HDFC Bank Ltd. takes the spotlight as brokerages, from Morgan Stanley to Nomura, shared their outlook on its first quarter business update. Motilal Oswal Financial Services Ltd. shared its views on the capital goods sectors' first quarter performance for fiscal 2025. Nomura and Emkay have the Indian cement sector on its radar.
NDTV Profit tracks what brokerages are putting out on stocks and sectors. Here are all the top calls from analysts that you need to know about on Friday.
Nomura On HDFC Bank
Maintained a ‘neutral’ rating on the stock and a target price of Rs 1,660 apiece, implying a potential downside of 6% from the previous close.
Loan and deposit ratios tracking below FY25 estimates.
Balance sheet course correction is underway, and the process will be gradual, the brokerage said.
It does not see a case for significant outperformance versus other private banks.
Liquidity Coverage Ratio has risen sharply with possible moderation to core Net Interest Margin QoQ.
Morgan Stanley On HDFC Bank
Maintained an ‘overweight’ rating on the stock and a target price of Rs 1,900 apiece, implying a potential upside of 10% from the previous close.
Period-end deposit growth was muted QoQ, after a strong previous quarter.
On a YoY basis, loan growth was ~11% (on a pro forma merged basis) versus 12% in the prior quarter.
Gross loan-to-deposit ratio was 104.5% versus 105.4% in the prior quarter.
Retail loan growth +1.5% QoQ versus 3.7% QoQ.
Commercial and rural loans growth, according to it's calculation, was +0.9% QoQ versus +4.2% QoQ.
Wholesale loans decline 5% QoQ versus 6% degrowth in Q4 FY24.
Average LCR ratio improved to 123% versus 115% in the prior quarter.
Bernstein On HDFC Bank
Maintained an ‘outperform’ rating on the stock and a target price of Rs 2,100 apiece, implying a potential upside of 22% from the previous close.
Yet another weak first quarter for deposits.
Sharp decline in corporate and wholesale loans.
Lower current account saving account might offset gains from better loan mix.
Slower loan growth was in line with expectations and would have helped the margins, if only the deposit growth was higher.
Jefferies On HDFC Bank
Maintained a ‘buy’ rating on the stock and a target price of Rs 1,880 apiece, implying a potential upside of 9% from the previous close.
HDFC Bank's deposit growth was slightly disappointing.
Loans contracted 0.8% QoQ.
Retail, small and medium enterprises and rural led growth on the loans front.
LDR is flat QoQ.
What to watch out for: retail deposit trend, NIM and operating expenses.
Nomura On Indian Cement Prices
Pan-India average trade prices remain flat at Rs 345 per bag MoM in July.
June trade prices moderated, down Rs 10-15 per bag in Central and Western regions.
Eastern region is the only region to witness price hikes of Rs 4 per bag MoM.
Southern region demand shows no sign of recovery.
Market share tussle in the South will not lead to change in prices.
No uptick in central cement demand on extreme weather conditions, water shortage.
Emkay On Indian Cement Industry In Q1 FY25
Top picks include UltraTech Cement Ltd. and Ambuja Cements Ltd.
Expects average earnings before interest, taxes, depreciation and amortisation per tonne for companies to decline by Rs 133 QoQ.
Decline in Ebitda per tonne on continued weak cement prices.
Expects realisations to decline 3% QoQ to Rs 5246 per tonne.
Q1 demand slowdown on general elections, heat waves and labour-availability issues.
Q1 volumes of coverage stocks to rise 4% YoY in the first quarter of FY25.
Stable input prices to provide a breather, expects overall unit costs to remain flat QoQ.
Motilal Oswal On Capital Goods In Q1 FY25
Top picks in the sector include ABB India Ltd., Larsen & Toubro Ltd. and Bharath Electronics Ltd.
Maintained a 'buy' rating on ABB India Ltd. and a target price of Rs 9,500 apiece, implying a potential upside of 12% from the previous close.
Maintained a ‘buy’ rating on Bharat Electronics Ltd. and a target price of Rs 360 apiece, implying a potential upside of 18% from the previous close.
Retained a ‘buy’ rating on Larsen & Toubro Ltd. and a target price of Rs 4,150 apiece, implying a potential upside of 15% from the previous close.
Expects order inflows moderation for Larsen & Toubro Ltd., Bharat Electronics Ltd., and Kalpataru Projects International Ltd. in FY25.
Expects 12% YoY growth in execution in Q1 of the current fiscal for coverage universe.
Sees engineering, procurement, and construction companies' margins being impacted by legacy projects.
Export weakness is expected to remain for few more quarters, it said.
Estimates coverage companies to report revenue growth of 12% YoY in the first quarter of FY25.
Remained optimistic on long-term capital expenditure cycle and pickup in exports from second half of FY25.
Kotak On Oil, Gas & Consumable Fuels In Q1 FY25
Expects Q1 of this fiscal year to be weak for most companies, except GAIL (India) Ltd. and Petronet LNG Ltd.
Reliance Industries Ltd.'s order-to-cash segment weakness to offset modest growth in Reliance Jio and retail.
Indian oil marketing companies may see 35–43% QoQ Ebitda decline on weaker GRM, lower auto-fuel marketing margins.
GAIL (India) Ltd. and Petronet LNG Ltd. to benefit from higher gas consumption.
Sharp tariff cut to offset higher volumes for Gujarat State Petronet Ltd.
Rising administered price mechanism shortfall and price cuts to impact gross margins for city gas distributions.
Upstream higher windfall to offset benefits of higher oil prices.
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