Brokerage Views: Jefferies On Tata Motors, Citi On Vedanta And More

Citi Research has Cummins India Ltd. on its radar following its broadly inline first quarter results, which were driven by strong domestic demand and margin expansion.

Similarly, Jefferies India Pvt. has noted that FY25 earnings downgrades have outpaced upgrades across various sectors. It also maintained a 'buy' on Tata Motors Ltd., as it sees the newly launched Curvv SUV filling key gaps in the mid-sized segment.

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 Thursday.

Jefferies On Tata Motors

Retained a 'buy' rating on the stock and a target price of Rs 1,330 apiece, implying a potential upside of 30% from the previous close.
Tata's new mid-sized sport utility vehicle Curvv fills key gap in portfolio, it said.
Tata's new SUV focused strategy has fuelled market share recovery to 14% between FY24 and first quarter of FY25.
Expects 3.6K/5K units per month from Curvv in FY25/26.
Expect 11%/19% Ebitda/EPS compound annual growth rate over FY24-27.

Nomura On Tata Motors

Retained 'buy' rating on the stock and a target price of Rs 1,303 apiece, implying a potential upside of 27% from the previous close.
⁠Tata Curvv breaks all key barriers for electronic vehicle adoption, it said.
Latest launch significantly reducing range anxiety among consumers.
Current market size of the segment at 50,000 units per month.
⁠Curvv could gain 10-20% market share in segment, once all variants are launched, it said.
Key monitorables include reviews, customer feedback and Internal Combustion Engine pricing.
Passenger vehicle segment growth in second half of FY25 to be better than first half on account good monsoons, upcoming festive season.

Citi On Vedanta

Reiterated a 'buy' rating and raised the target price to Rs 430 per share from Rs 425 apiece, implying a potential downside of 0.53%.
Confidence in Vedanta India's balance sheet due to effective liability management at the holding company level.
Reduced pressure on cash flows and resilience in commodity prices.
Expected completion of the demerger process, with final National Company Law Tribunal approval awaited.
Estimates dividend yield at over 15% for FY25.
Limited hedging for FY25 output in zinc and aluminium, with management cautious about current London metal exchange prices.

Segment Highlights And Outlook

Aluminium segment: Significant Ebitda growth driven by higher LME prices and lower cost of production. Near-term pressure from increased Chinese production, but a bullish outlook for 2025 and 2026.
Zinc segment: Strong performance with Ebitda growth due to higher prices and cost efficiency. Management maintains a positive production outlook. Bullish outlook due to supply constraints and smelter margin pressures, with estimated price at $2,900/t in second half of FY25.
Oil and gas segment: Managing natural decline in production through investments, with expected production improvements in the latter half of the fiscal year.

Also Read: Vedanta Eyes $4 Billion Cash Flow In FY25, Remains On Deleveraging Path

Jefferies On Equity Strategy

Results of 128 companies were analysed.
FY25 earnings downgrades were more than earnings upgrade.
⁠Downgrades for lending financials, consumer discretionary, cement and chemical.
⁠Upgrades for consumer staples, pharma generics, capital market companies and real estate.
Key positives include improved outlook for information technology companies and firming up of rural demand.
Nifty's Earnings Per Share flat throughout the earnings season.

Also Read: All You Need To Know About FII Positions Going Into Trade On Aug. 8

Citi On Aditya Birla Fashion And Retail

Retained a 'sell' rating on the stock and raised target price to Rs 260 apiece from Rs 220 per share, implying a potential downside of 19.5% from the previous close.
Consolidated loss of Rs 1,615 million, higher than Citi's estimate of Rs 1,193 million.
Revenue miss of 7% and Ebitda miss of 3% due to higher-than-expected interest cost (Rs 2.2 billion vs Rs 1.8 billion estimate).
Consolidated revenue at Rs 34.3 billion, up by 7% year-on-year.
Demand trends continue to remain weak, with standalone revenue flat YoY and only 2% YoY growth in consolidated revenue excluding TCNS Clothing Co.
Ebitda at Rs 3.6 billion, up by 23% YoY, with Ebitda margin expanding by 131 basis points to 10.5% (compared to Citi estimate of 10.0%).
Margin expansion driven by lower markdowns, cost control, and rationalisation of stores.
Net debt increased to ~Rs 35 billion in Q1 (from Rs 28.6 billion in Q4).
Margin expansion expected to continue with lower discounting, better cost control, and rationalisation of less profitable channels/stores.
Expects nearly 25 new Pantaloons stores, mostly opening in the second half.
Positive profitability anticipated for TCNS Clothing Co. in the second half.
Double-digit revenue CAGR expected for Lifestyle brands over the next five years.

Also Read: Aditya Birla Fashion Q1 Results: Loss Widens To Rs 215 Crore, Revenue Up 7%

Citi On Cummins India

Maintained a 'buy' rating on Cummins India with a target price of Rs 4,384 per share, suggesting a potential upside of approximately 16.95% from the previous close.
Company’s first quarter FY25 results were broadly in line with expectations.
Revenue stood at Rs 22.6 billion, up 4% YoY, driven by strong domestic demand.
Domestic revenue increased by 12% YoY to Rs 18.7 billion.
Exports, although down 22% YoY, showed a 13% QoQ improvement.
Ebitda grew by 39% YoY to Rs 4.2 billion, with a gross margin of 36.6%, benefiting from lower commodity prices and higher priced CPCB4 (environmentally-friendly) products.
Ebitda margin improved to 18.8%, up from 14.1% in first quarter of FY24.
Profit before tax increased by 33% YoY to Rs 5.5 billion, while recurring profit after tax also rose by 33% YoY to Rs 4.2 billion.
Management reiterates expectations of double-digit growth for FY25.
Over the medium term, the company anticipates growth at twice the rate of GDP.
Export markets are recovering, particularly in the Middle East and Africa.
The distribution business continues to grow at over 20% CAGR.
Current utilisation is at 50% on installed capacity and 90% on manned capacity.
The company has sufficient capacity to meet demand with minimal additional capital expenditure required.