Brokerage Views: Nuvama, CLSA On Tata Consumer, Jefferies On ICICI Prudential And More

Tata Consumer Products Ltd., ICICI Prudential Life Insurance Co., and Tata Elxsi are in brokerages' focus as it announced earnings for the quarter and year ended March 2024. BofA reiterates 'buy rating on Mahindra & Mahindra Financial Services Ltd.

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 Wednesday.

Nuvama On Tata Consumer Products

Nuvama retains 'buy' on Tata Consumer Products Ltd. with a target price of Rs 1,400 apiece.
Tata Consumer Products continues to drive growth via innovation, distribution expansion.
Premium and sub-premium brands accounted for over two-thirds of the revenue in tea.
Premium salt salience is now at 42% for fiscal 2024.
Growth business accounted for 18% of the India business.
Sampann portfolio recorded a robust growth of 42% in the fourth quarter.
NourishCo recorded revenue growth of 13% in the fourth quarter.
E-commerce channels grew 35%, accounting for 11% of India business.
Modern Trade recorded 9% growth in fiscal 2024.

CLSA On Tata Consumer Products

CLSA rates Tata Consumer Products with 'underperform'. The target price is Rs. 1,288 apiece.
Higher margins in unbranded business due to rise in coffee prices.
India business grew 10% year-on-year (7% on a like-to-like basis)
India beverages grew 3%, with flat tea volumes year-on-year.
Salt grew by 5% with volume growth of 3%.
Tata Starbucks revenue grew by 7% year-on-year.

Morgan Stanley On Tata Consumer Products

Morgan Stanley rates Tata Consumer Products as 'overweight' with a target price of Rs 1,305 apiece.
Progress on strategic priorities, including scaling growth businesses.
Distribution, innovation and premiumisation agenda continues.
Growth businesses, except Nourishco, performed well during the fourth quarter.
Share in India branded business rose to 18% in fiscal 2024.
Market share improved in the salt business, while the declining trend in tea continued.

JPMorgan On Tata Consumer Products

JPMorgan rates Tata Consumer Products with a 'neutral' rating. The target price is Rs 1,100 apiece.
Higher profitability of non-branded and overseas drives Ebitda beat.
Indian branded revenue growth was below expectations.
Plantation business declines 30% due to muted volumes and lower tea prices.
Weakness in Indian branded EBIT margin was offset by higher margins in international business.

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Citi On ICICI Prudential

Citi downgrades ICICI Prudential to 'neutral' from 'buy' earlier with a target price of Rs 645 apiece.
Key drivers of lower margin: unfavourable product mix and elevated distributor payouts.
Expects sustained payout pressure due to higher dependance on non-core/proprietary channels in relative to peers.
Cuts VNB estimates by 6–7%, capturing lower margins even as it raises APE forecasts.
Concerns on payouts, agility to maneuver product mix once ULIPs moderate and continued high pace of business investments, sustain.

Jefferies On ICICI Prudential

Jefferies maintains 'buy' rating on ICICI Prudential Life Insurance Co, with the target price raised to Rs 680 apiece from Rs 590.
VNB missed estimates due to a fall in margin.
Higher operating expense, mortality costs, guaranteed returns and weaker mix dragged margins.
Expects growth to improve from the current financial year.
Lower sensitivity of VNB to mortality costs and operating expenses.
Expects 16% compound annual growth rate on VNB from fiscal 2024–27.

BofA On Mahindra Finance

BofA reiterates 'buy rating on Mahindra & Mahindra Financial Services Ltd. with a target price of Rs 300 apiece.
Estimated fraud quantum of 150 crore is 8% of profit-after tax in fiscal 2024 and 15 basis points of March's AUM.
Fraud quantum is 3.7 times the disbursement/branch in fiscal 2024.
Awaits clarity on risk of similar frauds at other branches, impairment taken, process changes.
Concerns on efficacy of process transformation.

JPMorgan On Tata Elxsi

Maintains 'underweight' rating with a target price of Rs 5,800 apiece.
Growth impacted by ramp down in media and telecom clients.
Management believes demand has bottomed out in media and telecom.
Management aims to go back to fiscal 2023 margins of 28%.
The research firm remains skeptical on the margin target.
JPMorgan continues to find valuations expensive.

Morgan Stanley On Tata Elxsi

Morgan Stanley maintains 'underweight' rating on Tata Elxsi with a target price Rs 6,860 apiece.
Good commentary is not enough, given the burden of high expectations.
Valuations are expensive.
Morgan Stanley sees limited upside catalysts.

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Motilal Oswal On Cyient DLM

Motilal Oswal reiterates 'buy' on Cyient DLM with a target price of Rs 840 apiece.
Strong revenue growth, jumping 30% year-on-year; traction in defence, aerospace.
Ebitda narrowed 100 basis points; primarily due to increase in selling, general, and administrative expenses expenses.
Order book at Rs 2,170 crore as of the fourth quarter, down 11% year-on-year.
Management targeting 30% revenue CAGR over next three years.
Improving margin trajectory and return ratio target of 15% in two years.
Expects growth momentum, supported by strong order book and coupled with healthy order inflows, high customer stickiness and a strong promoter heritage.

Jefferies On 360 One WAM

Jefferies India Pvt. reiterates 'buy' on 360 One WAM and raises price target to Rs 930 apiece, implying a potential upside of 21%.
Wealth business remains in the fast lane with 35% year-on-year growth in active annual recurring revenue, assets under management and better yields.
AUM scale-up by newly added teams should bring down the cost-to-income ratio and drive a CAGR of 20% in profit after tax over fiscal 2024–27.