Brokerage Views: Nomura On IndusInd, Citi On M&M, UBS On Consumer Durables And More

UBS and Motilal Oswal share their outlook on Indian consumer durables, pegging the sector to hit $20 billion in fiscal 2030.

UBS initiates coverage on KEI Industries Ltd. and Polycab India Ltd. with potential upside of 41% and 27%, respectively. Emkay remains positive on Kalpataru Projects International Ltd., while Citi maintains 'buy' on Bharat Petroleum Corp.

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.

UBS On India Consumer Durables

Expects the current $8 billion segment to be worth $20 billion in fiscal 2030.
Shifting the global supply chain and incumbents' sizeable capacity should lift export revenue from $2 billion in fiscal 2024 to $5 billion in fiscal 2030.
Revenue and Ebitda compound annual growth rates for UBS's cable and wire coverage are expected to rise from 20% to 25% in fiscal 2024–2028.
Favourable supply-demand dynamics to benefit industry leaders.
Top-line and margin expansions have led to a re-rating for the cables and wires segment.
Valuations in line with the broader market and seemingly low near-term de-rating risks.

Motilal Oswal On India Consumer Durables

Overweight stance on staple companies owing to favourable risk-reward dynamics and anticipated volume recovery.
Maintains cautious stance on discretionary stocks; and positive view on jewellery companies.
Expect that the volume improvement trajectory for staples will continue in fiscal 2025.
Volumes aided by stable retail inflation, a healthy progress of the monsoon season and government’s budgetary allocation towards boosting the rural economy.
Paints weak discretionary demand and the changing competitive landscape are adversely affecting growth.
Margins of innerwear companies were affected by increased discounts and volatile raw material prices.
Liquor companies demand faced challenges despite the seasonality due to election-related restrictions and a lack of approvals for interstate transfers.
For quick-service restaurants pace of recovery is expected to be slow, which will likely keep operating margins under pressure
Optimistic about the jewellery sector and anticipate a continued rapid transition in consumer buying habits from informal or local to formalised channels.
Top picks: HUL, GCPL, Dabur, Kalyan Jewellers and Titan.

Also Read: Stock Market Today: Sensex, Nifty End At Over Two-Week High Led By Finance, Tech Shares

UBS On KEI Industries

The brokerage initiated 'buy' with a target price of Rs 6,150, implying an upside of 40.8% from the previous close.
Highest presence among peers in cables and wires segment.
Sees scope for market share gains in branded housing wires and cables.
Believes ramp up of branded wires to drive returns and cash generation.
Stronger balance sheet and improving brand strength to help expand product range.
Expect topline and Ebitda CAGRs of 22% and 31% during fiscals 2025 to 2027.
Estimate earnings CAGR of 31% between fiscals 2024 to 2027.
Downside risks include slower domestic infrastructure creation, and delays in capex.

UBS On Polycab India

The brokerage initiated 'buy' with a target price of Rs 8,550, implying an upside of 27% from the previous close.
Major beneficiary of electrification infrastructure creation.
Presence in 40% of the domestic electrification market, robust competitive positioning.
Distribution-led export business model offers incremental growth potential.
Growth-levered business model, highest investment among peers.
Led by capacity expansion, ramp up in ad spends and B2B focus.
Significant room to grow addressable market revenue share; second largest to Havells.
Fast-Moving Electric Goods consumer pull is key, expect profitability at 5%.
Forecast revenue and earnings growth of 20% and 23% respectively in fiscals 2024 to 2027.
Value Cable and Wire Segment at 45 times the 12-month forward price–earnings ratio, FMEG at 50 times 12-month forward PE, and other sectors at 20 times 12-month forward PE.

Nomura On IndusInd Bank

The brokerage maintains 'neutral' with a target price of Rs 1,580, implying an upside of 17% from the previous close.
Company can now generate revenue as a ‘manufacturer’ of mutual funds.
Distribution business is just 0.4% of profit before tax, significantly lower than peers.
Views development as positive at the margin, but scale to take time.

Also Read: Trade Setup For Aug. 20: Nifty To Continue Bullish Momentum With Next Resistance At 24,700

Emkay On Kalpataru Projects

The brokerage maintains 'buy' with a target price of Rs 1,550, implying an upside of 26% from the previous close.
Management meeting takeaways include: positive on tendering environment across key verticals and geographies.
Fiscal 2025 growth guidance of 20%, profit before tax margin of 4.5% to 5%.
Cashflow of Rs 550 crore on divestment of non-core assets and improving return on capital employed.
The company is disciplined in order picking and has an impeccable execution track record.

Also Read: Stocks To Watch: Tata Motors, IndusInd, Bajaj Auto, Poly Medicure And Vedanta

Citi On Bharat Petroleum

The brokerage has a target price of Rs 1,550, implying an upside of 11% from the previous close.
Fiscals 2025 to 2026 earnings still 15% to 20% ahead of consensus; Dividend yield of 4% to 5% supportive.
Opens a 90-day positive catalyst watch on the company.
Oil marketing companies have underperformed Nifty in the last six months.
Underperformance due to refining and marketing margins, and elections. Factors of underperformance now reversing.

Citi On Mahindra & Mahindra

The brokerage maintains 'buy' with a target price of Rs 3,180 , implying an upside of 15% from the previous close.
Predict tougher terrain ahead for sports utility vehicles; tractors treading well.
Fiscal 2024 was the 'year of SUVs' for M&M.
Fiscal 2025 is expected to see better momentum in tractor segment.
SUV demand for the company has moderated versus earlier expectations.
Cut volume estimates for SUV segment, resulting in slight cuts in earnings estimates.
Suggest keeping tractor estimates unchanged for now.
Could be possible upside risks to tractor numbers on better than expected festive demands.
Top pick in the sector would be Maruti Suzuki.