Brokerage Views: CLSA On HDFC Bank, Citi, Kotak On Coforge And More

CLSA's Laurence Balanco provides insights on HDFC Bank. Citi and Kotak remain bearish on Coforge after the meeting with the chief financial officer, while Jefferies downgrades Bharti Hexacom to 'hold', and Equirus Securities initiates 'long' on Nykaa's parent FSN E-Commerce.

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 Thursday.

Jefferies On Bharti Hexacom

Maintains a ‘hold’ rating on the stock and a target price of Rs 1,290 apiece, implying a potential upside of 1% from the previous close.
Unexpectedly acquired spectrum shares worth Rs 1,000 crore, should help augment data services.
Cut earnings estimates by 4% to factor in spectrum spends.
Maintain a compound annual growth rate of 17% in revenue and 23% in Ebitda over fiscal 2024 through 2027.
Trades at over a 20% premium to Bharti Airtel's India operations, which limits upside.

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Equirus Securities Initiates Coverage On Nykaa

Initiates a ‘long’ rating on the stock and a target price of Rs 240 apiece, implying a potential upside of 37% from the previous close.
Expect a compound annual growth rate of 26% in sales over fiscal 2024–2029.
The Nykaa beauty and personal care segment commands 38% of the market share and boasts strong prospects.
Sees strong growth trajectory over the next decade, with a $31 billion opportunity by the calendar year 2027.
Believes attractive valuations with stock trading at 58 times the fiscal 2028 price-to-earnings ratio estimate.
Estimate the return on equity to reach 37% and the core return on invested capital to reach 38% in fiscal 2028.

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Citi On Coforge

Here are the key takeaways from the meeting with the Chief Financial Officer:

Maintains a ‘sell’ rating on the stock and a target price of Rs 4,825 apiece, implying a potential downside of 9.4% from the previous close.
Maintains fiscal 2027 target of $2 billion in revenues and an operating margin improvement of 150–250 basis points.
Demand environment has improved compared to the start of the quarter.
Revenue growth in the first quarter of fiscal 2025 will likely be similar to that in the fourth quarter of fiscal 2024.
Growth in the second quarter will be healthy, largely due to the pickup of deals.
Cigniti acquisition is on track and will likely be consolidated from July 1, 2024.
Wage hikes for most employees will likely be deferred to the second quarter and will be lower than usual.
Valuations are at approximately 30 times one-year forward consensus earnings per share.

Kotak Institutional Equities On Coforge

Initiates an 'add' rating on the stock and a target price of Rs 6,000 apiece, implying a potential upside of 12.7% from the previous close.
Expects 20.2% earnings-per-share CAGR in fiscal 2024–27, with an organic revenue of 12.3% CAGR and a margin expansion of 150 basis points.
Coforge's success story is driven by the chief executive officer and its experienced band of senior leaders.
Key risks include leadership churn, and mergers & acquisitions integration, given the lack of a promoter entity.
Coforge has high exposure to banking, financial services & insurance and travel as it is dependent on the tech spending outlook of these verticals.
Expects healthy revenue growth in the long run from: sharp execution on the acquisition of new clients, share gains in existing accounts and expansion of the addressable market.
Forecasts 18.4% dollar-revenue CAGR and 12.3% organic dollar revenue CAGR for fiscal 2025–27.

CLSA On HDFC Bank

As Per CLSA's Laurence Balanco:

Maintains a target price of Rs 2,373 apiece, implying a potential upside of 35-38% from the previous close.
Stock is on the verge of breaking out of trading range placed since 2021.
Closing above Rs 1,717-1,734 resistance would mark a major bullish event.
Will lead to an end of a period of over two years of ranging price action.

Citi On India IT Services Preview

Expect 4% constant currency year-on-year revenue growth in fiscal 2025 for top five IT companies.
Expect fiscal 2025 margins to improve by 70 basis points for top five IT companies supported by lower or deferred wage hikes.
Infosys and HCL Technologies are rated neutral.
Overweight on Infosys, underweight on TCS.
Focus will be on guidance, total contract value, Gen AI disclosures and margins.

Citi On PI Industries

Maintains a 'buy' rating on the stock with a target price of Rs 4,350 apiece, implying a potential upside of 15.2% from the previous close.
Acquisition of Plant Health Care contingent on approval of more than 75% shareholders.
Approval expected to be completed by the second quarter of fiscal 2025.
Acquisition price represents a premium of 57% to the closing price of June 25.
Acquisition price reflects premium of around 95% to the past three months' volume weighted average price.

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