Brokerage Views: Nuvama On IGL, MGL, Citi On LIC Housing Finance And More Neha Aravind NDTV Profit

Nuvama Institutional Equities and Citi Research have shared their views on key sectors, shedding light on gas stocks and housing finance trends this Wednesday. 

Nuvama maintains a cautious stance on gas companies, citing unsupportive fundamentals behind the recent rebound and challenges to margins amidst sectoral headwinds. 

Meanwhile, Citi reiterates its positive outlook on LIC Housing Finance Ltd. noting its resilience despite near-term hurdles and outlining growth prospects in the affordable housing segment.

NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Wednesday. 

Nuvama on Gas Stocks

• Retains a ‘reduce’ rating on Indraprastha Gas Ltd. and Mahanagar Gas Ltd., and a ‘hold’ rating on Gujarat Gas Ltd.

• Believes fundamentals do not support the recent rebound in gas stocks.

• Notes that the rebound is driven by potential Goods and Services Tax implementation, but benefits remain uncertain.

• Projects a 9–11% upside for Ebitda in fiscal year ending March 2026, though benefits will largely be passed on to consumers.

• Expects a margin reduction of Rs 1–3 per unit, with gas company margins likely to decline 17–44% quarter-on-quarter in the third quarter of the fiscal year ending March 2025.

• Expects gas stocks to be impacted in the fourth quarter of fiscal 2025 as long-term gas supply contracts are firmed up.

• Anticipates volume growth in the sector to suffer due to reduced competitiveness of compressed natural gas compared to petrol and diesel.

Citi on LIC Housing Finance

• Retains a ‘buy’ rating on the stock with a target price of Rs 851 apiece, implying a 40% upside from the previous close.

• Notes that temporary issues in Hyderabad and Bangalore have impacted disbursement growth.

• Expects the seasonally strong third quarter of the fiscal year ending March 2025 to be weaker than usual, but expects a recovery in the fourth quarter.

• Anticipates net interest margins to sustain at the lower end of guidance, around 2.7%.

• Notes that the sale of assets to an asset reconstruction company for Rs 250 crore is expected to release provisions.

• Highlights month-on-month improvement in slippages and collection efficiency, with provisioning requirements reducing.

• Plans to scale its affordable housing portfolio after piloting in a few locations.

Emkay on Passenger Vehicle Sector

• Maintains a cautious stance on the passenger vehicle sector, citing weakened demand over the past two months.

• Observes muted retail sales despite record-high year-end discounts.

• Notes alarmingly high inventory buildup at dealerships, despite modest wholesale growth.

• Expects margins of passenger vehicle manufacturers to remain under pressure in the third quarter of the fiscal year ending March 2025 due to record-high discounts.

• Anticipates the segment to remain under pressure until the second quarter of fiscal year ending March 2026, driven by weak consumer sentiment and cautious financiers.

• Highlights that Mahindra and Mahindra Ltd. is performing better than peers due to its relatively fresh product portfolio, while Tata Motors Ltd.’s passenger vehicles segment is struggling after a muted response for the Curvv sport utility vehicle.

Emkay’s Calls on Auto Stocks in the Passenger Vehicle Segment

• Retains a ‘reduce’ rating on Hyundai Motor India Ltd. with a target price of Rs 1,750 apiece, implying a 4% downside from the previous close.

• Retains a ‘reduce’ rating on Mahindra and Mahindra with a target price of Rs 2,700 apiece, implying an 11% downside from the previous close.

• Retains an ‘add’ rating on Maruti Suzuki Ltd. with a target price of Rs 12,000 apiece, implying an 8% upside from the previous close.

• Retains an ‘add’ rating on Tata Motors with a target price of Rs 1,000 apiece, implying a 28% upside from the previous close.

Nuvama on Paint Stocks

• Notes that Berger Paints India Ltd. and Indigo Paints Ltd. are expected to outperform in the second half of the fiscal year ending March 2025.

• Expects Asian Paints Ltd. to grow slower than Berger Paints and Indigo Paints Ltd., as it dominates metro cities where challenges persist.

• Projects a 1% year-on-year volume growth and a 3% year-on-year sales decline for Asian Paints in the third quarter of fiscal year ending March 2025.

• Forecasts Berger Paints to achieve 6% volume and 5% sales growth year-on-year during the same period.

• Notes that the entry of new players initially impacts market leaders more, with Birla Opus gaining a 2–3% market share in key cities.

• Prefers Pidilite Industries Ltd. over paint companies in the segment.

Antique Stock Broking on Real Estate

• Highlights that approval challenges have eased in Bengaluru, paving the way for upcoming launches.

• Notes that key players such as Prestige Estates Projects Ltd., Godrej Properties Ltd., Brigade Enterprises Ltd., Sobha Ltd., Aditya Birla Real Estate Ltd., and Macrotech Developers Ltd. have significant launch pipelines in Bengaluru.

• Maintains a ‘buy’ rating on Aditya Birla Real Estate with a target price of Rs 3,804 apiece, implying a 40.2% upside from the previous close.

• Retains a ‘buy’ rating on Oberoi Realty Ltd. with a target price of Rs 2,688 apiece, implying a 16.1% upside from the previous close.

Nuvama on Coromandel International

• Upgrades the stock to a ‘buy’ rating with a target price of Rs 2,347 apiece, implying a 30% upside from the previous close.

• Projects backward integration to boost Ebitda per ton by 40%.

• Highlights plans for organic and inorganic growth in the crop protection business.

• Notes an expansion strategy to double its retail footprint and enter northern markets.

• Revises Earnings Per Share estimates upwards by 2% for fiscal year ending March 2026 and 4% for fiscal year ending March 2027.

• Plans to invest Rs 160 crore in two multi-purpose plants, expected to be operational by fiscal year ending March 2027.

Citi on Insurance

• Highlights HDFC Life Insurance Company Ltd. and SBI Life Insurance Company Ltd. as top picks among life insurance companies.

• Notes that Go Digit General Insurance Ltd. is well-positioned in the non-life insurance segment.

• Recommends PB Fintech Ltd. as an alternate play on insurance.

• Retains cautiousness on other non-life insurance players and ICICI Prudential Life Insurance Company Ltd.

• Observes that product innovation and distribution diversification remain key focus areas.

Motilal Oswal on CIE Automotive India

• Retains a ‘buy’ rating on the stock with a revised target price of Rs 575 apiece, implying an 18% upside from the previous close.

• Expects the Indian business to drive growth, supported by a pickup in commercial vehicles and passenger vehicles in fiscal year ending March 2026, alongside positive rural sentiment.

• Notes weak demand in Europe, with limited recovery expected soon.

• Reduces earnings estimates for fiscal years ending March 2025 and 2026 by 4–5%.

• Highlights unique financial attributes, including a net debt-free position and strict capex and inorganic expansion guidelines.

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