Brokerage Radar: Morgan Stanley ups Gujarat State Petronet's price aim, Antique Broking bullish on defence cos

Brokerage Radar

Check out the latest brokerage calls and analyst comments on the stocks in action today. Our coverage includes stocks such as Thermax, Gujarat State Petronet, and sectors such as banking, chemical, and industrials.

HSBC On Thermax
Reduce Call, Target `2,400/Sh
Underlying Demand Remains Strong But Growth Tapering Down
Difficult To Justify Valuation At Current Level
Current Share Price Factoring In 8.5% Terminal Growth, But Not Cyclical Risks
Stock Currently Trades At 48x 12 m Fwd Consensus Earnings

Morgan Stanley On Gujarat State Petronet
Equal-Weight Call, Target Raised To `452/Sh
Restructuring Of GPSC Grp Removes Co’s Holdco Discount From Its Ownership In Gujarat Gas
Move Rating & Price Target In-line With Guj Gas As Restructuring Is Expected To Be Done By Aug’25

Antique On Defence CosMaintain Buy Call On HAL, BEL, Bharat Dynamics, Mazagaon Dock & Garden Reach
Approval To Proposals Worth `1.44 Lk Cr Should Be Feasible
Most Of The Announced Proposals Are To Be Sourced From Domestic Industry
This Is A Tremendous Opportunity For Indian Defence Manufacturers

Morgan Stanley On Banks
Downgrade Federal Bk To Underweight From Equal-Weight, Target Cut To `185/Sh From `200/Sh
Reiterate Underweight Call On RBL Bank, Target Cut To `210/Sh From `260/Sh
ICICI, Kotak, & Axis Remain Key Pick With Marginal Target Cut
Equal-Weight Call On SBI, Target Cut To `800/Sh
Equal-Weight Call On Bank Of Baroda, Target Cut `265/Sh
Underweight Call On PNB, Target Cut To `73/Sh
Underweight Call On Bk Of India, Target Cut To `110/Sh
Underweight Call On Canara Bank, Target Cut To `83/Sh
It Is Time To Get Selective
Margin & Asset Quality Set To Normalize In Next Few Years
Margin & Asset Quality Set To Drive Divergence In Profitability Based On Franchise Strength
Large Private To Do Better & See Higher Relative Valuations
Shift Further Away From SoE Banks/Mid-sized Private Banks Toward Large Private Banks
At State-Owned Enterprise (SoE) Banks, See A Big Trade Off Between Growth & Profitability
Mid-sized Pvt Bks Are Structurally More Challenged In This Cycle, Given High Competitive Intensity

Morgan Stanley On Chemicals
Downgrade Aarti Ind To Underweight Call, Target Cut To `568/Sh From `613/Sh
Upgrade PI Ind To Equal-Weight Call, Target Raised To `4,300/Sh From `3,350/Sh
Prefer Deepak Nitrite With Overweight Call, Target Raised To `3,295/Sh From `2,975/Sh
Monetisation Remains In Play, Albeit At Significantly Lower Margins
Earnings Not Fully De-risked, With Upgrades Still Some Time Away

Jefferies On Industrials
Top Picks – Siemens, HAL And L&T
Q1 Order Flow Declined 3% YoY Led By Defence Cos Bharat Electronics & Data Patterns
Bharat Electronics & Data Patterns Saw Sharp Declines In Order Flow
May’24 National Elections Did Have An Impact On Order Flow
Believe Order Flow Should Recover Ahead As Power & Defence Capex In Particular Pick-up
Operating Leverage Was Seen For Most Companies
Remain Constructive On Infra+Industrial Capex

Jefferies On Pipe Cos
Buy Call On Supreme Ind, Target `6,520/Sh
Hold Call On Astral, Target `2,115/Sh
In 6 Months, Supreme Ind Has Rallied By +26%, Whereas Astral Declined By 7%
Supreme Ind’s Pipe Volume Growth Has Outpaced Astral For Last 10 Quarters
Supreme Ind’s 2-Yr Volume CAGR At +33% Vs 24% For Astral
Supreme Ind’s Pipe SKU Count At Nearly 14,000 Is Double That Of Astral
In FY24-27e, Est Astral’s EPS CAGR At +26-27%, Broadly Similar To Supreme Ind, At 24-25%

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