Jefferies | Business Upturn

Havells share price: Buy, Sell or Hold? What brokerages say after Q4 earnings beat

News Desk — Wed, 23 Apr 2025 02:35:17 +0000

Havells India delivered a strong Q4FY25 performance, posting a 20.2% YoY jump in revenue to ₹6,543 crore and a 15.7% rise in net profit to ₹517 crore. Earnings per share also improved to ₹8.26 from ₹7.13 YoY. The robust performance was driven by healthy growth in Lloyd and cables & wires segments, prompting a range of reactions from brokerages — spanning from ‘Neutral’ to ‘Buy’ — depending on the outlook for margins and demand recovery.

Morgan Stanley on Havells share price (Overweight | Target Price: ₹1,942)

Morgan Stanley maintained its Overweight stance, noting a 4% revenue beat led by Lloyd’s 40% YoY growth and a 20% YoY rise in emerging categories. EBIT margins outperformed expectations across all segments, especially in ECD, Lloyd, and others, while Switchgear, Lighting & Cables saw some decline. Revenue (ex-Lloyd) grew 14% YoY, with EBIT margins (ex-Lloyd) at 13.9%, still better than the 12.8% estimate.

Nomura on Havells share price (Buy | Target Price: ₹1,873)

Nomura reiterated a Buy call, stating that Q4 margins were ahead of estimates and highlighted demand tailwinds in Cables & Wires (C&W) and Lloyd. It expects 15-16% revenue growth (ex-Lloyd) over FY26-27 driven by operating leverage. The brokerage sees current valuations at 44x FY27F EPS as attractive considering the positive outlook.

JP Morgan on Havells share price (Neutral | Target Price: ₹1,700)

JP Morgan remains Neutral, saying the margin-led Q4 beat was slightly offset by a cautious near-term demand narrative. It noted better-than-expected revenue growth in Cables (+21%) and Lloyd (+39%). EBIT margin improvements in Switchgear (+750bps q/q), ECD (+120bps y/y) and Lloyd (+340bps y/y) were significant, though management stayed non-committal on medium-term guidance.

Jefferies on Havells share price (Hold | Target Price: ₹1,800)

Jefferies maintained a Hold, pointing to strong Q4 performance driven by C&W (+21%) and Lloyd (+40%), which boosted operating leverage and PAT. However, it warned of headwinds from urban inflation and commodity volatility. The high valuation — 60x FY26e PE, 30% above the 10-year average — also prompted caution.

CLSA on Havells share price (Outperform | Target Price: ₹1,915)

CLSA sees Havells as a solid performer, rating it Outperform. Q4 revenue/EBITDA growth stood at 20%, with Lloyd and C&W leading the way. The brokerage acknowledged strong primary offtake for Lloyd but highlighted weakness in secondary sales due to a delayed summer. It cut the target multiple to 55x (from 60x) due to rising competition in C&W.

Nuvama on Havells share price (Buy | Target Price: ₹1,890)

Nuvama is bullish, citing a strong all-round beat in Q4. Revenue rose 20% YoY, exceeding estimates by 16%, led by C&W (+21%) and Lloyd (+40%). EBIT margins improved by 230bps YoY, supported by performance in Switchgear and Lloyd. That said, it noted concern over secondary RAC sales, particularly in southern India during March and April.

Disclaimer: The above views are of the brokerages and not of the publication or author. Investors are advised to consult their financial advisors before making any investment decisions.

Jefferies maintains buy call on TVS Motor, cuts share price target to ₹3,270; sees 26.9% upside from CMP

News Desk — Thu, 24 Oct 2024 02:38:36 +0000

Jefferies has maintained its buy rating on TVS Motor but has cut the share price target to ₹3,270, indicating a 26.9% upside from the current market price (CMP). In Q2, TVS Motor’s EBITDA grew by 20% year-on-year but fell short of estimates by 4%, with EBITDA margin rising by 20 bps quarter-on-quarter.

TVS expects domestic 2-wheeler (2W) sales to grow by 7-8% in Q3, with the company outpacing the industry’s growth. Jefferies believes TVS will benefit from the revival of 2-wheeler demand in both domestic and export markets, with an improving franchise driving further margin expansion.

The brokerage has also cut its FY25-27 EPS estimates by 3-4% but still expects EPS to more than double over FY24-27.

Currently, TVS Motor’s stock is trading at ₹2,577.95.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.

Jefferies upgrades IIFL Finance to Buy from Hold, stock surges over 10%

News Desk — Fri, 20 Sep 2024 04:16:26 +0000

At 9:44AM, shares of IIFL Finance surged 10.12% to ₹546.15 after Jefferies upgraded the stock to ‘Buy’ from ‘Hold’, with a revised target price of ₹595. The stock witnessed strong buying interest following positive commentary on the company’s growth outlook.

Jefferies’ Key Insights:

Gold loan disbursements are expected to ramp up gradually and normalize over the next 1-2 quarters, with the gold loan book estimated to be around ₹90 billion by September 2024 due to the unwinding of the existing portfolio.
The report acknowledges that rebuilding the gold loan portfolio to pre-ban levels will take time, as the company faces challenges such as high rundown rates and difficulty in regaining market share and customers.
However, higher gold prices are seen as a tailwind that could support growth for IIFL Finance, with profitability expected to recover from FY25e lows and grow at a 50% CAGR over FY25-27.
As IIFL rebuilds its gold loans, margin pressure should ease, contributing to a more robust financial performance going forward.

This upgrade and the positive outlook have led to a sharp rise in IIFL Finance shares, signaling investor confidence in the company’s growth trajectory in the coming years.

Jefferies upgrades Bharti Airtel to Buy, expects stock to rally 20.5% from current price

Markets Desk — Fri, 13 Sep 2024 01:50:21 +0000

Jefferies has upgraded its rating on Bharti Airtel to “Buy” and raised the target price to ₹1,970 per share, indicating a potential upside of 20.5% from the stock’s closing price of ₹1,634 on September 12. The revised target reflects Jefferies’ positive outlook on Bharti Airtel amidst a competitive telecom landscape.

Jefferies anticipates that increased competition from Jio and continued market share losses by Vodafone Idea (VIL) may prompt several tariff hikes in the coming years. Consequently, the brokerage has raised its FY26 and FY27 India revenue and EBITDA estimates by 5-9%, incorporating a projected 10% tariff increase in mid-FY26 in addition to the 10% hike previously modeled for 2QFY27.

The brokerage believes that Bharti Airtel is expected to deliver a strong 19% EBITDA compound annual growth rate (CAGR) over FY24-27, alongside lower capital expenditures, which should support a 23% CAGR in free cash flow to equity (FCFE) and drive substantial stock returns.

Jefferies increases target price for Chola Investment and Finance, expects stock to rally 18.03%

Markets Desk — Thu, 12 Sep 2024 02:14:55 +0000

Jefferies has upgraded its target price for Chola Investment and Finance Company Limited (Chola Invest) to ₹1,800 per share, signaling an 18.03% potential upside from the stock’s September 11 closing price of ₹1,525. The revised target reflects confidence in Chola Invest’s robust loan growth and favorable conditions for net interest margins (NIMs).

The brokerage anticipates Chola Invest’s loan growth to maintain a strong 27% rate in FY25, despite softer trends in select auto segments. The company is expected to benefit from its high proportion of borrowings linked to T-Bills, which should result in more immediate gains from easing interest rates compared to its peers. Operational leverage is anticipated to boost new business return on assets (RoA) by 100 basis points, lifting the group RoA by 22 basis points.

Jefferies projects an impressive 29% compound annual growth rate (CAGR) in EPS for FY24-27, underlining the company’s strong growth prospects.

Jefferies turns bullish on Mahanagar Gas, expects stock to rally 18% from hereon

Markets Desk — Thu, 12 Sep 2024 02:12:36 +0000

Jefferies has reiterated its bullish stance on Mahanagar Gas Limited (MGL), raising its target price to ₹2,120 per share, an 18% upside from the stock’s closing price of ₹1,810 on September 11. The upgrade reflects an optimistic outlook for MGL’s volume growth, bolstered by accelerating retail outlet additions and robust inter-corporate volume growth.

Despite the challenges posed by decreasing APM (Administered Pricing Mechanism) gas allocations, which represent a structural headwind for City Gas Distributors (CGDs), MGL is expected to navigate these difficulties more effectively than its peers. The company’s margin defense is notably stronger due to its lower reliance on expensive spot LNG.

Jefferies has also raised its volume growth estimate for FY25, positioning MGL as a preferred pick in the CGD sector. This positive outlook is driven by the company’s strategic advantage and operational resilience in a competitive market.

Jefferies upgrades Zydus Life to Buy, expects stock to rally 30%

Markets Desk — Wed, 28 Aug 2024 02:00:47 +0000

Global brokerage firm Jefferies has upgraded Zydus Life to a “Buy” rating, raising its target price to Rs 1,450. This target price for Zydus Life shares implies a 30% upside from the current market price of Rs 1,113 on the NSE. The upgrade comes after a recent correction in the stock, which Jefferies believes presents a compelling buying opportunity.

Jefferies’ investment thesis for Zydus Life is grounded in the company’s robust pipeline in the United States, with expectations of at least one major product launch annually, generating USD 80-100 million in revenue. This strong US pipeline, combined with improved growth prospects in India, is expected to drive sustained elevated sales and margins for the company.

However, Jefferies also cautions that Zydus Life’s high reliance on the US market makes it a high-risk, high-reward investment, due to the volatile nature of the US generics industry. Despite these risks, the firm sees significant potential upside in the stock, given the strength of its upcoming product launches and overall growth strategy.

Jefferies initiates coverage with Buy rating on Emcure Pharma, expects stock to rally 15%

Markets Desk — Mon, 26 Aug 2024 01:50:41 +0000

Jefferies has initiated coverage on Emcure Pharma with a ‘Buy’ rating and set a target price of Rs 1,600 per share, indicating a 15% upside from the current market price of Rs 1,385. The brokerage firm highlights Emcure Pharma’s strong capabilities in developing complex molecules, which sets it apart in the competitive pharmaceutical landscape.

A key differentiator for Emcure Pharma, according to Jefferies, is its lack of exposure to the volatile U.S. market, allowing the company to focus on high-growth regions like India and Canada. The firm expects operational leverage and ongoing debt reduction efforts to further bolster the company’s financial health.

Jefferies projects an 11% compound annual growth rate (CAGR) in revenue over FY24-27, driven by market share gains in India and new product launches in export markets. Additionally, the firm anticipates a robust profit CAGR of 29% during the same period, underscoring Emcure Pharma’s potential for significant earnings growth.

With these factors in mind, Jefferies views the stock as attractively valued at current levels, making it a compelling investment opportunity.

Jefferies raises Zomato’s target price to Rs 335 per share post Paytm entertainment business deal

Markets Desk — Thu, 22 Aug 2024 01:41:24 +0000

Jefferies has upgraded its target price for Zomato to Rs 335 per share, following the company’s acquisition of Paytm’s entertainment ticketing business. Jefferies has a Buy rating on Zomato stock. This move comes after months of speculation and is seen as a strategic extension of Zomato’s “going out” segment, establishing a third clear growth vector for the food delivery giant, said Jefferies.

The acquisition is expected to bolster Zomato’s position in the market, providing a new revenue stream in the form of entertainment ticketing, said the brokerage. Unlike its previous foray into the grocery sector with Blinkit, which faced high capital intensity, the entertainment ticketing business promises a lower capital intensity and a higher return ratio in the steady state, akin to Zomato’s core food delivery operations, according to Jefferies.

The strategic question now is whether Zomato can replicate its success in the highly competitive entertainment sector, where it will be up against established leader BookMyShow.

On August 21, Paytm announced to sell its entertainment ticketing business to Zomato for ₹2,048 crore in cash. This transaction allows Paytm to concentrate more on its core operations in payments and financial services, which have become increasingly crucial amid recent challenges faced by the fintech giant.

As of Q1, Zomato has a substantial cash reserve of ₹12,539 crore, which will facilitate this acquisition without straining its financials. The sale marks a pivotal moment for Paytm as it realigns its business strategy to enhance shareholder value and focus on its core financial services.

The entertainment ticketing segment, which includes movie, sports, and live event tickets, reported ₹297 crore in revenue and ₹29 crore in adjusted EBITDA for the fiscal year 2024. Paytm’s parent company, One97 Communications Limited, emphasized that this deal reflects the value created through its ticketing ventures and reinforces its commitment to improving shareholder value.

The deal involves the transfer of ownership of Paytm’s entertainment ticketing business, including the platforms TicketNew and Insider, to Zomato’s subsidiaries. Approximately 280 employees from the ticketing division will also join Zomato as part of the agreement. The transaction is structured on a cash-free, debt-free basis, with the final value subject to adjustments based on cash and net working capital at the closing.

This acquisition signals a new chapter for both companies, with Zomato expanding its horizons and Paytm sharpening its focus on its core financial operations.

Jefferies upgrades Indigo to Buy, raises target to Rs 5,225, expecting 21% upside in stock

Markets Desk — Wed, 21 Aug 2024 11:12:03 +0000

Jefferies has upgraded IndiGo (Interglobe Aviation) to a “Buy” rating from its previous “Hold,” raising its target price to ₹5,225 from ₹4,400. This revised target represents a potential 21% upside from the closing price today of ₹4,299 on the NSE.

Jefferies’ bullish outlook on IndiGo comes after the airline consistently outperformed expectations over the last 12-18 months, despite facing significant operational challenges. The investment firm noted several key factors that have driven IndiGo’s strong performance, including the airline’s ability to mitigate the impact of engine-related groundings, securing better-than-expected compensation from original equipment manufacturers (OEMs), and effectively managing cost headwinds such as expensive secondary leasing, rising airport charges, and pilot compensation inflation.

Furthermore, IndiGo has maintained healthy yields and spreads, benefiting from a tight industry capacity situation, said Jefferies. While global supply chain challenges for aircraft manufacturers persist, IndiGo is well-positioned to capitalize on new growth opportunities, keeping it at the forefront of the aviation industry, brokerage added.

Jefferies has also raised its earnings per share (EPS) estimates for FY26 and FY27 by 6-7%, driven by an improved outlook on spreads between revenue per available seat kilometer (RASK) and cost per available seat kilometer (CASK). The firm now expects a RASK-CASK spread of 47-49 paise in FY25-27, compared to 58 paise in FY24, still comfortably above the historical average of 42 paise seen between FY11 and FY18.

Exchanges, retail-focused brokers most affected by SEBI’s proposed F&O guidelines

News Desk — Wed, 31 Jul 2024 05:06:21 +0000

The Securities and Exchange Board of India (SEBI) has proposed new measures to reduce speculation in futures and options (F&O) trading. Brokerage firm Jefferies has analyzed the potential impact of these changes.

Key Points:

SEBI plans to remove 12 out of 18 weekly option contracts.
The new rules could affect about 35% of F&O premium.
The impact might be limited to 20-25% if trading moves to remaining products.
Retail traders may face challenges due to increased lot sizes and higher margins near expiry.

Different Market Players Will Be Affected Differently:

Exchanges and brokers focused on retail clients are likely to be most affected.
BSE might see a 7-9% drop in earnings per share (EPS) from 2025 to 2027 due to the removal of the Bankex weekly contract.
Clearing members like Nuvama, who work with institutional players, may see less direct impact but could face some secondary effects.
Jefferies suggests that increased trading in remaining products could offset some negative impacts on earnings.

The analysis includes a table from Jefferies showing how different market segments might be affected:

Capital Market Segment	Impact of F&O Changes	Key Listed Players
Discount Brokers	Very high	Angel One
Exchanges	Very high	BSE, MCX
Traditional Brokers	High	MOFSL, IIFL Sec, ICICI Sec
Clearing Members	High	Nuvama
Depositories	Low	CDSL, NSDL
Wealth Managers	None	360 One, Nuvama, Prudent Corp
AMCs	None	HDFC AMC, Nippon, UTI AMC, ABSL AMC
RTAs	None	Kfin Tech, CAMS

Jefferies notes that if the industry-wide impact of SEBI’s measures is moderate, it could even lead to improved earnings forecasts for some players.

Jefferies analyzes exit polls: Higher numbers to boost capex stocks, SMID caps may pause

News Desk — Mon, 03 Jun 2024 03:53:44 +0000

Jefferies, a prominent global investment bank, has provided its analysis of the recent exit poll numbers and their potential impact on the Indian stock market. The firm notes that the exit poll numbers are higher than expected, suggesting a strong performance by the Bharatiya Janata Party (BJP) in the recently concluded elections.

According to Jefferies, if the actual election results align with the exit poll predictions, it will be a sentimental positive for capital expenditure (capex) stocks. This implies that companies involved in infrastructure development and other capital-intensive projects may experience a boost in investor confidence and potentially see their stock prices rise.

The analysis highlights the market’s anticipation of a BJP victory and the potential for increased investment in infrastructure and development projects. Capex stocks, which are sensitive to government policies and spending, could benefit from the expected continuity and stability of a BJP-led government.

However, Jefferies also points out that small and mid-cap stocks (SMID caps) may experience a near-term breather following the election rally. SMID caps have likely seen a surge in prices leading up to the elections, driven by investor optimism and expectations. After the election results are announced, these stocks may undergo a temporary pause or correction as investors reassess their positions and expectations.

The potential near-term breather in SMID caps could be a result of profit-taking by investors who have benefited from the pre-election rally. It may also reflect a shift in focus towards larger, more established companies that are expected to benefit from the government’s policies and spending plans.

M&M Share Price Today: Jefferies double upgrades stock post Q4, expects 22% upside from current levels

Markets Desk — Fri, 17 May 2024 02:27:56 +0000

Jefferies in its post earnings note on M&M has double upgraded the stock to Buy from Hold and has significantly increased its target price for M&M shares. Jefferies now has a target of Rs 2,910 for M&M shares, this is 22% higher than the closing price of M&M shares on May 16 (Rs 2,371).

M&M’s Q4 net profit surged 32% to Rs 2,038 crore amid robust performance in the automotive segment, favourable product mix, and operating leverage benefits. The company’s net profit was at Rs 1,549 crore in the same period last year. Revenues for the automaker came in at Rs 25,109 crore in Q4 against Rs 22,571 crore a year ago.

Jefferies believes that the tractor industry is in a late downturn. The brokerage remains optimistic that the company’s SUV portfolio continues to strengthen further as it plans to launch 13 new SUVs by 2030.

ONGC share price jumps 5% today after Jefferies initiates coverage with Buy rating

Markets Desk — Mon, 15 Apr 2024 06:10:47 +0000

ONGC share price jumps over 5% in trade to hit an intraday high of Rs 279.25 against its previous close of Rs 265.70 after brokerage firm Jefferies initiated coverage on the stock with a Buy rating, setting a price target of Rs 390 per share. The initiation comes with a comprehensive analysis of ONGC’s recent performance and future prospects, shedding light on key factors influencing the investment decision.

Reforms in crude and gas pricing have propelled ONGC’s profitability beyond levels witnessed in the past decade, Jefferies said in its latest note.

The brokerage also points out that this aspect of ONGC’s financial health is not adequately reflected in the current valuation. Furthermore, the brokerage said that despite the improved profitability and strong free cash flow generation, ONGC’s stock is trading at a steeper discount to Nifty compared to its long-term average. Jefferies suggests that the current valuation does not fully capture the positive trajectory of ONGC’s financial performance.

Moreover, Jefferies expresses confidence in ONGC’s domestic production, foreseeing a return to growth over the period from FY24 to FY26. The report anticipates profitability in the KG basin production segment, even in the face of higher operating expenses.

The analysis assumes a conservative 1% production growth over FY24 to FY26, without banking on a resolution in ONGC Videsh. Furthermore, Jefferies predicts a notable reduction in the consolidated net debt-to-equity ratio from 0.32x to 0.16x over the same period.

Bandhan Bank Share Price: Brokerages turn ‘extremely’ negative amid surprise resignation of MD & CEO

Markets Desk — Sun, 07 Apr 2024 16:54:54 +0000

Shares of Bandhan Bank in focus as brokerages, analysts turn negative and cautious on the stock and the bank’s future prospects after the surprise resignation of MD & CEO, Chandra Shekhar Ghosh, who led the bank and its growth in the last several years. “The resignation of Mr Ghosh, has come as a negative surprise as the Board had approved (refer link) his re-appointment for three years in Nov’23,” said ICICI Securities in its latest note.

ICICI Securities further changed its rating on the stock from Add to ‘Under Review’, stating the their rating and target price for the stock stays suspended until further clarity. ICICI Securities had a target price of Rs 250 on the stock. “ We believe the stock price ahead could tread divergently vs underlying business or financial performance until more clarity emerges on MD & CEO succession,” the brokerage said.

Foreign brokerage firm Jefferies also cut its target price on the stock from Rs 290 to Rs 170 and downgraded its rating to Underperform from Buy earlier. Jefferies too believes that succession is the key thing as most of the senior management is also new at the bank. The uncertainty around the matter could also lead to slower growth and higher credit costs, Jefferies said in its note. “Given the uncertainty, we are lowering our growth outlook and credit cost estimates for FY25-26, driving our EPS down by about 10-14%,” said Jefferies.

BPCL share price jumps 5% as Jefferies expects more 36% upside in stock

Markets Desk — Fri, 16 Feb 2024 04:11:49 +0000

Shares of BPCL surge over 5% in trade, also being the top Nifty gainer in the morning trade following a positive upgrade from Jefferies. Jefferies has upgraded the stock to a Buy rating from an Underperform rating earlier, also raising its price target for the stock to Rs 890 against Rs 415 earlier. The target price of Rs 890 translates into a 36% upside in the BPCL stock price from yesterday’s close of Rs 652.

Jefferies believes that BPCL offers the highest margin of safety among all other oil marketing companies including HPCL and IOC. They have an Underperform rating on HPCL and a Hold rating on IOC. However, Jefferies believes that rising crude prices and narrowing discounts on Russian crude can be a risk for BPCL.

As of 9:30 AM, shares of BPCL were up 3.8% at Rs 677.60. In the last three months, BPCL share price has delivered returns of 72% and more than 110.8% in the last one year.

Stock Market update: Hindalco shares up by 2.60% as Jefferies retain ‘Buy’ rating

Shifali Gorka — Wed, 12 Jan 2022 06:30:56 +0000

The share price of Hindalco Industries Limited grow by 2.60% in an early trade today. The share price hit a high of Rs. 499 per equity share on Wednesday, 09:42 AM IST. However, today’s trade opened at Rs. 494 per equity share. The aluminium and copper manufacturing industry Hindalco witness a surge in its share price as American Investment company, Jefferies Group retain the Buy rating.

The investment company Jefferies downgraded the stocks of steel industries like Tata Steel and Jindal Steel on the ground that the steel industry earnings are “inflecting down” due to poor demand and pricing environment. And, the major reason behind weak pricing is the shutdown in the Chinese economy as China is the biggest consumer of steel.

“We lower our optimism on India metals as we enter 2022. Weak macro and demand concerns in China are weighing on metal prices,” Jefferies India said in a note.

Therefore, downgrading of the steel industry has proved to be beneficial for the aluminium industry. According to Jefferies, shifting the focus on transitional metals such as Aluminum and copper as new capital expenditure in China will prove to be beneficial for companies like Hindalco Industries.

“We find Novelis also well-placed for the global shift to aluminium from steel in autos, and from plastics & glass in beverage cans,” Jefferies India said. In addition to the bright fundamental outlook, Jefferies also believes Hindalco’s 1.2 times one-year forward price-to-book value is attractive for a company pegged to give a 16 percent return on equity in 2022-23.