Brokerage Views: Nuvama, Morgan Stanley On Amara Raja, UBS On IndiGo And More

Nuvama Research remains bullish on Amara Raja Energy & Mobility Ltd. after its tie-up with Gotion, while Morgan Stanley remains 'underweight' on the stock. Citi maintains 'sell' on Star Health & Allied Insurance Co, while UBS raised the target price of IndiGo parent InterGlobe Aviation Ltd. CLSA and Kotak comment on the information technology sector of India.

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 Monday.

Nuvama On Amara Raja

Maintains a 'buy' rating on the stock and a target price of Rs 2,000 apiece, implying a potential upside of 20% from the previous close.
Raising fair value of lithium business to Rs 1,100 per share, compared to the earlier price of Rs 532.
Signed a technical licensing agreement with Gotion.
Tie-up would propel Amara’s plan of 16 gigawatt hours capacity over the next 10 years.
The company is one of the top 10 global lithium battery makers.
Tie-up is for lithium iron phosphate cells for both auto and industrial applications.
Support in establishing gigafactory and integration with Gotion’s global supply chain.
Ascribing unchanged investment value of three times to lithium battery investments.

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Morgan Stanley On Amara Raja

Maintains an ‘underweight’ rating on the stock and a target price of Rs 967 apiece, implying an upside of 42% from the previous close.
Amara now matches Exide in capability but lags behind in customer wins.
The ramp-up timeline remains unknown.
The tie-up provides lithium iron phosphate prismatic and cylindrical technology.
Already in use in India, Tata Motors buys from Gotion.
Expects battery businesses to eventually reach a low double-digit return on capital employed.
Large customer wins will be key to track.
Scale will be key to generating returns in batteries as electric vehicle battery deflation continues.
Remain selectively overweight in the battery segment.
The brokerage currently prefers Exide over Amara. They will have more details to share in a month or two.

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Morgan Stanley On Indian Steel Players

Maintains an ‘equalweight’ rating on Tata Steel and a target price of Rs 145 apiece, implying a downside of 17% from the previous close.
Maintains an ‘underweight’ rating on SAIL and a target price of Rs 114 apiece, implying a downside of 21% from the previous close.
Maintains an ‘underweight’ rating on JSW Steel and a target price of Rs 650 apiece, implying a potential downside of 31% from the previous close.
Maintains an ‘underweight’ rating on Jindal Steel and Power and a target price of Rs 655 apiece, implying a potential downside of 38% from the previous close.
Domestic hot-rolled coil steel prices moderated during the week, falling 2.2% sequentially.
Rebar prices are down 3.3% week-on-week, led by a demand slowdown due to the onset of monsoons.
Believe the discount of domestic iron ore prices versus global prices imply downside risk.
In the coming months, domestic supply is expected to exceed domestic demand.
Steel stocks continued to do well on expectations of policy reform continuity.
Believe outperformance of stocks is over on no improvement in inventory levels and spreads.

Citi On Star Health After Analyst Day

Maintains a ‘sell’ rating on the stock and a target price of Rs 555 apiece, implying a potential downside of 1% from the previous close.
Medium-term guidance of a premium compound annual growth rate of 18% over fiscal 2024–2028.
The combined ratio stands at 95%, while the estimated fiscal 2025 guidance stands at 95.7%.
Profit after tax guidance of Rs 2,500 crores in fiscal 2028 versus Rs 1,100 crores in fiscal 2024.
Sustained investments in distribution franchises to drive growth.
Augmented sales manager base, agents, banks, and brokers, apart from direct-to-customer investments.
Enhancing tech capabilities for underwriting while reaffirming that the measures mentioned remain monitorable.

Citi On Bharti Airtel

Maintains a ‘buy’ rating on the stock and a target price of Rs 1,750 apiece, implying an upside of 20.7% from the previous close.
Bharti has announced an average hike of 16%.
Continue to assume average revenue per year of Rs 235, Rs 270, and Rs 305 over fiscal 2025, 2026, and 2027, respectively.
It has raised tariffs even in the low-end feature-phone segment.
The new tariffs help narrow the extent of Jio’s pricing discount to Bharti.
Remain positive from a medium-term perspective.
Would use any meaningful correction as an enhanced buying opportunity.

UBS Upgrades IndiGo

Maintains a 'buy' rating on the stock and upgraded target price to Rs 5,400 apiece from Rs 4,000 earlier.
The demand for air travel in India continues to grow.
Expects a compound annual growth rate of 11–17% in Indian air travel demand over fiscal 2024–30.
Expects Indigo's market-share gains in international travel to continue.
Remains constructive on Indigo's medium-term profitability, driven by a highly favourable industry structure.
Expects Indigo to generate a CAGR of 13% in Ebitda over fiscal 2024–27.
Short-term impact on profit due to sudden rise in supply, seasonality or sharp fuel-price increase cannot be ruled out.
Any associated dip remains an ideal buying opportunity.
Expects the sharp rise in Air India/Vistara's near-term capacity to impact Indigo's yields in the first quarter of fiscal 2025.
Expects a weaker second quarter due to seasonality.

Nomura On Indian Cement Sector

Prefers Shree Cement Ltd., UltraTech Cement Ltd., the Ramco Cements Ltd. and Nuvoco Vistas Corp.
Expects higher volume growth and a CAGR of 5% over fiscal 2024 to 2026.
Consolidation to result in better pricing discipline in the long run.
Ambuja Cements, UltraTech to be most aggressive players in consolidation cycle on cash on books, aggressive capacity and possible synergies of pan-India presence.
Remains positive on the sector due to long-term tailwinds.
Expects lower operating costs for companies led by moderating fuel costs.

CLSA On India Information Technology

Upgrades Wipro from 'underperform' to 'outperform'.
Downgrades Infosys Ltd. to hold.
Prefers Tech Mahindra Ltd., HCL Technologies Ltd. and Wipro Ltd. all rated 'outperform'.
Maintains 'underperform' on LTI Mindtree Ltd. and 'hold' on Tata Consultancy Services Ltd.
Discretionary demand is stabilising.
No further expected cuts to already weak revenue growth guidance for fiscal 2025.
Probability of buyback at Wipro.
Remain cautiously optimistic on Indian IT as the Gen Al scale-up is not proving to be a major headwind for IT jobs.

Kotak On IT Services

Forecasts moderate growth, led by seasonal strength, large deal ramp-up and reduced intensity of cuts in discretionary.
Expects Infosys, TCS, LTI Mindtree, Persistent Systems and KPIT Technologies to report robust sequential growth rates.
Expects HCLTech, Cyient and Mphasis to report muted numbers.
Infosys, TCS, Coforge are top picks.
Forecasts stable or increasing EBIT margins for large companies year-on-year.
Sequential margins will depend on seasonal factors and wage revision cycles.
Expects Infosys, HCLTech to retain guidance.
Expects Wipro to guide for flat revenues.

Kotak: Promoter Selling, Retail Buying

Trend of promoter stake-sale transactions accelerated in the first half of 2024.
Promoters of 37 NSE 500 companies sold Rs 87,400 crore in the first six months of 2024.
Private promoter holding in BSE 200 down to 38.8% in the fourth quarter of fiscal 2024 vs 42.1% in the third quarter of fiscal 2023.
Combined domestic investor holding up 80 basis points to 23.5% in the final quarter of fiscal 2024 vs 22.6% in the quarter ending December of fiscal 2023.
Automobiles, diversified financial, insurance, IT services, telecom accounted for bulk of promoter sales from 2019 to 2024.
Acceleration in promoter sales on business expansion, MPS compliance, debt reduction and more.

Morgan Stanley On India Technology

The growth in the first quarter is predicted to be softer than seasonality but the second-quarter commentary is expected to be positive.
There was a weak start to the year on margins.
The sector has bottomed out on a year-on-year basis in the final quarter of fiscal 2024 and is likely to improve hereon.
On a quarter-on-quarter basis, growth trends are likely to be soft with large divergence across companies.
Expects Infosys and LTI Mindtree to be at the higher end of growth, and Wipro and Tech Mahindra at the lower end.
Expects most companies to retain fiscal 2024 outlook.
Infosys and TCS stack up well in terms of valuation and expectations.
Runup in Wipro makes it less favourable in terms of risk reward.
HCLTech needs strong execution to meet its guidance.

Kotak Institutional On JB Chemicals & Pharma

Initiates a 'buy' rating on the stock and upgraded target price to Rs 2,025 apiece, implying an upside of 15% from the previous close.
It is the 22nd largest player in IPM, and outperformed IPM in the past decade by 600 basis points.
The company expects around 13% CAGR in organic domestic sales over fiscals 2024-27.
High-margin CMO vertical to double by fiscal 2028, led by healthy order book.
Forecasts 14% sales CAGR and 17% Ebitda CAGR over fiscals 2024-27.
Expects 230-basis-point expansion in Ebitda margins over fiscals 2024-27.
Key risks include any senior management exits, resurfacing of NDMA concerns relating to Rantac, high domestic sales concentration, and aggressive amortization policy of the acquired brands.

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