Brokerage Views: Jefferies On RIL, CLSA On Indus Towers And More

Reliance Industries Ltd. and Persistent Systems Ltd. are in brokerages' focus as they announced earnings for the quarter and year ended March 2024. CLSA upgrades Indus Towers Ltd., saying it should be the key beneficiary of Vodafone Idea Ltd.'s fundraising and planned addition of 48,000 4G/5G sites. NDTV Profit is tracking what the brokerages are putting out on specific stocks. Here are all the top calls from the brokerages that you need to know about on Tuesday.

Jefferies On Reliance Industries

Jefferies maintains 'buy' on RIL, hikes target price to Rs 3,380 from Rs 3,140 apiece.
Ebitda in line; Jio and oil-to-chemicals were ahead, while retail was weaker.
Jio's average revenue per user led the beat on improving business mix.
Retail growth was soft, but the balance sheet improved.
Capex rose year-on-year, positive free-cash flow and net debt reduction.
Forecast 14% Ebitda growth in FY25.
Raise Ebitda estimates for Jio by 1–4%

Also Read: RIL Q4 Results Review: Brokerages Raise Target Price On Strong Growth Outlook For O2C, Jio

Nuvama On Reliance Industries

Nuvama maintains 'buy' on Reliance Industries Ltd., raises target price by 10% to Rs 3,500 apiece.
Ebitda beat the brokerage estimate by 2.5%.
O2C/Gas beat brokerage estimates by 12%/5%. Retail a miss by 8%.
RIL smartly moving up the new energy ladder by bagging several PLIs.
New energy rollout to unleash the next leg of growth.
Raises FY26 Ebitda by 8% on strong outlook.

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CLSA On RIL

CLSA has lowered RIL's s earnings per share estimates by 2–5%.
The brokerage downgraded the oil-to-telecom stocks to 'outperform' from a 'buy' rating, citing limited upside after the recent rally.
However, it raised the target price on the stock to Rs 3,300 apiece from Rs 3,060 apiece.
RIL's management highlighted that 30% of traffic on its network under 5G is not yet being monetised.
This, along with tariff hike, ramp-up in wireless broadband subs and possible listing of Jio and/or retail are potential triggers for the stock.

Also Read: RIL Cut To 'Outperform' As CLSA Sees Limited Upside After Recent Rally

Goldman Sachs On RIL

Goldman Sachs reiterates 'buy' rating and raises the price target to Rs 3,435 from Rs 3,400 apiece.
The research firm expects stronger catalysts, including a potential telecom tariff hike in the second half of 2024, stronger same-store sales growth in retail and potential unlocked through a listing of consumer and telecom units.
Potential start of a new energy giga complex in the second half of 2024.
Goldman Sachs sees potential unlock through a listing of consumer (Jio/Retail) businesses.
Risk-reward remains favourable with a 50% upside in Goldman Sachs' bull-case scenario and 14% downside in the bear-case scenario.

JPMorgan On RIL

The research firm maintains an 'overweight' rating on the stock with a target price of Rs 3,100 apiece.
Growth in fiscal 2025 should come from organic growth in Reliance's consumer businesses (Retail hopefully regaining high double-digit revenue growth) and telecom (with potential for tariff increases post elections).
The company is currently spending $10 billion on new petchem capacities and another $10 billion on creating new renewable/solar capacities, which should also help growth over the coming years.
The decline in capex and net debt is a positive.

CLSA On Indus Towers

CLSA upgrades Indus Tower Ltd. to 'buy' from 'outperform' and revised the target price to Rs 450 from Rs 335 apiece.
Indus Towers should be the key beneficiary of Vodafone Idea's fundraising and planned addition of 48,000 4G/5G sites.
Vodafone Idea's past dues settlement of Rs 57 billion could be worth an incremental Rs21/share for Indus.
Although Indus is up 150% in 12-months, it is still trading at a 60% discount to global tower peers.
With Indus's twin anchor tenants sealed, CLSA says the risk-reward has turned more favourable.

Citi On India Industrial, Utilities And Property

Fair bit of interest for regulated utilities where valuations remain reasonable.
Adani Ports and Special Economic Zone Ltd. remains top pick — Reasonable valuations and strong operating performance.
Larsen & Toubro Ltd.: Maintains 'buy' from a medium-term perspective. FY25 is likely to be a year of consolidation with moderation in growth.
Regulated Utilities: General agreement for Citi's top picks — NTPC Ltd. and Power Grid Corp.
Property: General discomfort on residential developer valuations.
Property: Reluctance to reduce exposure given strong pre-sales.
Bharat Electronics Ltd. top picks in defence theme.
Polycab India Ltd., RR Kabel Ltd. top picks in cable and wire segment.

JPMorgan On Persistent Systems

JP Morgan maintains 'overweight' with a target price of Rs 4,300 from Rs 4,400 apiece.
Expects margins to remain flat in fiscal 2025.
Target of 200/300-basis-point expansion pushed to FY25–27 from previously FY24–26.
The 10% stock decline provides an attractive entry point.
"We believe the stock rally from here will be driven by revenue outperformance over FY25".

Citi On Persistent Systems

Maintains 'sell' rating and cuts the target price to Rs 2,865 from Rs 2,910 apiece.
Management had guided for a 50–100-basis-point improvement at the start of FY24 and ended at 50 bps decline.
Second consecutive quarter of decline of top client segment.
"One of the investor pushbacks we get is that the stock continues to deliver on growth relatively vs. other peers."
Consensus was modelling in 100-basis-point margin improvement in FY25 going into Q4 while management indicated similar margins in FY25 vs FY24.
"We think there could be substantial downgrades to consensus estimates."

Jefferies On Honasa Consumer

Jefferies retains 'buy' on Honasa Consumer Ltd. with high conviction with a target price of Rs 590 apiece.
Likes management focus and agility along with a growth mindset.
The Derma Co. is now comparable in scale to popular FMCG brands like Pantene, Sunsilk.
Expects 20% growth trajectory despite slowdown in Mamaearth.
Growth over profits — growing brands before settling for optimum profitability.

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