Leading global brokerage firms have released their latest analysis and recommendations on several key Indian stocks, providing insights into sectors ranging from insurance aggregation and hospitality to metals and fast-moving consumer goods (FMCG). The reports highlight target prices, growth drivers, and potential concerns for companies like PB Fintech, Chalet Hotels, Hindalco, HDFC Asset Management, and ITC.
Insurance and Hospitality in the Spotlight
BofA Securities has maintained a neutral rating on PB Fintech, the parent company of Policybazaar, with a target price of Rs 1,980. Analysts noted that the company's management does not foresee any negative impact from Goods and Services Tax (GST) on health and term insurance policies. While there might be some effect on the savings business, the management is actively working to address these challenges within the next three to six months.
Furthermore, the brokerage pointed out that most insurer contracts are based on the combined operating ratio. With its lower operating expenses and a better claims ratio, PB Fintech is in a stronger position to negotiate with insurance partners. The company's primary focus remains on driving healthy, sustainable growth in the competitive insurance aggregation market.
In the hospitality sector, Jefferies has issued a buy recommendation on Chalet Hotels, setting a target price of Rs 1,070. Analysts stated that the company reaffirmed its dominance in metro markets during a recent analyst meet, citing its strong institutional partnerships, expertise in mixed-use developments, and industry-leading execution capabilities.
Chalet Hotels is concentrating on expanding its portfolio of 'Big Box' city assets and leisure properties, supported by a selective approach to commercial real estate. Since its listing, the company has added over 1,050 keys (hotel rooms) and has another 1,180 keys in the pipeline. It plans to balance brand tie-ups with the selective rollout of its new upper-upscale brand, ATHIVA, which will be tailored to each property's specific potential.
Metals, Asset Management, and FMCG Updates
CLSA has an outperform rating on Hindalco Industries and has raised its target price to Rs 965. Analysts estimate that even if the London Metal Exchange (LME) aluminium price falls to $2,600 per tonne (compared to the current spot price of around $2,850), the company's ongoing capacity and margin expansion initiatives could potentially double its EBITDA over the next five years. This is expected to be accompanied by significant free cash flow generation in the latter half of the period.
In the near term, concerns related to its subsidiary Novelis, including capital expenditure escalation and a plant fire, are likely to be offset by a strong outlook for aluminium prices. The management has expressed a constructive view on aluminium prices. However, Hindalco's capacity addition plans in Indonesia might face challenges related to power availability, especially as China approaches its production ceiling. Demand for aluminium remains resilient, according to the analysts.
In the financial services space, Citigroup has upgraded HDFC Asset Management Company (AMC) to neutral from sell, increasing the target price to Rs 2,850. The upgrade is based on several factors, including the fund house's sustained strength in performance across most key actively-managed, high-yielding categories. The company is also sharply focused on scaling up its non-mutual fund businesses. Additionally, there is limited visibility of any near-term regulatory overhang.
On the flip side, the brokerage highlighted that elevated competitive pressure and the reducing distribution advantages for incumbent players remain key areas of concern for HDFC AMC.
ITC Gets a Thumbs Up from Macquarie
Macquarie has reiterated an outperform rating on ITC with a target price of Rs 500. Analysts believe that market concerns regarding high per-stick taxes mentioned in a draft excise document are misplaced, as such rates typically represent a cap and not the applicable rates.
They see potential for a moderation in discounting after the shift to GST as a percentage of retail price, coupled with easing leaf tobacco costs. These factors are expected to drive over 10% EBIT growth in the cigarette business by FY27. Consequently, Macquarie has raised ITC's earnings per share (EPS) estimates and target price by 2% and 4%, respectively, to factor in these positive tailwinds. The analysts also believe that a re-rating of the stock requires clarity that cigarette taxes will not increase materially following the levy of any new cess.
