Brokerage Views: Jefferies On Bharti Hexacom, Morgan Stanley On Varun Beverages And More

Jefferies India Pvt. initiated coverage on Bharti Hexacom Ltd. with a 'buy' rating and 34% upside to Monday's closing price. Citi Research has upgraded the baseline gold price forecasts to its bull-case scenario and the research firm's CIO Survey on Global IT Budget Outlook showed only a slight improvement in the budget environment. Motilal Oswal has reiterated a 'buy' on Cello World Ltd.

NDTV Profit is tracking what the brokerages are putting out on specific stocks. Here are all the top calls by the brokerages that you need to know about on Tuesday.

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Jefferies On Bharti Hexacom

Jefferies initiated coverage on Bharti Hexacom with a 'buy' rating and a target price of Rs 1,081. This implies an upside return potential of 34% from the previous close.
Offers a way to invest in faster growing parts of Airtel's business.
Offers higher ROCE and better free cash-flow conversion than Bharti Airtel.
Expects to deliver CAGR revenue growth/Ebitda of 16%/21% from FY24-27.
Capex moderation to result in 40% CAGR in free cash flow.
Hefty market-share gains in lower tele-density markets to continue.
Expects 12% CAGR in ARPU and 4% CAGR in mobile subscribers over FY24-27.
Key risks: Delays in tariff hikes and change in terms of related-party transactions.

Morgan Stanley Initiates Coverage On Varun Beverages

Morgan Stanley initiated 'overweight' coverage on Varun Beverages Ltd. with a target price of 1,701 apiece. This implies an upside of 23%.
Expects the company to deliver 19% revenue growth annually, margins to remain steady at 23.7%.
Expects market share in south and west regions to improve.
Distribution expansion of 0.4-0.5 million outlets annually fastest among food & beverages players.
Stock better placed than peers trading at 57 times CY25 EPS multiple.

Citi Research On Gold

Citi Research projects $3,000 per ounce gold over the next six to 18 months, which is 20% above the forwards and over 25% north of spot.
The recent gold rally has been aided by geopolitical heat and is coinciding with record equity index levels.
Financial gold demand seems to be playing catch-up with robust physical.
Fed cutting cycle and Treasury rally could be the bullish kicker to $3,000 per ounce.
Financial gold inflows are now catching up to retail and official sector demand.

Also Read: Gold Price Up, Up And Away But Even Chris Wood Is Struggling To Find A Justification

Citi CIO Survey On Global IT Budget Outlook

The survey showed only a slight improvement in the IT budget environment.
Overall network and traffic management IT budget growth expectations rose from 2.8% in the December 2023 survey to 2.9% in the March quarter.
IT budget inching closer towards the historical average of 3%.
Cybersecurity remained the top CIO investment priority, followed by data modernisation and digital transformation projects.
Global economic conditions appear to be stable to improving slightly.

Equirus Initiates Coverage On Zaggle

Equirus initiates coverage on Zaggle Prepaid Ocean Services Ltd. with 'long' rating
The brokerage has given a target price of Rs 400 to the stock, implying a 42% upside.
Domestic market opportunity size estimated at Rs 13,900 crore by FY27.
Coming from a recently launched vendor payments solution, Zoyer.

Nomura On Exide Industries

Nomura retains 'buy' on Exide Industries Ltd. with a target price of Rs 485 apiece. This implies an upside return potential of 18%.
Expect EV penetration in India for 2W/4W to rise from 5%/2% FY24 to 25%/20% in FY30.
More optimistic of Exide Industries' ability to win new orders from other original equipment manufacturer.
OEMs may also pay some premium for local sourcing.
Marginally realign earnings-per-share estimates by -5%/+5% for FY24-25.
Raise the multiple for the base business to 18x FY26 P/E.

Motilal Oswal On Cello World

The brokerage reiterates 'buy' rating with a target price of Rs 1,100 apiece, implying a potential upside of 34% from the previous close.
The consumer glassware segment is a key growth driver on import substitution.
Expects a narrowing gap between La Opala and Cello on capacity ramp-up.
Only large, branded player expanding in soda lime glassware vs borosilicate glassware.
Estimates CAGR of 18%/23%/25% in revenue/Ebitda/profit after tax over FY23-26.

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