Brokerage Radar: Bernstein has 'outperform' call on HDFC Bank, Jefferies has 'hold' rating on Kotak Mahindra

Brokerage Radar

Check out the latest brokerage calls and analyst comments on the stocks in action today. Our coverage includes HDFC Bank, Kotak Mahindra Bank, Tech Mahindra and more.

HDFC Bank

Bernstein On HDFC Bank
Outperform Call, Target At `2,100/Sh
Q2 Results Bore Resemblances To Co’s (Pre-2020) Past When Earnings Delivered Nearly No Surprises
Bank Almost Appeared Immune To The Troubles Of Its Peers (NIM Declines, Rising Credit Costs)
Bank Has A Big Gap To Bridge On Both RoA And Growth But Co Seems To Be Moving Along Steadily

Goldman Sachs On HDFC Bank
Buy Call, Target At `2,156/Sh
Q2 Had In-line Core Operating Profits & A Slight Beat On PAT With Better Visibility Of Earnings
Core PpOP RoA Of 2.7% Marked Second Consecutive Quarter With An Improvement
PpOP Was 2% Ahead Of Consensus & In Line With Est Driven By Lower Operating Expenses
Provisions 10% Lower Than Consensus, PAT Beat Street Estimates By 10%, In-line With Estimates
This Was The First Quarter After Merger With HDFC Ltd With An RoA Expansion To 1.9%

JPMorgan On HDFC Bank
Neutral Call, Target At `1,750/Sh
Q2 PAT Was 3% Ahead Of Estimates Aided By Reversal Of AIF Related Provisions
NIM Were Flat QoQ With Improvement In Loan And Liability Mix
Asset Quality Was Better With Net Slippage Contained At 0.7%

Kotak Mahindra Bank

Goldman Sachs On Kotak Mah Bank
Buy Call, Target At `2,286/Sh
Miss In Its Q2 By 5% Vs Est And 2% On VA Consensus Due To A Lower Fee
5% Miss In Q2 Due To Higher Loan-Losses Coupled With Slower Loan Growth
Q2 Results Indicate Multiple Headwinds Including Impact Of RBI’s Embargo & Poor Macro
Main Feature In Q2 Was Disappointing Trends In Asset Quality
Asset Quality Was In-line With Sector-wide Trend Of Increasing Delinquencies In Unsecured Lending
MFI Loans As Both Slippages And Credit Costs Higher Than Estimates
Positively, Loan Growth & Core PpOP Growth Still Remained Healthy Outpacing Peers

JPMorgan On Kotak Mah Bank
Overweight Call, Target At `2,030/Sh
Q2 Net Income Was 2% Below Estimates On Higher Provisions And A Marginal Miss At Core PpOP
Asset Quality Showed Strain With Net Slippages At 1.2% Driven By Pressures On Cards & MFI
CASA Growth Remains Muted At 4% YoY With Total Deposit Growth At 15% YoY
Loan Growth Slowed Down At Margin With Advances Growth Of 15% YoY

Jefferies On Kotak Mah Bk
Hold Call, Target At `2,080/Sh
For Q2, Profit Was Largely In-line With Est, With Higher Other Income
NIM Continues To Underperform Peers Due To Rise In COF & Fall In Share Of Unsecured Loan
Slippage Rose From Credit Cards & MFI Loans May Slip In Next 2 Quarters
Positives: Deposit Growth Of 15%, And LDR Of 87%
Clarity On RBI Embargo & NBFC Circular Is Key

Tech Mahindra

Nomura On Tech Mah
Buy Call, Target At `1,900/Sh
Steady Progress Towards Medium-term Goals
Q2 Was A Beat On Most Parameters
Growth In Communications Was Healthy
Growth In Enterprises Vertical Was Healthy In The Hi-Tech, Retail & Banking Vertical
EBIT Margin At 9.6% Was Ahead Of Consensus Estimate Of 9.2%

Jefferies On Tech Mah
Underperform Call, Target At `1,440/Sh
Q2 Revenue Beat Estimates Led By Growth In Vertical & Fx Tailwinds
Normalised Profits Missed Estimates
Order Bookings Were Down YoY & Mgmt Highlighted That Demand Environment Remains Unchanged
While Q2 Revenue Beat Was Encouraging, Still See Its Aspiration Of 15% Margin By FY27 As Optimistic
Valuation At 26x FY26 PE Looks Rich, Raise FY25 By 4%

CLSA On City Gas Cos
Reduction In Supply Of Legacy Gas Will Test Pricing Power For City Gas Stocks
The Allocation Cut Has Clear Risks & See 15-25% Cuts In Fair Value Of IGL & MGL
Find Up To 12% Upside For IGL, MGL After Recent Nosedive In Stock Prices
Delay In Price Hikes Or Gradual Price Hikes May Keep Uncertainty Alive
Pricing Decision By City Gas Players Will Be A Key Focus Over Coming Months For IGL & MGL
Impact On Volume Will Be A Key Focus Over Coming Months For IGL And MGL

CLSA On Zee Enterprises
Upgrade To Outperform, Target Raised To `170/Sh From `150/Sh
Q2 Consolidated Revenue Was Below Estimates With Movies -44% QoQ & Advertising -1% QoQ
Q2 Margin Jumped To 16% And EBITDA Came In 20% Above Estimate
PAT Was Also Ahead Of Estimate
With Miss In Q2 & Softness In Macro Ad Environment, Cut FY25/27 Revenue Estimates 7%
Retain Our EBITDA/PAT Forecasts

Morgan Stanley On Multi Commodity Exchange
Underweight Call, Target At `3,245/Sh
Adjusted EBITDA Beat Estimates BY 1%
PAT Missed Estimates Due To Voluntary SGF Contribution & Provisions Towards Regulatory Matters
Stronger Other Income Led To A 2% Beat On Revenues
Think Key Topics On The Call Will Be Regulatory Risks And Timeline Of Joining Of New CEO

JPMorgan On RBL Bank
Neutral Call, Target Cut To `225/Sh From `270/Sh
Q2 PAT Was Below Estimates, Led By Sharp Rise In Provisioning From Higher Unsecured Delinquencies
Bank Noted Higher Stress On Its Credit Cards & MFI Book
Advances Growth Has Come Off To 15%, Driven By Slowdown In Unsecured Lending
Expect Growth To Remain Below Guidance In FY25 Given Uncertain Credit Environment
Improving RoA Profile For Wholesale & Secured Retail Businesses Were Key Positives
Positives Were Overshadowed By Weakness In Unsecured Driving Decline In RoA To 0.64%
Valuations Are Cheap At 8x FY26 P/E But See Limited Re-rating Scope In Current Environment

Citi On Polycab
Buy Call, Target Raised To `8,600/Sh
Wires & Cables Margin Was Impacted Due To Higher Competition In Wires
Demand Is Expected To Further Pick-up In H2
H2 Margin Tend To Be Accretive Vs H1 & Management Expects The Same Trend To Continue
EPC Revenue Contribution Will Remain Elevated, Pick-up In Exports Will Aid In Recouping Margin

Morgan Stanley On Tata Consumer Products
Overweight Call, Target Cut To `1,273/Sh
Organic Business Revenue Growth Was Weak, At 5%, With Volume Decline In Tea
Growth Businesses' Organic Growth Was Weaker, At 15%
Non-Branded/International Continued To Do Well
Market Share Over Margins Is The Key Focus
Rural Is Recovering Gradually, And Urban Demand Has Softened

Jefferies On IndiaMART
Downgrade To Underperform From Buy, Target Cut To `2,540/Sh
Co Delivered In-line Q2 Results
Softness Continues In Subscriber Adds
Softness In Subscribers Led To Collections Growth Moderating To 5% YoY, Key Negative From Q2
Collections Growth Is Likely To Range Between 10-15% Unless Subscriber Adds Pick Up
Cut Estimates By 4-12%
Continued Surge In Subscriber Churn Despite Multiple Interventions By Mgmt Has Surprised Negatively

JPMorgan On Cement
India Cement Sector Looks Set For Consolidation With Larger Players Turning Aggressive
Urbanisation And Infrastructure Projects Should Boost Medium-term Demand
Utilisation Should Remain Stable, Despite New Capacity
Industry Should Recover From Recent Weakness As Government Capex Grows 40% YoY, Post Monsoon
Industry Should Recover From Recent Weakness As Cos Try To Cut Costs
Initiate Overweight Call On Ultratech, Target At `13,750/Sh
Initiate Neutral Call On ACC, Target At `590/Sh
Initiate Overweight Call On ACC, Target At `3,020/Sh
Initiate Neutral Call On Shree Cement, Target At `25,175/Sh
Initiate Underweight Call On Dalmia Bharat, Target At `1,550/Sh

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