Several leading companies, including Larsen & Toubro (L&T), Voltas, Dabur, Aditya Birla Capital, Tata Power, and Biocon, announced their Q2 FY25 results yesterday. Here’s a look at their performance, along with insights from brokerage reports.
Larsen & Toubro (L&T)
L&T reported robust Q2 results, with strong contributions from its Middle East operations. However, domestic growth remained relatively subdued. UBS maintained a neutral rating on L&T with a target price of ₹4,000, implying a 17.6% upside. UBS highlighted that while the Middle East drove core results, the energy and hi-tech segments saw declines in profitability, limiting core margin improvement.
Meanwhile, BNP Paribas maintained an outperform rating with a target price of ₹4,421. BNP observed that L&T is on track to meet its order inflow guidance, with strong capex in the Middle East expected to strengthen growth through CY25. BNP also sees improved valuation after recent corrections, potentially leading to a rerating.
Voltas
Voltas reported strong profit growth in Q2 FY25, driven by margin normalization in the projects business and increased volume in cooling products. HSBC retained a hold rating with a target price of ₹1,780, indicating a 4.9% upside. The brokerage acknowledged Voltas’ successful volume-growth strategy with market share gains, but noted that growth was achieved at lower margins.
Dabur
Dabur’s Q2 results reflected challenges in the beverages segment, leading to a miss on sales and profitability. Goldman Sachs maintained a neutral rating with a target price of ₹580, projecting a 6.2% upside. The brokerage noted a sharp decline in EBITDA, driven by channel destocking and a shift in consumer preference from fruit-based beverages to aerated drinks. Management remains hopeful for mid-to-high single-digit growth in H2, contingent on favorable winter demand.
Similarly, CLSA maintained a hold rating with a target price of ₹582 for Dabur, highlighting the impact of inventory adjustments and a weak beverage segment. CLSA noted that Dabur’s acquisition of SESA could expand its Ayurvedic hair oil portfolio.
Aditya Birla Capital
Aditya Birla Capital’s Q2 results showed improved performance in Aditya Birla Finance Limited (ABFL), although Value of New Business (VNB) margins continued to decline. Macquarie maintained an outperform rating with a target price of ₹285, indicating a 32.7% upside. The brokerage cited improvements in credit costs due to a decline in the Provision Coverage Ratio (PCR), although the performance of Aditya Birla Sun Life Insurance (ABSLI) remained disappointing.
Tata Power
Tata Power posted a solid Q2, with strong performance in its renewables and Transmission & Distribution (T&D) segments. Nomura retained a buy rating with a target price of ₹560, projecting a 31.3% upside. The brokerage highlighted a 23% year-over-year growth in Renewables EBITDA and a 30% growth in T&D EBITDA, though thermal generation declined by 11%. Tata Power’s plans to export 1GW of modules from its integrated module plant further support its green energy ambitions.
Morgan Stanley also maintained an overweight rating with a target price of ₹577, indicating a 35.3% upside. The brokerage noted in-line performance in generation, T&D, and renewables, with the solar EPC business delivering a positive surprise.
Biocon
Biocon’s Q2 results were announced with noteworthy developments, though no specific brokerage comments were provided in this context.
As these companies navigate the challenges and opportunities of the ongoing financial year, investor focus will be on how each company executes its strategic initiatives and adapts to market dynamics in the coming quarters.
Disclaimer: This information is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor for any investment decisions
