Brokerage houses, including Jefferies, CLSA, Morgan Stanley, and Goldman Sachs have highlighted key stocks and sector trends that could influence market action. Here’s a breakdown of the latest views without exaggeration or assumptions.
RBI Forex Cap May Impact Banking Sector Earnings
Jefferies flagged a key regulatory development after the Reserve Bank of India capped banks’ net open position (NOP) in the onshore forex market at $100 million.
The move comes amid sharp depreciation in the Indian rupee and a widening gap between offshore non-deliverable forward (NDF) markets and onshore rates. While the cap may support the rupee, banks may need to unwind large forex positions by April 10.
Jefferies estimates these positions could be in the range of $30–40 billion across large domestic and select foreign banks. This unwinding may result in mark-to-market (MTM) losses in the fourth quarter. The banking sector has reportedly sought regulatory leniency.
HDFC Bank
Jefferies maintains a Buy rating, noting the stock has declined 24% year-to-date, underperforming peers.
The correction is attributed to concerns over leadership transition and geopolitical tensions in West Asia. However, current valuations—around 1.6x FY27E adjusted price-to-book and 13x price-to-earnings—are seen at a discount to historical levels and investment banking peers.
The brokerage indicates that asset quality, growth outlook, and return on equity remain stable. Resolution of board-level uncertainties, including clarity on CEO tenure and chairman appointment, may support a re-rating.
Avenue Supermarts
DMart has added nine stores in the last three days, taking its total store count to 481. Annual additions stand at 66 stores, exceeding expectations of 60.
Quarterly additions have also accelerated, with 39 stores opened so far compared to 28 in the same period last year. The pace of expansion remains a key operational indicator.
Jubilant FoodWorks
Morgan Stanley maintains an Overweight rating but flags operational challenges.
The company has reported constrained LPG supply across parts of its store network. Mitigation measures include shifting to electricity and piped natural gas.
This disruption is expected to have a temporary impact on Q4FY26 performance. If the issue persists during the IPL season (March 28 to May 31), the impact could extend into Q1FY27.
QSR Sector
Goldman Sachs indicates that LPG supply constraints are affecting multiple quick-service restaurant (QSR) players, though the intensity varies.
Higher input costs are likely across the sector, putting pressure on margins in the near term. Prolonged supply issues could also lead to operational disruptions and secondary demand effects.
OMCs Outlook: Elevated Earnings Pressure
Goldman Sachs notes that the recent ₹10/litre excise duty cut on fuel provides limited relief to oil marketing companies.
Despite adjustments, earnings pressure remains elevated due to high crude prices and a weaker rupee. The breakeven crude level has shifted but remains significantly below current price levels (~$122/bbl).
The brokerage highlights:
- Continued EBITDA pressure across integrated OMCs
- Export tax on diesel offers partial support for Hindustan Petroleum Corporation Limited
- Risk-reward appears least favourable for Indian Oil Corporation, with downside scenarios indicated
- Neutral stance maintained on Bharat Petroleum Corporation Limited
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