Morgan Stanley Maintains Overweight Rating on Reliance Industries
Morgan Stanley has reaffirmed its overweight rating on Reliance Industries, setting a target price of Rs 1,803. Analysts highlighted that tight global markets are sustaining higher refining margins, which benefits the company. Reliance's capability to process heavy and sour crude oil provides a significant advantage, supporting the stock's performance.
Additionally, the company's diversified crude sourcing strategy among global refiners further bolsters its position. Analysts noted that the chemical cycle is currently in a recovery phase, with access to US ethane and internal naphtha contributing positively. They project a 6-8% uplift in earnings for FY27, underscoring the firm's robust outlook.
Kotak Institutional Equities Upgrades Interglobe Aviation
Kotak Institutional Equities has issued an upgrade rating on Interglobe Aviation, with a target price of Rs 5,500. Analysts pointed out that airlines face significant exposure to crude prices and jet fuel spreads, which complicates forecasting cost structures and assessing near-term demand elasticity.
However, they emphasized that investors should focus on the fast-growing losses of Indigo's competitors. The aggregate investments in this sector are substantial, necessitating better-than-peak post-Covid pre-tax operational profitability to achieve high-single-digit post-tax returns. Airlines are viewed as a play on consumer spending, where consumers eventually absorb inflation over time, and airlines gain from periods of deflation.
UBS Neutral on AU Small Finance Bank
UBS has assigned a neutral rating to AU Small Finance Bank, with a target price of Rs 1,100. Analysts mentioned that the Reserve Bank of India has relaxed promoter holding norms, facilitating the bank's transition to a universal bank. AU Small Finance Bank is required to submit its universal banking license application shortly, which is seen as a slight positive for the lender.
HSBC Maintains Buy Rating on Ambuja Cements
HSBC continues to hold a buy rating on Ambuja Cements, with a target price of Rs 670. Analysts cited Sanghi Industries' cost reduction efforts as a positive factor for the company. Ambuja Cements' focus on utilization and return on investment, rather than capacity addition, is viewed as an encouraging strategy.
A visit to Sanghi highlighted the company's extensive, high-quality limestone reserves and growth potential at its assets. Management's emphasis on optimizing the existing asset base and improving ROI before further expansions was well-received. Analysts also appreciated the margin expansion narrative at an attractive valuation.
Motilal Oswal Securities Maintains Buy on Nippon India AMC
Motilal Oswal Securities has maintained its buy rating on Nippon India AMC, revising the target price to Rs 1,040 from Rs 1,060. Analysts noted that the fund house is the fastest-growing asset management company, with steady SIP flows and dominance in ETFs. The performance of its funds has remained stable in recent months.
Its alternatives platform is developing a scalable, margin-accretive adjacency. While regulatory changes may impact yields, the company anticipates gradual compression and has mitigation strategies in place. Ongoing business diversification and prudent cost management are expected to offset yield compression effects and support valuation resilience.
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