Morgan Stanley has an 'overweight' rating on Dr Lal PathLabs Ltd. as its first quarter profit surged, beating analysts' estimates.
Nomura has Gujarat Gas Ltd. on its radar after the company announced its first quarter results. Citi Research is optimistic on Apollo Tyres Ltd.'s reducing net debt and expects Eicher Motors Ltd.'s new product launches to help volumes.
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 Friday.
Morgan Stanley On Dr Lal Path Labs
Retained an 'overweight' rating on the stock and raised target price to Rs 3,577 apiece from Rs 2,705 per share, implying a potential upside of 12% from the previous close.
Moderating competition and industry re-rating aids the view.
Superior profile versus its peers and strong execution track record.
The brokerage revised its FY25/26 EPS by 0.3%/1.8% upwards.
It also revised target multiple to 55 times June 2026 earnings (44 times previously).
Nomura On Gujarat Gas
Retained a 'reduce' rating on the stock and a target price of Rs 470 apiece, implying a potential downside of 27% from the previous close.
June quarter results below brokerage estimates on lower-than-anticipated margins.
Management cut FY25 volume growth guidance to 6-7% versus 10% earlier.
Volumes in Morbi region to be impacted in second quarter of FY25 on ceramic plant shut downs.
Lower target price due to concerns surrounding volume recovery in key Morbi region.
Citi On Apollo Tyres
Retained a 'buy' rating on the stock with a target price of Rs 570 per share, indicating a potential upside of 11.2% from the previous close.
Consolidated results slightly exceeded muted expectations, largely due to better-than-expected performance in the European Union business. However, the Indian operations underperformed expectations.
Consolidated earnings before interest, taxes, depreciation, and amortisation came in at Rs 910 crore, which was 3% above estimates despite a weaker performance in India.
Standalone Ebitda for India was Rs 630 crore, 7% below estimates.
Strong free cash flow generation and resulting debt reduction are encouraging, with net debt decreasing to Rs 2,300 crore as of the end of first quarter of FY25, from Rs 2,500 crore at the end of FY24.
The EU business has shown resilience, outperforming expectations despite raw material cost pressures. The company expects continued strong performance in this region, with gradual price increases likely to offset cost pressures.
Valuations remain attractive, with a positive outlook for the medium-to-long-term, driven by potential recovery in road-freight movement and demand for replacement truck tyres.
Nomura On Apollo Tyres
Retained a 'neutral' rating on the stock and lowered the target price to Rs 496 per share from Rs 512 apiece earlier, implying a potential downside of 3%.
Margin headwinds from rising commodity prices.
Raw material sales jumped 250 basis points QoQ, led by natural rubber prices.
Expects mid-single-digit raw material basket increase in second quarter.
Company’s strategy is to maintain profitability over market share might be negative for long term.
Earnings per share is cut from 14%/4% for FY25/26.
Citi On Eicher Motors
Retained a 'buy' rating with a target price of Rs 5,250 per share, indicating a potential upside of 14.65% from the last closing price.
June quarter FY25 results are slightly above estimates and outlook is positive.
Better product mix driving up margin.
Product launches, ramp-up of Guerrilla 450 and new dealer-inventory policy should boost volumes going ahead.
Exports outlook is cautiously optimistic.
But the brokerage trimmed earnings estimate given tempered-down volume estimates.
Cut Royal Enfield bike volume estimates by 4-6% over FY25-27E.
Increased Volvo Eicher Commercial Vehicles margin estimates and target EV/Ebitda multiple.
Nuvama On Indian Cement Industry Pricing
Maintained a 'neutral' stance on the cement sector, with JK Lakshmi Cement Ltd. as top pick.
July saw a steady decline in cement prices across regions.
Weak pricing due to poor demand on account of monsoons, delayed budget.
Prices remain stable in the first week of August.
Firms passing cost saving benefits to customers due to a high competitive intensity.
Cement pricing will remain tepid till demand picks up in third quarter of FY25, it said.
Emkay On Bharat Forge
Retained a 'buy' rating on the stock and raised target price to Rs 1,850 apiece from Rs 1,650 per share, implying a potential upside of 15% from the previous close.
Healthy profitability and a generally positive outlook all around.
Operating profit improvement led by subsidiaries.
Order win momentum sustained during the June quarter at Rs 980 crore.
Led by defence with order book at Rs 5,400 crore versus Rs 5,200 crore in the last quarter of FY24.
Expects domestic commercial vehicles to enter an up-cycle from FY26E.
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