Brokerage Views: UltraTech Cement In Focus, Nomura Initiates Buy On Hyundai India And More

Brokerages from Morgan Stanley to Nuvama Institutional Equities have cement stocks like Dalmia Bharat Ltd. and UltraTech Cement Ltd. on their radar, after they reported second quarter earnings.

It was a pre-mediated concern that cement manufacturers would have had a seasonally weak quarter. In the case of UltraTech Cement, the decrease in revenues and net profits is mostly attributable to a difficult pricing environment and dampened demand, caused by the monsoon season.

Nomura has initiated coverage on Hyundai Motor India Ltd. as the company is set to list on the country's mainboard stock exchanges on Tuesday.

Morgan Stanley also shared a note on the gas industry and expects the sector to continue to re-rate.

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.

Morgan Stanley On Gas Industry

Prefers Indraprastha Gas Ltd., Oil and Natural Gas Corp., GAIL (India) and Oil India Ltd.
Lower gas allocation for compressed natural gas in favour of gas producers.
Expects APM gas allocation to near zero in five years.
Sees city gas distribution as energy transition plays.
CGD firms supporting natural gas penetration to increase.
Brokerage would buy the correction in IGL/gas value chain.
Expects sector to continue to re-rate.

Also Read: Hyundai Motor India IPO: Check Listing Date, Time And Other Details Of India's Largest IPO

CLSA On Dalmia Bharat

Maintained a 'hold' rating and cut target price to Rs 1,835 per share from Rs 1,900 previously.
Profitability at decadal low.
Maintained current rating despite relatively cheaper valuations.
Second quarter results below estimates on weak cement realisations.
Remains cautious of company's expectation of fiscal 2025 profitability improvement of Rs 900-1,000 per tonne.
Re-rating of stock hinges on clarity of company's capacity expansion.
Cut fiscal 2025-27 Ebitda estimates by 3-4% on weak second quarter results.

Morgan Stanley On Dalmia Bharat

Retained 'underweight' rating with a target price of Rs 1,750 per share, implying a potential downside of 5%.
Cut fiscal 2025-26 Ebitda estimates by 1% each.
Brokerage sees limited re-rating triggers despite cheap valuations.

Also Read: Dalmia Bharat Q2 Review: Outlook Remains Cautious With Growth Plans As Key Positive Trigger

Nuvama On CG Power And Industrial Solutions

Maintained a 'buy' rating on the stock with a target price of Rs 895 apiece, implying a potential upside of 13%.
Second quarter results were not as bad as it seems, Ebitda missed street by 3%.
Order inflows during the quarter were up 43.2% YoY and the order book expanded to Rs 7,830 crore.

Key triggers for next 12-18 months:

Operating profit margin recovery in industrials segment from second half of financial year 2025 onwards.
Timely setup of proposed capacity expansion of motors, transformers and switch gears.
Railway propulsion opportunity of Rs 2,000 crore and above from fiscal 2026/27.
Foray into new-age areas like Outsourced Semiconductor Assembly and Test and Kavach.
Foray into newer-end segments like desalination, ESL orders, biogas and ethanol.

Jefferies On Oberoi Realty

Maintained a 'hold' rating on the stock and a target price of Rs 1,900 per share, implying a potential downside of 2%.
Second quarter pre-sales of Rs 1,440 crore, up 49%, beat expectations of Rs 1,000 crore.
Jump in sales at Worli and Goregaon projects drove pre-sales and profit and loss beat.
Financial year 2025/26E earnings estimates raised +14%/+3% on higher Worli sales and stronger than expected Thane response.
Maintained rating as it finds limited upside at 25%+ premium to NAV.

Also Read: PhonePe Invested Nearly A Third Of Funds Raised In FY24 On Financial Services, Consumer Tech

Nuvama On UltraTech Cement

Maintained a 'hold' rating on the stock and cut target price to Rs 11,238 per share from Rs 11,773 apiece earlier, implying a potential upside of 3.7%.
Second quarter Ebitda missed brokerage estimate by 15%.
Ebitda per tonne at Rs 725 was lowest in past seven years.
Management expects operating cost savings of Rs 250–300 per tonne over three years.
To spend Rs 8,000-9,000 crore in fiscal 2025, Rs 9,000 crore in fiscal 2026/27 for capacity expansion.
Revise FY25/26/27 Ebitda estimates lower by 9%/5%/3%.

Nomura On UltraTech Cement

Maintained a 'buy' rating on the stock with a target price of Rs 12,350 per share, implying a potential upside of 13.6%.
Second quarter Ebitda missed brokerage/Bloomberg estimates by 10%/13%.
Higher than expected employee cost/tonne impacted Ebitda/tonne.
Trimmed fiscal 2025 cement Ebitda/tonne estimate by 10%.
Maintained financial year 2026 unitary Ebitda estimate at Rs 1,400 per tonne.
Expects company's third quarter Ebitda per tonne to expand by Rs 335 to Rs 1,060.
Maintained third quarter volume estimate of 32 metric tonne.
The company will reach total cement capacity of 183.5 MT by fiscal 2027, the brokerage said.
Expects company to record Rs 110 per tonne cost saving by fiscal 2026.

Jefferies On UltraTech Cement

Maintained a 'buy' rating on the stock, with a target price of Rs 12,500 per share, implying a potential upside of 15%.
Second quarter Ebitda weakness reflects impact of price weakness.
Multi-year Ebitda/tonne low has likely bottomed out, the brokerage said.
Second half volumes and profitability will be better, according to Jefferies.
Company is better placed versus peers with cost saving efforts.
Sharply cut Ebitda estimate by 7-14%.
Expects Ebitda per tonne of Rs 1,000/1,120-1,220 for FY25/FY26-27.

Also Read: UltraTech Cement Q2 Results Review: Analysts Optimistic On Long-Term Growth Despite Miss

Nomura On Hyundai India

Initiated coverage with a 'buy' rating on the stock and a target price of Rs 2,472 per share, implying a potential upside of 19.6%.
Ongoing premiumisation should drive high quality growth.
Long runaway for India car industry, with current penetration at 36/1,000.
Estimates India's PV industry to sustain healthy volume CAGR 6-8% over 5-10 years.
Customers becoming more aspirational and willing to pay more for features.
Hence, ASPs should continue to rise by 3-5%, according to brokerage.
Poised for long term growth with SUV mix at 67%, improving ASP and market share.
Company is best positioned in passenger vehicle original equipment manufacturer coverage to handle tech transitions, brokerage said.
Hyundai has consistently been able to predict consumer shift towards SUVs.
Having Indian management on board is a key advantage.
Estimates company to deliver 8% volume growth CAGR over fiscal 2025-27, driven by 7-8 models.
Ebitda margins expected to improve to 14% by FY27 vs 13.1% in fiscal 2024.
Overall, estimates Hyundai to deliver 17% earnings CAGR over fiscal 2025-27.
Estimates stock at 25 times fiscal 2027 P/E.