Brokerage Views: Citi On NMDC, Jefferies On ICICI Bank And More

Brokerages have NMDC Ltd. and ICICI Bank Ltd. on their radar, while S&P Global shared its insights on energy and commodities outlook for the second half of 2024. Morgan Stanley commented on SBI Cards in the back of credit-card spend data, while IIFL Finance initiated coverage on PNB Housing Finance Ltd. and Netweb Technologies India Ltd.

NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts that you need to know about on Wednesday.

Morgan Stanley On SBI Card

Maintains an 'equal weight' on the stock and a target price of Rs 750 apiece, implying a potential upside of 3% from the previous close.
Market share in credit cards at 18.5%, which is down 102 bps year-on-year and down 3 bps quarter-on-quarter.
The market share of monthly credit-card spending increased month-on-month to 16% versus 15.7%, which is down as compared to 16.9% in May 2023.

Citi On NMDC

Opens downside 90-day catalyst watch on imminent iron ore price cut.
Maintains 'sell' rating on the stock with a target price of Rs 215 apiece, implying a potential downside of 18.6% from the previous close.
NMDCs current prices are at over 35% premium to export parity.
An 11% hike in prices since March, but global prices are down now.
Every Rs 100-per-tonne change in price impacts Ebitda by 3–4%.
NMDC trades at 7 times the EV/Ebitda, while the 10-year average is 5.3 times.
Price cut is imminent.
Odisha miners are cutting prices.
Indian exports could slow, since prices globally have weakened.

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Jefferies On ICICI Bank

Maintains a 'buy' rating on the stock and a target price of Rs 1,350 apiece, implying a potential upside of 15% from the previous close.
Deposit growth of 20% among the best of large banks.
Slower cost growth to offset margin normalisation.
Asset quality holding up, corporate book could see recoveries.
Expects 18% return on equity to sustain.
Valuations based on SOTP valuations, which includes 2.4 times June 2026 price to book ratio.

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IIFL Initiates Coverage On PNB Housing

Initiates 'buy' rating on the stock and a target price of Rs 1,050 apiece, implying a potential upside of 37% from the previous close.
Expects 19% loan CAGR by FY24–27.
Driven by share of affordable and emerging prime loans doubling to 40% mix.
Expects company's affordable book to grow at 100% CAGR over the next three years.
Expect spreads to expand by 5–10 bps with confirmation of funds benefit from rating upgrade.
Risks include scale-up challenges in affordable and emerging, interest rate cycle.

S&P's Energy, Commodities Outlook For H2 2024

Expect domestic production to be in 1.5–1.7 billion tonnes range by 2030.
Imports to stay stable at over 150 million tonnes over next five–six years.
Coal to remain the dominant source of power generation in India over the next decade.
Domestic production is on track to jump, coal imports to still play an important role.
Indian importers have benefitted from cheaper liquefied natural gas imports this year.
Expect imports to grow further if liquefied natural gas prices remain attractive against competing fuels.
LNG companies face challenges in securing long-term contracts.
India to benefit from reforms in domestic gas policies.
Hydrogen garners priority status, which creates export avenues for India.
Domestic players like fertilisers, refineries, steel keen to offtake hydrogen.
Need to reduce the gap between grey and green hydrogen in the domestic market.

InCred Research On Steel

NMDC remains top pick.
Holds a 'sell' rating on Tata Steel and Steel Authority of India Ltd.
Holds a 'buy' rating on NMDC and Indian pellet makers.
Decline in Indian domestic steel spreads to result in worse Q1 FY25 net profit.
Exports from China are depressing global prices.
Extra emphasis on electric arc furnaces leading to rise in scrap prices.
Iron ore prices can also rise in coming months.
Pellet premiums to remain high in the long run.
Positive outlook on iron ore miners and pellet makers.

Investec On Stylam Industries

Initiates 'buy' rating on the stock and a target price of Rs 2,362 apiece, implying a potential upside of 40% from the previous close.
Rapid revenue growth in both exports and locally in the laminates space over FY2019–24.
Forecasting Stylam Industries to clock a 19% Ebitda compound annual growth rate from FY24 to FY26.
Expecting an 11% earnings per share CAGR over the same period.
Projected PE ratio for FY26 is 25 times.
Drove strong earnings growth 30% CAGR from FY04 to FY24.
A different approach on marketing/distribution versus the market leader.
Incremental expansion offers attractive returns on capital employed.

Morgan Stanley On Spectrum Auction

Cumulative bidding amount is Rs 75 billion
Limited bidding activity, no demand for 5G bands.
Highest deviation in bid prices seen in the 1,800 MHz band in Bihar circle.
No demand yet in the 800 MHz band.
About 35% of total spectrum was won in the 900 MHz band, where Bharti Airtel and Vodafone Idea have a footprint.
About 18% of total available spectrum was won in the 1,800 MHz band, where all three players have 25–30% share.
Details of bids by each player will be known only at the end of the auction.

Jefferies On India Property

Expects 75% pre-sales growth for coverage stocks, led by DLF and Godrej Properties.
Overall, 15–35% guidance by residential developers should be met.
Channel checks suggest momentum tapered in June due to elections.
Impact of pricing deltas visible in the NCR with inventory off lows.
Prefers Godrej Properties, Lodha, Sunteck.

JM Financial On Shivalik Bimetal Controls

Initiates 'buy' rating on the stock and a target price of Rs 730 apiece, implying a potential upside of 33.8% from the previous close.
CAGR of revenue, Ebitda and net profit are expected to be 25%, 29% and 29% respectively over FY24–26.
RoCE and RoE are anticipated to be 30.4% and 24.1% in FY26.
The company is d at 30 times FY26.
Shunt resistors are the mainstay of revenue.
The company is the dominant domestic player in bimetal.
Electrical contacts are poised for strong growth.
Longstanding customer relationships are a key strength.

Nomura On Bandhan Bank

Maintains 'reduce' rating on the stock and a target price of Rs 170 apiece, implying a potential downside of 18% from the previous close.
The RBI action was similar to what was seen in some other banks during succession.
The RBI-appointed directors generally were appointed with a tenure of two years, but the same has been revised to one year for Bandhan Bank.

Nuvama On Prince Pipes & Fittings

Maintains 'buy' rating on the stock and a target price of Rs 830 apiece, implying a potential upside of 22% from the previous close.
The management is confident of a 15% volume growth along with 12–14% margin in FY25.
Demand continues to stay robust from both infrastructure and plumbing.
Focused on increasing market share by rationalising pricing strategy and improving supply chain.
Margins can see an upside if PVC price rally continues.
Will leading to re-stocking and inventory gains supporting margins.
On track to reduce receivables from mid-80s to 65–70 days.
India's real estate revival and infra push has paved way for plastic pipe players.

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IIFL On Netweb Technologies India

Initiates 'add' rating on the stock and a target price of Rs 2,680 apiece, implying a potential upside of 4% from the previous close.
Netweb is a domestic provider of end-to-end computing solutions.
Company has emerged as a proxy to AI and data-center related investments in India.
Has a target addressable market of ~$13 billion.
Is expected to grow at 14% CAGR over the next 5 years.
Has witnessed a 5-time growth in sales and 9-time growth in profit after tax over fiscal 2021-2024.
Robust demand led jump in execution and operating leverage.
The stock trades richly at 1.7-time price/earnings to growth ratio leaving little room for upside.