Brokerage Views: Morgan Stanley On GSPL, Citi On Bajaj Finance And More

Citi has maintained its 'buy' rating on Bajaj Finance Ltd. as it projects healthy earnings growth and value unlocking after the listing of its housing finance arm. S&P Global has released its view on the Indian cement industry and its future prospects.

Meanwhile, Investec initiated coverage on aerospace component maker Azad Engineering Ltd.

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

Morgan Stanley On Gujarat State Petronet

• The broking upgraded Gujarat State Petronet stock to equal-weight with a target price of Rs 452 per share, implying an upside of 2% over the previous close.

• Gujarat State Petroleum Corp. Group restructuring removes GSPL's holding company discount. The company holds a 54.17% stake in Gujarat Gas Ltd.

• The restructuring allows GSPL to unlock a historical holding company discount of 45% in Gujarat Gas.

• Lowered earnings-per-share estimates by 48% and 59% for FY25 and FY26, respectively, to factor in the Petroleum and Natural Gas Regulatory Board tariff cut.

• The bull case price target for GSPL is Rs 692 per share.

Gujarat Gas – Merger To Simplify Structure With Deeper Value: Systematix

Citi On Bajaj Finance

• The brokerage maintained a 'buy' call on the stock with a target price of Rs 8,257 per share, implying a potential upside of 13% over the last closing price.

• Bajaj Finance to hold 88.7% of Bajaj Housing Finance Ltd., which contributes 8% to its market cap.

• Earnings growth of 22-25% is expected, being 12-13% of consolidated earnings and 16-18% of consolidated net worth.

• Valued at 3.3 times the fiscal 2025 price-to-book value estimate and 2.9 times the fiscal 2026 PBV estimate pre-issue.

• On the basis of a 30% discount, the company trades at 5.4 times and 4.3 times its fiscal 2025 and fiscal 2026 estimate standalone net worth, respectively.

Bajaj Housing Finance Sets IPO Price Band At Rs 66–70 Apiece

Investec On Azad Engineering

• The brokerage initiated coverage on the Azad Engineering stock with a 'buy' call and a target price of Rs 1,850 per share, which is a potential upside of 22% over the previous close.

• The company emerged as one of the preferred suppliers of highly engineered, complex, mission- and lifecritical components for global OEMs across aerospace and defence, energy and oil and gas industries.

• It is the Indian company to offer 3D airfoils to global original equipment manufacturers.

• It is continuously expanding its addressable market by qualifying for new products.

• It currently has less than 1% market share of its addressable market.

• Recent order wins, diversification and reductions in finance costs are key.

• The business model offered with growth prospects with macro themes is attractive.

• The brokerage projects net profit to grow at 40% on a compounded annual basis over the next three years.

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S&P Global On Indian Cement Industry

• India to see $1.7 trillion investments in infrastructure till 2030.

• The government's $24 billion spent on production-linked incentives over the next five years to boost local manufacturing.

• Cement players to double capacity by 2028.

• Around 20 million homes are to be built in the next four years under the rural housing scheme.

• Cement companies have reduced one-fourth of debt since before 2020.

• Optimal demand mix, highest from rural housing and infrastructure.

S&P Global On Cement Sector's Expansion Spree

• Expects players to spend $14.3 billion on additional 25% capacity over the next four years.

• Capacity expansion to lead to extra 160–170 million tonnes of cement production annually.

• Expansion to be funded largely internally with minimal debt.

• Large firms can fund expansion with minimal credit impact.

• Lower production costs and logistics optimisation to help firms maintain profitability.

• Continued government infrastructure spending and housing projects to boost demand.

Cement Sector Check – Sustaining On The Edge, And Price Hike Dilemma: Yes Securities

Morgan Stanley On India Chemicals

• The firm upgraded PI Industries Ltd. to equal-weight with a revised price target of Rs 4,300 per share, representing a potential downside of 6% over the previous close. It cited strong volume growth and new product traction.

• It downgraded Aarti Industries Ltd. to 'underweight', with a price target of Rs 568 per share, implying a potential downside of 9%. It said pricing pressures may limit earnings.

• It has an 'overweight' rating on Deepak Nitrite Ltd. with a price target of Rs 3,295 apiece, implying an upside potential of 13%. The revised price target reflects upside risk with clarity on new investments.

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