2% YoY.

HDFC Life Insurance

Posted modest individual APE growth of 9.8% YoY.
Group APE stagnated.
APE market share gain if 106 bps.

ICICI Prudential

Total APE grew 20% YoY.
Group business APE has declined 15.9%.
APE market share improved by 121 bps.

Max Life

Outperformed private peers with individual APE growth of 19.7% YoY and total APE of 19.5%.
Individual APE market share up 57 bps.

SBI Life

Underperformed industry/private insurers with individual APE growth of 3.9% YoY due to higher base.
Total APE grew just 0.5% YoY.
Individual APE market share dipped 101 bps.

Bajaj Finserv

Bajaj Life’s individual APE grew 22.3% YoY.
Total APE grew 18.8%.
Individual APE market share improved by 60 bps.

HSBC On India Insurance

Industry individual APE growth moderated to 10.5% in August compared to 16.3% in July.
Private insurers total APE growth of 9% versus 18%.
Growth slowdown sharper for large insurers compared to small insurers.
Number of policies sold moderated 1% YoY for industry.
ICICI Prudential, Bajaj Allianz and Max Life reported healthy growth in individual APE.
The investment bank believes reduction in indirect taxes positive for industry growth.

Also Read: Stock Market Live: Nifty, Sensex Extend Gains For Second Day Led By Airtel, Infosys

Morgan Stanley On Dixon Technologies

The brokerage maintained 'equalweight' rating with target price of Rs 8,696, representing a potential downside of 30% over the last closing.
The company on-boarded its third large customer HP India under IT hardware PLI 2.0 scheme, following Lenovo and Acer.
The company started manufacturing for Acer, and mass production is expected to commence for Lenovo in the third quarter.
The new facility in Chennai with capex of Rs 250 crore should be ready by June next year.
The total addressable market of IT hardware is roughly Rs 80,000 crore.
Dixon targets IT hardware revenue of Rs 3,000-3,500 crore in the next fiscal.

Emkay On Gravita India

The brokerage maintained 'buy' rating on the stock with Rs 1,650 as target price, implying a downside of 25% to the previous close.
The introduction of reverse charge mechanism (RCM) for metal scrap will benefit company.
The RCM is positive for organized lead recycling market and lower cost advantage for unorganized players.
The company can now tap into large unorganized market for scrap procurement.

Also Read: SBI Life, HDFC Life Are Nuvama's Top Picks As Industry Growth Moderates