City on Bajaj Finn
Buy call and reduce target to Rs 8,675
Fourth-quarter revenue was essentially flat despite a 4% regulatory impact
The outlook for FY2025 has been lowered in order to link FY2024 ROA to the long-term outlook for FY2025 itself.
Co Guide for 30-40 bps NIM Mitigation for H1 FY2025
The company’s guidance assumes the lifting of regulatory restrictions in the near future
Built-in 30 bps NIM compression, 1.7-1.8% credit cost, 26-27% AUM growth
Profit forecast for 2025/26 has been revised downward by 7%/7%
Jeffries on Bajaj Finn
Purchase, TP Rs 9260
Profits rose 21% year-on-year to Rs 38 billion, in line with expectations.
A strong 34% growth in AUM was partially offset by a decline in NIM, with NII growing 28%.
The RBI embargo impacted the fourth quarter results but is expected to ease in the second quarter.
Reduce estimates by 2-3%
Jeffries by Laurus Labs
Underperform call, target Rs 250
CDMOs have another weak quarter, again missing expectations
Administration has given a clearer view on CDMO contracts for animal health and agrochemicals
Management believes CDMO contracts for animal health and agrochemicals will expand only from FY26 onwards
The company’s EBITDA margin is expected to remain under pressure until FY2026
FY2025/2026 forecasts lowered by 15%/3% due to lower CDMO sales
Laurus Labs’ GS
Sell, price reduced to TP 325 rupees
CDMO growth is slower than expected, with growth expected in FY25.
Lowers EPS estimates from FY2025 to FY2027 by up to 8% to factor in fourth-quarter failure, slower top-line/margin growth, and revised business outlook
EBITDA margin was 16.8%, lower than expected
Cyient’s MS
Overweight call, target reduced from Rs 2,400 to Rs 2,250
Q4 revision guide weaker than expected, but margins resilient relative to peers
Q4 reiterates medium-term revenue growth and margin outlook
L&T Tech Masters Degree
Underweight call, target Rs 4,200
Q4 results missed estimates
Weak sales growth outlook factored into buy-side estimates
Margin forecast reset was a negative surprise
Considering the stock’s year-to-date outperformance and the expected EPS cut, it is expected to underperform.
CITI on L&T Tech
Sell, TP reduced to 4070 rupees
Sales in the fourth quarter were almost the same, but margins were not as high.
EBIT margin decreased mainly due to high subcontracting costs
Full FY25 CC turnover growth guidance of 8-10% (expectation is 10%+)
FY25 margin around 16% vs. consensus 18.7%
Dalmia Bharat MS
Overweight call, target lowered to Rs 2,200
Management is confident about the medium-term outlook
Margins remain under pressure in the short term given weaker prices in coming quarters
JPA integrations can be pushed out and leave overhangs
Estimates and price target lowered to reflect weak business results and outlook for the first half of 2025
nestle MS
Underweight call, target Rs 1,990
The company’s revenue beat company and consensus estimates by 9% to 10%.
See 2025 Growth and Earnings Headwinds
We believe the two new business initiatives announced are positive
Tata Steel MS
Equal weight call, target Rs 135
We believe the latest update on UK business restructuring is a positive development
UK business update positive as talks with unions cause share prices to overhang
Master’s Degree from IndusInd BK
Ou, TP Rs 1925
Positive: Asset quality has improved, retail deposit growth has been strong, and loan growth has been strong.
Negative points: Not enough NII and fees.
The balance sheet is strong with a CET-1 ratio of 15.8% and an LCR of 118%.
2% EPS reduction in F25/F26
Jeffries on IndusInd BK
Purchase, TP Rs 1940
Profit rose 15% year-on-year to 24 billion rupees, slightly below expectations.
Stable NIM and credit quality were the main positives, while high operating cost growth and lower fees held down profits.
Reported credit costs were 1.1% of the average loan amount, but 1.5% after factoring in drawdowns
HSBC talks about Tech Mahindra
Hold, TP Rs 1300
The new turnaround plan looks sensible, but implementation remains difficult, especially in the current environment
Profit margin expansion largely depends on being able to improve the pyramid while maintaining average prices, which is difficult to achieve.
CLSA on Vedanta
Buy call, target price raised to Rs 430
Q4 EBITDA was Rs 88 billion, up 3% quarter-on-quarter and 6% above expectations, mainly due to improved zinc and oil earnings.
It was surprising that net debt decreased by SEK 6,000 quarter-on-quarter due to a decrease in working capital.
Commissioning of ongoing projects across multiple segments will be a key revenue driver
Rising commodity prices are key to profits
Dividends likely to continue rising given parent company VRL’s deleveraging plans
Co is well-suited for metal upcycling with diversified commodity exposure
The company has a strong commitment to upcycling metals with ongoing capacity increase/cash reduction projects
CITI on Vedanta
Upon purchase, TP increased from 305 rupees to 425 rupees
Vedanta’s Q4 EBITDA was Rs 87.7 billion (5% forward), up 3% QoQ primarily due to lower costs and commodity price controls.
Responsibility management with Holdo gives you confidence in VED India’s balance sheet
Every $100 per tonne of zinc-lead LME impacts EBITDA by 2% and fair value by Rs/sh15.
Every $100 per tonne change in Allied LME impacts EBITDA by 4% and fair value by $30 per 100 million rupees.
For every $10 per tonne change in oil prices, EBITDA is affected by 1.5% and fair value is affected by Rs.5 per second.
Q4 EBITDA of Rs 88 billion (+3% QoQ) exceeded expectations by 6%, mainly due to improved profitability in zinc and oil.
It was surprising to see net debt fall by Rs 60 billion quarter-on-quarter.
Dividends likely to remain high given parent company’s deleveraging plans
Make good use of metal upcycling
