Posted on by Yashi Gupta

Thursday’s top brokerage calls: Asian Paints, ICICI Prudential, Bajaj Finance, and more

HSBC on Asian Paints: The brokerage has a ‘buy’ rating on the stock with the target at Rs 3,500 per share. It noted that the company’s revenue growth of 91 percent, led by a volume growth of 106 percent was ahead of expectations.
Citi on Bajaj Finance: The brokerage has a ‘buy’ rating on the stock with the target at Rs 6,950 per share. It noted that even though the company is under stress, there has been decent early traction of wallet.
Citi on ICICI Prudential: The brokerage has a ‘buy’ rating on the stock with the target at Rs 750 per share. It noted that the company’s favourable product mix is driving VNB margin expansion.
CLSA on Asian Paints: The brokerage has an ‘outperform’ rating on the stock with the target at Rs 3,275 per share. It noted that the company’s focus on sustaining share gains in an inflationary setting eroded its gross margin. The company is optimistic on demand in FY22, with better monsoon, long Diwali, and pent-up demand, the brokerage said.
CLSA on ICICI Prudential: The brokerage has a ‘buy’ rating on the stock with the target at Rs 725 per share. It noted that the company’s first-quarter performance beat estimates notably with its VNB margin at 29.4 percent.
Goldman Sachs on Asian Paints: The brokerage has a ‘sell’ rating on the stock with the target at Rs 1,679 per share. It noted that the company’s margin contraction raises questions on its pricing power. While the second quarter is likely to benefit from the pent-up margin, the brokerage said it remains cautious.
Goldman Sachs on Bajaj Finance: The brokerage has a ‘sell’ rating on the stock with the target at Rs 4,479 per share. It noted that even though the company is focusing on business transformation, the competition is intense. In the near term, the company is facing another round of earnings downgrade, the brokerage said.
Goldman Sachs on ICICI Prudential: The brokerage has a ‘neutral’ rating on the stock with the target at Rs 570 per share.
Goldman Sachs on Jubilant Food: The brokerage has a ‘sell’ rating on the stock with the target at Rs 1,293 per share. It noted that while the company’s system sales have almost recovered, investors should sell the stock given the headwinds to the earnings growth.
HSBC on Havells: The brokerage has a ‘buy’ call on the stock with the target at Rs 1,215 per share. It noted that the company has delivered strong results in the first quarter with revenue and profit above the consensus expectation. The demand recovery in the sector continues to surprise positively, the brokerage firm said.
Morgan Stanley on ICICI Prudential: The brokerage has a ‘buy’ call on the stock with the target at Rs 700 per share. It noted that the company delivered a 20 percent VNB beat in a tough quarter. This pickup in VNB growth after recent sluggish growth should help rerate the stock, the brokerage said.
HSBC on Jubilant Food: The brokerage has a ‘buy’ call on the stock with the target at Rs 3,650 per share. It noted that the company’s first-quarter sales growth of 131 percent YoY, led by delivery was impressive in a disrupted quarter. With new formats and Domino’s’ growth, the company now appears a structural winner in the quick-service restaurant industry, the brokerage said.
Macquarie on Asian Paints: The brokerage has an ‘outperform’ rating on the stock with the target at Rs 3,500 per share. It noted that the company’s first-quarter performance emphasised on the resilient nature of the decorative demand. But the brokerage is less worried about the Asian Paints’ near-term margin pressure.
Morgan Stanley on Asian Paints: The brokerage has an ‘equal-weight’ rating on the stock with the target at Rs 3,143 per share. It noted that the company’s topline is ahead of estimates but the margin is disappointing. “The uncertain direction of the margin leads us to move to the sidelines,” the brokerage said.
Morgan Stanley on Bajaj Finance: The brokerage has an ‘overweight’ rating on the stock with the target at Rs 6,850 per share. It said that the company has three Ps – profits, platform, and payments that excite investors in the new-age stocks. The brokerage said the stock looks fairly valued versus its base case.
Morgan Stanley on Jubilant Food: The brokerage has an ‘overweight’ rating on the stock with the target at Rs 3,236 per share. It noted that the company’s first-quarter earnings beat its consensus estimates and that the management is optimistic on the near-term outlook.
Nomura on Asian Paints: The brokerage has a ‘neutral’ rating on the stock with the target at Rs 3,300 per share. It noted that the company’s products have a strong demand despite the second wave aided by share gains from unorganised and organised players. The brokerage said the company’s margins will remain compressed in the near term as pricing trails commodity inflation.
UBS on Asian Paints: The brokerage has a ‘buy’ call on the stock with the target at Rs 3,550 per share. It noted that even though the quarter was tough for the company, its outlook has improved.
UBS on ICICI Prudential: The brokerage has a ‘buy’ call on the stock with the target at Rs 690 per share. It noted that the company’s strong core business performance will overshadow its weak accounting profits.