Brokerages have gas stocks on their radar, with Citi and Nuvama commenting on the Indian gas sector, including Mahanagar Gas Ltd. Emkay comments on Ujjivan Small Finance Bank Ltd. after the lender lowered its fiscal 2025 guidance.
Goldman Sachs has initiated coverage on the recently listed online travel agency TBO Tek Ltd. with a 'buy' rating. Nuvama updates its top picks in the engineering and capital goods sectors.
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 Mahanagar Gas
Maintains a ‘buy’ rating on the stock with a target price of Rs 1,670 apiece, implying a potential upside of 13% from the previous close.
The world's first CNG motorcycle will launch on July 5. CNG two-wheelers will be a lucrative alternative to two-wheeler EV scooters.
Believe motorcycles could add 6% to the company's CNG volumes by 2030.
Expect the company's CNG volumes to rise 2% by fiscal 2026.
The base case assumes 20% CNG penetration in the motorcycle segment.
Expect fiscal 2025 earnings growth to be flat, and margins to normalize.
Citi On Mahanagar Gas
Maintains a 'buy' rating on the stock with a target price of Rs 1,550 apiece, implying an upside of 5% from the previous close.
Management guides 6-7% year-on-year volume growth in fiscal 2025.
Margins to sustain over Rs 11 per standard cubic metre of gas in the near term.
The company sees a pick-up in monthly CNG conversions.
Higher conversions at stable and affordable CNG prices.
Management expects 10-12% year-on-year growth in industrial volumes in fiscal 2025.
Company to add 3 lakh connections per annum going forward.
Management concurs that the sector is likely to see consolidation in the coming years.
Emkay On Ujjivan Small Finance Bank
Maintains a 'buy' rating on the stock with a target price of Rs 65 apiece, implying an upside of 33% from the previous close.
The bank has hired Sanjeev Nautiyal to replace Ittira Davis.
Apply for universal banking in fiscal 2025.
Trims fiscal 2025–2027 earnings by 4–6%.
Expect a healthy return-on-assets of 2.5–3%.
Value bank at 1.6 times the fiscal 2026 adjusted book value.
Goldman Sachs Initiates Coverage On TBO Tek
initiates a 'buy' rating on the stock with a target price of Rs 1,970 apiece, implying an upside of 24% from the previous close.
Expects revenue to grow at a compound annual growth rate of 22% in fiscal 2024–2027. Revenue grew a compound annual growth rate of 26% in fiscal 2019-2024.
The company is consistently profitable; expect the free cash flow to profit after tax to be higher than 100%.
Positives in the business model: exposure to a large, fragmented total addressable market, a strong execution track record, an asset-light balance sheet, negative working capital, strong free cash flow generation, and low competition and regulatory risks.
Risks include headwinds from the shift to online, competition, changes in supplier terms, and a slowdown in global travel.
Citi On India Gas Sector
No developments on bringing gas under GST at latest council meeting.
Given building expectations, gas stocks could see short-term disappointment for stock performance.
Finance Ministers states government is intent on eventually bringing petrol & diesel under GST too.
See moves being made to first bring gas under GST.
Nuvama On Engineering And Capital Goods
Believes in sustained momentum in public capex across thermal power, training and development, railways, and defence.
Sees earnings re-rating for ABB India Ltd., Siemens Ltd., CG Power and Industrial Solutions Ltd., and Hitachi Energy India Ltd. on higher order inflows in fiscal 2025.
The top picks in the sector are BHEL Ltd., Hitachi Energy, CG Power, and Kalpataru Projects International Ltd.
The top picks in non-covered space are Data Patterns (India) Ltd., APAR Industries Ltd., Schneider Electric Infrastructure Ltd., and BEML.
Sees private capex pickup across new age areas like data centres, solar modules, and electronics.
Margin surprises across product companies (ex-engineering, procurement, and construction) led to all-time high valuation premiums.
Believes valuations will be sustained, backed by macro tailwinds and strong investment plans.
Prefers data centres, railways, power T&D, defence, and water and wastewater treatment sectors.
Believes demand momentum will sustain transformer players for the next four to five years.
Nuvama On Consumer Durables
Huge beneficiaries of GDP multiplier effects, offering great growth potential.
Directional growth improvement is likely as these quarter marks an inflection point for consumer durables.
Expect the industry to clock double-digit growth in fiscal 2025.
Top picks are Voltas, rated 'buy'.
Rising raw material costs may lead to a price hike of 2–3% next quarter.
Strong overall performance indicates robust consumer-spending trend; sustained growth in fiscal 2025 and beyond.
Industry body Consumer Electronics and Appliances Manufacturers Association expects 1.4 crore room air conditioner sales in 2024, implying volume growth of 27% year-on-year.
Reckon there is no oversupply in the industry despite Production Linked Incentive Scheme-led capacity expansions.
Projections indicate a compound annual growth rate of 20% in demand and a compound annual growth rate of 16% in supply over fiscal 2024–2027.
Growth drivers include aspirational middle class with notable penetration in tier three, tier four and tier five towns (60% sales contribution), favourable monsoon for boosting rural consumption and festive sales, rise in demand for premium appliances and buoyant residential real estate sales over the past two to three years.
Morgan Stanley On Zomato
Maintains an ‘overweight’ rating on the stock and a target price of Rs 235 apiece, implying a potential upside of 21% from the previous close.
Zepto's recent fund raise increases quick commerce channel relevance and competitive intensity.
Zepto raises $665 million at a $3.6-billion valuation.
Zepto to use fund raise to enter new markets and increase penetration in existing cities.
Recent fundraises reflect the growing importance of quick commerce.
Implications on Zomato are to maintain/improve market positioning due to expansion plan, lower expectations on break-even levels expected in quick-commerce segment, push out of profitability for quick commerce a possibility and correction in stock to be buying opportunity for long-term investors.
Morgan Stanley On India Technology
Maintains an 'overweight' rating on Zomato and a target price of Rs 235 apiece, implying a potential upside of 21% from the previous close.
Maintains an 'overweight' rating on PB Fintech and a target price of Rs 1,020 apiece, implying a potential upside of 23% from the previous close.
Zomato and PB Fintech's track record, outlook and valuations outweigh others.
Macro and micro factors aligned for India internet stocks.
Rising dispersion of stock returns implies greater focus on stock election.
Firms re-prioritising growth despite slow margin improvement in the near term.
Key catalyst is strong revenue growth momentum.
Expects Zomato and PB Fintech to surprise on revenue growth.
Kotak Securities On Godrej Agrovet
Maintains a 'buy' rating on the stock and a target price of Rs 740 apiece, implying a potential upside of 20% from the previous close.
A turnaround story worth betting on.
Firm has seen fading investor interest amid sluggish earnings growth.
Recent meetings with management indicate measures undertaken to cut costs.
Interventions will help drive higher margin and less volatile earnings.
Raise FY25–27 EPS estimates by 8–13%.
Kotak On Havells India
Maintains a ‘sell’ rating on the stock and a target price of Rs 1,260 apiece, implying a potential downside of 34% from the previous close.
Key meetings takeaways are:
Company aspires to be among the top five players in large kitchen appliances.
Lloyd has several levers for margin expansion, with higher scale in the medium term.
Switches and switch gears to deliver high-single digit growth in the medium term.
LED prices are still declining but the pace of decline has reduced.
Capacity expansion plans in place for the next leg of growth.
Kotak On Apollo Hospital Enterprise
Maintains an 'add' rating on the stock and a target price of Rs 6735 apiece, implying a potential upside of 8.8% from the previous close.
Takeaways from meeting with Senior Management:
Company guides 8% YoY patient volume growth in FY25.
Management expects occupancy to increase to 68–69% in FY25 vs 65% in FY24.
Brokerage expects 60-basis-point expansion in hospital margin to 24.1% over FY24–27.
Company aims to create a retail healthcare powerhouse with Apollo HealthCo.
Kotak Securities On Container Corp
Maintains a 'sell' rating on the stock and a target price of Rs 740 apiece, implying a potential downside of 29% from the previous close.
Rail freight rate data suggests the company's pricing is at 5% premium to peers.
Expects market-share loss to continue.
Recent unconfirmed news flow suggests divestment process could defer to beyond FY25.
Current market trades at an expensive 42 times one-year forward earnings.
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