Buy, hold or sell?: Brokers analyse these 6 stocks

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Here are brokerage firms' views on 6 stocks

TCS

Jefferies says meeting with TCS post the revenue warning suggests macro caution holding up some discretionary spend and causing a loss of momentum in Q2FY17.

This will also put pressure on FY17 margins, it feels.

Brexit has weighed on sector sentiment although this recent restrain in spend is mostly US. While FY16 had TCS specific issues (now behind), macro has pulled down growth in FY17.

With maintaining buy rating on the stock, the brokerage house reduced its forecasts but believes risk reward remains favourable.

Jindal Steel & Power

Citi has reiterated buy rating on Jindal Steel & Power (JSPL) as valuations are cheap and cash break-even continues.

However, the brokerage house reduced target price to Rs 103 (from Rs 107) and also cut FY17/FY18 EBITDA by 18 percent/10 percent as it slashed steel sales volume by 8-10 percent and assume marginally lower steel and power prices.

JSPL continued to generate sufficient cash flows to cover interest costs despite very limited capacity utilisations and low prices for power and steel.

Its Q1FY17 EBITDA (including other income) at Rs 1,020 crore exceeded interest cost of Rs 85 crore. Operating EBITDA at Rs 98 crore grew 10 percent QoQ/-2 percent YoY and was 8 percent ahead. Despite some continuing capex, debt remained flat QoQ. Headline loss of Rs 1,080 crore included Rs 630 crore write-off of Australian mines.

Q1FY17 result was also adversely impacted by depreciation expenses on Ind-AS revaluation of assets of Rs 20,900 crore.

HDIL

JP Morgan is overweight on Housing Development and Infrastructure (HDIL) with a target price of Rs 140 after quarterly earnings.

HDIL's Q1 earnings were below expectations on INDAS-related adjustments (on project cost/receivables) and deferment of TDR (transfer of development rights) revenues. Pre-sales were muted during the quarter though offset by improved traction on TDR sales.

Net debt was flat QoQ. Over the last Q2s, the company has been working on 3-4 large FSI transactions and conclusion of any of these should drive a sharp net debt reduction going into 2H.

The brokerage house believes these can cut the company's net debt by around 40 percent from current levels.

Virar mid income development is likely to become a key contributor of HDIL's income stream over the next 4-5 years. This is a 74 million square feet (550 acre) development; one of the largest affordable housing project in India and especially Mumbai. The company is looking to sell initial FSI here to other developers.

Lupin

Bank of America Merrill Lynch has reiterated its buy rating on Lupin and highlighted it as top pick in the sector.

The brokerage house expects company’s earnings per share (EPS) to rise around 2x over next 3 years driven by 60 plus launches over the next 18 months (both Lupin and Gavis put together); strong pipeline of 149 ANDAs pending for approval from the US FDA (45 are Para-IV filings with 25 FTF); ramp up in Gavis portfolio including branded products such as Methergine; and stronger traction in other markets like Japan and India.

Despite best in class growth prospects and relatively better regulatory track record, Lupin is currently trading at 18.6x P/E FY18 i.e. 16 percent discount to 5 year average.

Axis Bank

Golman Sachs removed Axis Bank from its Asia Pacific buy list and downgraded the stock to neutral post recent outperformance, but maintained 12-month target price at Rs 626.

Since adding it to buy list on September 15, 2015, the stock has risen 27 percent against the BSE Sensex/Bank Nifty up 12 percent/22 percent. The brokerage house believes this could be attributed to enhanced confidence in asset quality post disclosures on troubled accounts; continued improvement in business profile with a well-diversified loan book, deposit mix and revenue streams driven by improving retail mix in each of these verticals which will support operating profit growth.

That said, Goldman believes current valuations are fair with likely improvement in operating metrics balancing asset quality risks.

The brokerage expects credit cost to remain elevated at 1.65 percent in FY17. As a results it expects profitability to remain weak in FY17 on higher credit costs.

Jubilant Foodworks

With retaining neutral rating on Jubilant, Goldman Sachs has lowered its FY17-19 EPS (earnings per share) 17-22 percent to reflect lower same-store-sales growth (SSSG) assumptions. As a result, it also lowered 12-month blended target price to Rs 996 (from Rs 1,100).

Key takeaways from its Q1 results - lower SSSG was driven partly by the delayed launch of the Pizza Mania initiative and Ramadan timing; Q2 performance has been significantly better to-date, and management expects improved SSSG performance; and Jubilant does not expect to take any positive pricing action for the remainder of CY16.

Goldman lowered its SSSG assumptions for FY17/18/19 to 0.0 percent/7.0 percent/8.5 percent from 4.0 percent/8.7 percent/8.7 percent.

Upside risk for the stock would be higher SSSG driven by discretionary spending while downside risk would be lower SSSG due to limited pricing power, weaker margins due to cost inflation.