Brokerage Radar | Mixed calls for Avenue Supermarts, outlook bullish for OMCs, life insurers

Stock Market Radar

Check out the latest brokerage calls and analyst comments on the stocks in action today. Our coverage includes Avenue Supermarts, Just Dial, and Larsen & Toubro, among others. On the sectoral front, we have coverage on life insurers and oil marketing companies.

Avenue Supermarts

Bernstein On Avenue Supermarts

Outperform Call, Target Rs 5,800/sh

Biggest Miss Was Rev Growth, Slowest In 4 Years, LFL Growth Slowest In 3 Years

Standalone EBITDA & Margin Were Slightly Lower YoY Due To Operating Leverage

Co Can Get Back To 20% + Growth On Faster Store/Retail Area Addition

Co Can Get Back To 20% + Growth If We See Increased Focus With 4-6 Hr Delivery

Co Can Get Back To 20% + Growth On Reduced Competitive Intensity From QC In Metros

Anticipate These To Take 3-5 Quarters To Impact

CLSA On Avenue Supermarts

Outperform Call, Target Rs 5,360/Sh

Q2 Sales & PAT Below Expectations

Gross Margin Was 30 Bps Below Estimate

Pat Was Notably Below Estimate With Higher-Than-Expected Employee Costs

Cut FY25-FY27 Est 13-15% To Reflect Slower Sales & Higher Overhead Costs

While Co’s Mgmt Called Out Increased Competition From Ecommerce As A Challenge In Q2

Believe Co Is Making Appropriate Pivot To Private Labels

Pivot To Private Labels Will Place It Well To Meet Future Competition

JPMorgan On Avenue Supermarts

Downgrade To Neutral, Target Cut To Rs 4,700 From Rs 5,400/Sh

Q2 Below Expectations; Revenue Growth Moderated On Back Of Slower LFL Growth

Press Release This Time Noted Clear Impact Of Online Grocery Formats

Extent Of SSSG Moderation Surprised Us

Lower Our SSSG/Revenue Forecasts By 4-6% Over FY25-26

Life Insurance

HSBC On Life Insurance

Strong Individual APE Growth In Sep 2024 Was Driven By LICI

Growth In Number Of Policies Sold Also Remained Healthy

Preponement Of Sales Due To Commission Structure Changes Could Drive A Strong LICI Growth

New Pdt Launches, Deepening Distribution Point To Positive Industry Growth Outlook

MS On Life Insurance

Private Sector Individual APE At 28% YoY Was On A Base Of 12% YoY (In Sep-23)

ICICI Pru Life & HDFC Life Saw Strong Growth

Growth At SBI Life Was Muted At 9%, On A Relatively Strong Base Of 16%.

Q2 Growth For ICICI Pru Life, HDFC Life & SBI Life Was 34%, 28% & 11%

Nomura On Life Insurance

Growth Of Public Ins Players Outpaced Overall Ind In Sep 2024

Growth Outpaced Overall Ind At 48% YoY (Vs ~1%/5% YoY In Aug-24/Sep-23)

Pvt Players' Growth Was Also Strong At ~28% YoY (vs ~15%/12% In Aug-24/Sep-23)

Private Players’ Market Share Decreased To 65.0% In Sep 2024 (Vs 68.2% in Sep-23)

Within Pvt Ins Ind, Banca Players Continued To Outperform

Agency Players’ Growth Was Lower At 17% For The Month

Growth For Q2FY25 Came In At 21%/24% YoY For The Overall Ind/Pvt Players

CLSA On Life Insurance

Pvt Insurers Had 19%/18% YoY Growth In Q2/Total APE On A Base Of 13%/11%

Individual No Of Policies Sold Were Up 13%/14% YoY For Pvt Life Insurers In Q2/H1

Strong Momentum In Ulips Persisted In Q2, Like The Last 2 Quarters

For Q2, Max Life Was Strongest At 26% YoY Growth On A Very High 39% Base

ICICI Pru Life & HDFC Life Reported 22%/23% Growth On A Tepid 3/7% Base

SBI Life Had Just 1% YoY Growth In Q2FY25 But On A High 33% Base

Expect VNB Margins To Be Range Bound In H1 Vs Q1FY25, Except Max Life

Max Life Should See 2.5% Increase In VNB Margins, As Its Q1 Margins Were Seasonally Weaker

HSBC On OMCs

Current Volatility In Oil Prices Is Beneficial For OMCs

Current Volatility In Oil Prices Discourages Any Govt Interference In Pump Prices

Weakness In Auto Fuel Price Not Surprising Given Above Normal Monsoons; Expect To Recover

Maintain Buy Call on OMCs: BPCL, HPCL, IOC

Strong Marketing Margins Offset Weakness In GRMs

JPMorgan On L&T

Initiate Overweight Call, Target Rs 4,360/Sh

Co Is Trading At 25x FY26 Core EPS With 23% EPS CAGR Over FY24-FY27

Co Offers An Attractive Combination Of Growth At A Very Reasonable Valuation

Fast EPS Growth Will Be Driven By Healthy Core Revenue Growth Of 16%

Fast EPS Growth Will Be Driven By 60 Bps Core Margin Expansion Over FY24-FY27

With Its Vast Array Of Capabilities, Large Order Book, Strong B/S & Cash Flows

L&T Is Well Suited To Benefit From Capex Tailwinds In India & Middle East

MS On CONCOR

Underweight Call, Target At Rs 774/Sh

Q2 Handling Volume Growth Was 6% (Exim 4% & Domestic 14%)

This Was Below Q2FY25 Growth Est Of 7% (Exim 5% And Domestic 20%)

Q1FY25 Growth Was 6% (Exim 4% And Domestic 15%)

CCRI Had Previously Guided For F25 Exim & Domestic Growth To Be 15% & 25%, Respectively

A 2H Growth Requirement Of 26% In Exim & 35% In Domestic Segment Will Thus Meet Annual Guidance

Citi On Just Dial

Sell Call, Target At Rs 1,075/Sh

Q2 Revenue (+9% YoY) & EBITDA (+68% YoY; +2% QoQ) Missed Est By 2%/6% Respectively

PAT Was Ahead By 27% On Higher Other Income

Paid Campaign Net Adds At +7,000 (1% QoQ/7% YoY)

Realisations Growth At +2% YoY Were Both At The Slowest Pace Since Q1FY23

On Upside, User Traffic - Key To Sustained Campaigns And Realizations Growth

User Traffic Recovered Sharply To 15% YoY (1Q: 6% YoY)

Rise estimates, As Traffic Growth Recovery Sets Stage For Better Monetisation In Subsequent Qtrs

Will Watch For Sustenance In Trends Before Potentially Turning More Constructive

EBITDA Est Are Up 10%/13%/13% Vs Earlier For FY25/26