Indian equities are likely to react today to several fresh brokerage views on key stocks. Here’s a roundup of the top brokerage calls for July 4:
Reliance Industries (RIL)
Morgan Stanley has maintained an Overweight rating with a target price of ₹1,617 per share. The brokerage sees generative AI as a significant growth lever as the company restructures its Jamnagar energy complex. It estimates a value creation opportunity of up to $60 billion from the New Energy vertical. Reliance plans to integrate electrons into its processes to power chemicals, data centres, and refineries. Panel pricing globally has stabilized, with 2024 marking a challenging year for large players who turned free cash flow negative. However, increased capital expenditure and disciplined pricing are seen as positives. Morgan Stanley expects the coming quarter to support investor confidence in earnings quality, with the refining, chemicals, and retail segments likely meeting expectations.
Bajaj Finance
Morgan Stanley also reiterated its Overweight call on Bajaj Finance, assigning a target price of ₹1,050. The company’s assets under management (AUM) grew by 5.9% QoQ and 24.6% YoY, aligning closely with the 25% YoY forecast. In a slowing credit growth environment, this is viewed positively. Its lower exposure to vehicle finance and strong new customer acquisition numbers—4.69 million in Q1, up 5% YoY—suggest that the firm is on track to meet its FY26 AUM growth guidance of 24–25%. Investor focus now turns to commentary around credit costs and sustainability of AUM growth.
Bandhan Bank
Nomura has a Neutral rating with a target of ₹165. The bank’s pre-Q1 update pointed to soft loan growth and a significant drop in CASA ratio by 430 basis points to 27.1%. Collection efficiency fell slightly in both microfinance and non-microfinance segments, with an overall decline of 20 bps QoQ to 97.7%.
L&T Finance
Morgan Stanley has maintained an Underweight rating on L&T Finance with a target of ₹135. The retail loan book rose 18% YoY in Q1, slightly lower than the previous quarter’s 19%. Retail disbursements grew at the same pace. While the company is making long-term structural changes with its retail focus, Morgan Stanley notes that its return on equity remains below its cost of equity, making current valuations appear stretched.
Trent Ltd.
Morgan Stanley has an Overweight stance on Trent, setting a target of ₹6,359. The company continues to pursue aggressive expansion, aiming to scale its business tenfold from FY23 levels. Management is guiding for a 25–30% CAGR over the next five years and plans to add around 250 new stores annually. The firm is not overly concerned about competitive pressures, with a belief that there’s room for multiple players. Management also emphasized the importance of full-year performance rather than quarterly fluctuations.
Bank of Baroda
Morgan Stanley has issued an Underweight call with a target of ₹235, citing moderation in domestic loan growth. While still above the system average, the bank’s loan-to-deposit ratio remains high, which may limit further loan expansion if deposit growth stays muted.
Nomura, meanwhile, has a Neutral view with a target of ₹265. The Q1 update flagged subdued loan and deposit growth, margin compression, and weak fee income. However, strong treasury gains are expected to partially offset the weak core operating performance.
Marico
Nomura has a Buy rating with a target of ₹800. The Q1 update showed stronger-than-expected volume and sales, though EBITDA was largely in line. Gross margin pressures are expected to ease in the second half of FY26. The company remains committed to its double-digit revenue growth guidance.
Morgan Stanley is more cautious with an Equal-weight rating and a target of ₹674. It highlighted strong topline growth of 20% and a rebound in VAHO (value-added hair oils). Management expects a gradual recovery supported by easing inflation, a favourable monsoon, and policy support.
IndusInd Bank
Motilal Oswal has a Neutral call with a target of ₹800. The bank’s operating performance is expected to improve gradually, with return on assets (RoA) seen hitting 1% by FY28. Business growth is forecast to remain subdued in the near term, with estimated loan growth of 7% YoY in FY26. The bank plans to reduce high-cost liabilities, although short-term growth may stay muted. Credit costs are likely to remain elevated, but a steady recovery in the microfinance business could help ease pressure.
Disclaimer: The views and recommendations expressed above are those of the respective brokerage firms. They do not represent the views of this publication and are not investment advice. Investors are advised to consult with certified financial advisors before making any investment decisions.
