- Review of Stocks by Top Brokerages
CITI
Buy, TP Rs 1370
Deposit growth (at 4% QoQ) outpaced peers but was dominated by non-retail TDs (up 12% QoQ).
Management signaled its focus on containing LDR & anchoring loan growth to deposit accretion.
Amidst deposit challenges, tone down advances growth est.
Bernstein
O-P, TP Rs 1250
Maintained its 1.8% RoA level despite suffering a 10 bps QoQ decline in NIM.
Strong NII growth & continued lower credit costs helped bank maintain >18% RoE
What stood out for us was a punchy 5% QoQ growth in deposits
HSBC
Buy, TP Rs 1404
Healthy loan growth, in-line NIM compression, & low credit costs were positives
Retail deposits grew a tad slower
Cut FY24-26e EPS est. 0.3-1.5%, reflecting minor adjustments to growth, NIM, & opex estimates
Expect a FY24-26e EPS CAGR of 14%
UBS on Havells
Buy, TP Rs 1880
Q3- Weak consumer weighs on growth & margins
Commentary suggests subdued demand
Key highlights
a)B2C lagging B2B
b)7% yoy top-line growth in Lloyd with slower reduction in loss run rate clearly -ve
c) Ex Lloyd topline growth far below long term avg
GS on Pidilite
Buy, TP Rs 2850
3Q PBT grew 64% YoY, driven by strong gross margin expansion & double digit vol growth
Management’s outlook remains optimistic driven by:
a) moderation in input costs
b) new initiatives like strengthening rural distribution & ramp up in new segments
MGL Review
CITI
Buy, TP Rs 1480
Solid 3Q, with EBITDA at Rs4.5bn (-6% qoq, +75% yoy), 20% ahead est.
Driven, once again, not just by a beat in margins but with vol growth also robust (grew 8% yoy) Qoq decline in EBITDA margin to Rs13.3/scm better than expected
UBS on Indus Tower
Neutral, TP Rs 220
In line Qtr; high tower adds for a single tenant is a concern
Consol. Rev up 1% QoQ while rental rev up 3% QoQ, both in line
Expect management to provide more colour on status of payments / receivables from VIL as well as on overall demand
CLSA on REC
Buy, TP Rs 510
3Q net profit of Rs33bn up 14% YoY driven by healthy growth in net interest income
Loan growth of 21% YoY strong
Expected negative credit cost in 3Q, but recoveries in one of resolved projects lower
36bp QoQ decline in GNPA is healthy
Macquarie on USL
U-P TP Rs 870
3Q standalone EBITDA ahead of est.
Standalone PAT beat sharper given higher other income
Liked healthy gross margin delivery, which suggests that moderation in other inputs like packaging as well as mix improvement
JK Cement Review
Jefferies
Upgrade to buy, TP raised to Rs 4610
Healthy 3Q beat with industry-leading vol growth/ profitability, 2nd qtr in a row
Co also announced new 6MTPA expansion with 30MTPA cap targeted by FY26 end
Upgrade FY24-FY26 EBITDA est by 5-12%
CITI
Sell, TP Rs 3625
3Q EBITDA at Rs6.1bn (up 128% yoy) on higher cement vol, realisations & lower costs
Blended EBITDA/t at Rs1330 vs Rs1028 in 2Q
Trading at EV/t of $140(expanded capacity) vs regional players at $65-130, risk reward unfavorable
MS on Tata Elxsi
UW, TP cut to Rs 7500
F3Q missed expectations, & quality of growth could have been better with higher EPD growth
Challenges persist in Media & parts of Transportation business coloring overall demand outlook
MS on L&T Holding Fin
UW, TP Rs 129
PBT missed MSe by 1% due to lower other income & higher credit costs.
Lower unsecured consumer loan disbursements (-35% QoQ), AUM (-1% QoQ), some drop in collection efficiency, & likely higher overall slippages will be key discussion points
MS on Bharti Airtel
EW, TP Rs 1015
Announces part prepayment of deferred liability for spectrum acquired in 2015 auctions
Believe this will be positive on an NPV basis over tenure of spectrum.
Assuming yield on cash of 6-7%, est. this prepayment could help earnings by 1% for F25
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