Brokerage Views: Motilal Oswal On Oil India, HSBC On Varun Beverages, Macquarie Earnings Preview And More

Companies like Oil India Ltd., and Varun Beverages Ltd. will be in focus on Thursday as top analysts have evaluated their outlook ahead of their second quarter earnings.

Macquarie continues to see earnings expectations fatigue and downside to the consensus forecast when it comes to India Inc.

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 Thursday.

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Motilal Oswal On Oil India

• The brokerage reiterated 'buy' with a target price of Rs 720 per share, implying an upside of 25% from the previous close.

• Current market price implies a standalone business trading at seven times fiscal 2027 price to earnings.

• Production growth outlook robust, posting 9% CAGR in fiscal 2024-27.

• Expansion of refinery capacity; new city gas distribution companies driving demand.

• Downside risk capped even where crude at $60 a barrel.

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Macquarie On Q2 Earnings Preview

• Continue to see earnings expectations fatigue and downside to the consensus forecast.

• Sees more misses than beats in the second quarter, particularly in consumer discretionary, materials and financials.

• Continues to forecast a 15% two-year earnings per share CAGR for MSCI India.

• The revenue side, sees limited potential for positive surprises following sharp upward revisions.

• Margins' side, sees upside potential in IT.

• The margins side is concerned about the operating leverage gains assumed for autos and industrials.

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CLSA India Strategy

• Nifty's 7.5% rise during the July-September quarter was less than most emerging markets.

• Nifty's absolute and relative valuations to bonds and peer markets remain stretched.

• Recent correction has cooled off the proprietary India Bull-Bear index from extreme bullish to a neutral.

• Continues to like financials and energy.

• With capacity and margin expansion, Jindal Steel & Power Ltd. is likely to have sector-leading and Ebitda growth over the next three years.

HSBC On Varun Beverages

• The brokerage retained its 'buy' with target price of Rs 780 per share, a 32% upside from the previous close.

• QIP issuance implies an equity dilution of 4% and could still be earnings per share accretive.

• VBL reported gross debt of Rs 6,300 per share as of first half of 2024, up from Rs 5,200 as of 2023.

• Financial leverage (net debt/Ebitda) of 1.37 times as of first half is not too concerning.

• Forecasting the firm's debt leverage below one times by 2024.

• Reduction in debt and investment in growth opportunities could further enhance return on invested capital.

• Thinks that VBL has a window to step up investments and lead the industry discourse.

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Jefferies On India Midcaps Q2 Preview

• Estimates a modest second quarter for small and medium coverage, with over 13% year-on-year profit growth.

• While business-to-consumer and rural offtake is likely weak, business-to-business traction seems steady.

• Estimates healthy volumes in Polycab, Finolex cables, Supreme Industries and Astral.

• Estimates strong year-on-year traction in Kaynes Technology Ltd.and Dixon Technologies Ltd. led by strong order book and customer adds.

• Estimates over 6% year-on-year sales in Crompton Greaves Consumer Electricals Ltd. and Pidilite Industries Ltd.

• Festive demand will be key to watch out for.

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