MS on Niva Bupa
Initiate Equal-weight with TP of Rs 88
Good franchise to play secular opportunity
Think Niva Bupa is well placed to capitalize on the secular growth offered by India’s health insurance industry
It will be among the few to deliver mid-teens IFRS ROE amid intense competition
Expect its combined ratio to improve from 98.8% in FY24 to 95.3% in FY29, led by scale
Build in a 24% gross direct premium income (GDPI) CAGR over FY24-29
Relative to Overweight rated stocks, upside appears capped
DAM Capital Initiates on JSW Infra
BUY rating and a DCF derived TP of Rs400/share (+30% upside)
JSWIL, India’s fastest-growing port operator (17% CAGR), boasts a 19% pre-tax ROIC and a debt-free balance sheet (Sep’24).
Recent acquisition of Navkar Corp would mark a tectonic shift in JSWIL’S business model
We foresee JSWIL replicating the success of its ports business model in logistics as well by developing înfrastructure for catering to strong group cargo visibility and cross-selling these services to third-party (3P) clients.
Investec on Metals
DGTR has initiated a safeguard investigation on appeal from the India Steel Association
Appeal includes provisional measures, tariffs for 4 years (25% as per print media)
If its imposed as proposed on countries contributing >3% of import volumes over the investigation period, it reduces scope of circumvention.
If implemented, we see TATASTEEL, JINDALSTEL to be larger beneficiaries.
Investec on Bajaj Auto New Launch
New Chetak 3502 is priced at ~Rs120k
Sharp fall in cost of production for new E-2W
Cost of production of newly launched 2025 Bajaj Chetak series is ~45% lower to earlier models
This coupled with PLI benefit should aid in significantly improving profitability for the company going ahead
Gaining market share in EV space
BoFA on Auto
December retail: ending the year on a slow note
PV demand holding up in Dec (+2%) backed by high discounts.
Metro/ big city demand is softening after 3 strong years
Two-wheeler demand momentum cools off in Dec with lower than expected wedding boost.
Some signs of financing stress cropping up
On EVs: Bajaj leads in electric scooter space in Dec; while M&M’s new BEV launches create right buzz. Deliveries expected from Jan-Feb
Truck retails see respite in Dec (+14% y/y) on low base but Shriram flags concerns on transporter fundamentals
Tractors demand strong.
All in All, sector seems to be ending the year on a slow note
Preferred picks: M&M and Bajaj Auto
Brokerages on MPC Minutes
MS
Easing likely in Feb policy-shallow easing cycle of 50bps
Underlying tone has favored prudence and caution
Improvement in headline CPI and sequential moderation in food prices will comfort to RBI
RBI expected to be nimble while managing liquidity
Risks of delayed start to easing cycle could emerge from a deterioration in inflation outlook
GS
Continue to expect shallow easing cycle
With 2 repo rate vuts of 25ps each in Feb and April 2025
Risks are there were cuts could be >50bps if inflation eases significantly in H1CY25
RBI MPC members optimistic on growth-inflation balance turning favourable next year
Avendus Spark on CG Power
Maintain Sell Rating; target price at Rs 514
Channel checks suggest that the overall motor market remains tepid
In the railways segment, proposed pan-India locomotive production is likely to flatten out from FY26 after multiple years of growth
Potential growth from Vande Bharat, KAVACH, and export orders could provide Positive surprises
Progress in OSAT execution needs to be monitored
Expect revenue and PAT to grow by 19% & 17%, respectively, over FY25E-FY27E
Emkay on HDFC Bank
Retain Buy; target price at Rs 2100
Deserves a safety premium given healthy RoAs and provision/capital buffer
Management reiterated its unwavering focus on customer satisfaction, arresting employee attrition, upgrading tech, and reducing regulatory friction
Plans to cut its LDR to pre-merger level (~85%) from the current 100% by cannibalizing credit growth and accelerating deposit growth
Bank should grow at sub-system levels in FY25, mimic system in FY26, and outperform in FY27
Bank proactively reduced unsecured loan growth earlier on, but would be open to quality loans as others take a back seat
Falling LDR/higher CoF could put some pressure in the near term, but margins are expected to inch-up in the long run, led by better portfolio mix/lower share of borrowings (8-9% of liabilities)
MS on Reliance Ind
Morgan Stanley add RIL to APxJ & GEM focus list while removing GAIL
Add RIL & believe key challenges have been priced in across key verticals
RIL’s FCF engine should pick up pace as 0.6mbpd of refining capacity shuts in 2025 globally
Demand growth should outpace capacity adds
UBS on Siemens
Maintain Neutral, Target Rs8,000
Government Capex Should Pick Up In H2 After Muted A H1, Q3 This Far Has Been Weak
On Private Capex, Metal/Auto Has Been Flattish
Data Centres, Pharma, Food & Beverages, Machine Builders, Semiconductors Have Been Growing Well
Channel De-stocking Is Not Over Which Has Impacted Short-Cycle Digital Industries Segment Orders
Adverse Short-cycle & Back-ended Rail Order Commentary Reflects Negative Read For ABB
Nuvama on Siemens
Downgrade Rating to Hold vs Buy, Cut TP to INR7,000 (earlier INR8,350)
Weak commentary on HVDC, railways
Chunky HVDC orders, which may see delays as India prefers LCC tech against SIEM’s plans to be only in VSC tech globally
Railways orders also slow, and the possibility of a higher share going to IR factories
Margins lagging with 13.2% in FY24 vs 15–20% EBITDA margins of peers
Axis Cap on Siemens
Maintain Add, Cuts TP from Rs 7850 to Rs 7278
Slash sales/EBITDA/EPS estimates by average of 9/12/11% over FY25-27E
Continue to prefer ABB over Siemens considering the nature of orderbook, margin profile, and robust order pipeline
Likely to drive an earnings CAGR of 18% over CY24-26E.
Elara on Siemens
Accumulate, TP cut to Rs 7670
Govt. capex is set to jump in Q2FY25 while outlook for private capex seems feeble in the near-term given delays in orders
Demerger & listing of the energy business is set to be completed in CY25.
Antique on Siemens
Buy, TP Rs 8856
Co expressed optimism about capex momentum regaining in CY25 after witnessing a moderation in recent past
Co expects activities across govt & private sector to pick-up
Opportunity canvas continues to remain robust
Phillipcap on Siemens
Neutral, TP Rs 7400
Differentiated HVDC focus means lowers potential TAM
Mobility should improve going into FY25
SIEM own capex indicates long-term demand runway
Siemens Energy demerger– likely to be completed in CY25
Antique on JSPL
Buy, TP Rs 1183
Cos capacity expansion plans could receive a major boost with commissioning of a slew of projects over next couple of quarters, including BF-II, BOF-II, ACPP-II, & slurry pipeline
Aim is to enhance crude steel-making capacity to 15.9 mtpa (1.7 x)
Domestic long prices have been at a premium to flat HRC price in 3QFY25, which favors co
Net debt/EBITDA @1.2x level best among Indian peers
HDFC Sec on Clean Science
Sell, TP Rs 1106
Co launching two performance chemicals & a pharma intermediatory over next year.
It has introduced four new Hindered Amine Light Stabilisers (HALS) in 1HFY25
Believe val contextually high at 45/37/33x FY25E/26E/27E EPS
Nuvama on Aviation
Maintain Hold Call On Both IndiGo & SpiceJet Given Near-Term Weakness In Industry
There Is Also Promoter-Selling Overhang For Indigo
SpiceJet/IndiGo Scheduled Flights Up 25%/27% MoM In Dec’24
SpiceJet/IndiGo Gained 45 bps/32 bps At The Cost Of Air India Group’s Share Falling By 65 bps
IndiGo’s 103/109 Rank, According To Airhelp Survey, Indicates Huge Room For Improvement
Elara on Interglobe Aviation
Upgrade to Buy, TP raised to Rs 5309
Demand set to jet as airports & fleet spike
Expansion at major airports to drive growth; no possibility of over-supply beyond FY28
Large orders to drive fleet addition; return of P&W fleet from Q4, near-term edge
Equius on Lloyd Metals
Long, TP Rs 1600
TEIL, representing the mine development and operations (MDO) business of Thriveni Earthmovers (TEMPL), boasts of a robust mining portfolio with ownership of 1,650 equipment and an annual excavation capacity exceeding 200mnbcm
Investec on Greenply
Buy, TP Rs 420
Management meet takeaways
Expects minimal impact on sales from Gujarat MDF plant shut down
Remains hopeful on furniture fittings JV ramp-up, with FY25 target at Rs1b & expects facility eventually to deliver up to Rs8-9b annually
