Brokerage Views: Citi, CLSA On Infosys, Morgan Stanley On HDFC Life And More

Infosys Ltd., Bajaj Auto and HDFC Life Insurance Co. are in brokerages' focus as the index heavyweights announced earnings for the quarter and year ended March 2024. CLSA, Citi Research and Jefferies have maintained their rating on Infosys but reduced respective target prices. The brokerage noted that the March quarter's result and guidance were impacted by one-time contract rescoping.

Morgan Stanley maintains an 'overweight' rating on HDFC Life Insurance Co. but cut its target price. NDTV Profit is tracking what the brokerages are putting out on specific stocks. Here are all the top calls from the brokerages that you need to know about on Friday.

CLSA on Infosys

CLSA maintains outperform, cuts target price to Rs 1,553 from 1,706, implying an upside of 8.6%.
Constant currency revenue growth guidance of 1-3% for FY25 weaker than expectations of 4-6% due to pressure on discretionary spends.
Recovery expected in FY26 post US elections and interest rate cuts.
The brokerage Believes correction is overdone.
BFSI and telecom segments to recover on the back of specific deal wins, including Liberty Global.
First half of FY25 to remain strong on the back of ramp up of two large deal wins

Citi On Infosys

Citi Research retained 'neutral' rating on Infosys, but reduced target price to Rs 1,550 from Rs 1,660.
March quarter earnings and guidance were impacted by one-time contract rescoping.
Excluding this hit, results would have been broadly in line, Citi said.
The brokerage lowered EPS estimates by 3% each for fiscals 2025 and 2026.
All things remaining same, Citi recommends buy on dips at around Rs 1,350 levels.
The brokerage is cautious on the IT sector, Infosys one of the two neutrals in the space.

Also Read: Infosys Q4 Results: Revenue Misses Estimates, Forecasts 1-3% Growth For FY25

Jefferies On Infosys

The brokerage maintains 'buy'.
Target price rolled-over to Rs 1,630 from Rs 1,740, implying an upside of 14%.
Revenue missed estimates mainly due to contract re negotiation and reduction in scope in a BFSI deal.
Strong deal wins will provide comfort over from fiscal 2024 to 2027.
Jefferies believes FY25 guidance is achievable.
The brokerage expect the margins to rise to 21.1% by FY27.
The company may offer higher dividends vs buybacks, which should support multiples.

Nirmal Bang On Infosys

Nirmal Bang has an 'accumulate' rating on Infosys with a target price of Rs 1,512 apiece, implying a potential upside of 5.7% from the previous close.
Infosys' FY25 revenue growth guidance of 1–3% (organic) came in lower than Nirmal Bang's expectation of 4–7%.
Infosys reported QoQ CC decline of 2.2% in Q4 FY24 revenue, which completely missed Nirmal Bang's estimate of 1.2% QoQ CC growth, EBIT margin was also below its estimate.
While large-deal TCV of $17.7 billion in FY24 is the highest in its history, with net new up 135% compared to FY23, the revenue guidance has been weak.
This could be because of longer tenure of net new order, leakage in the previously won TCV; delayed start of the projects; if the projects start, they are not ramped up in time; old projects undergoing rescoping.
It has been cautious on the IT sector since April 2022 and continues to be so even now and says "we are in a slower-for-longer environment".
"For FY25, we are building in revenue growth at the upper end of its guidance as we believe it is conservative in light of the strong net new TCV."
"We have increased the discount from 10% to 15% to the target PE multiple accorded to TCS."

Motilal Oswal On Infosys

Motilal Oswal maintains 'buy' on Infosys with a target price Rs 1,650 per share.
Strong deal wins improve visibility for FY26 growth.
Management sees a good pipeline of large deals despite the unchanged demand environment.
Expects FY25 dollar constant currency revenue growth of 2.5% year-on-year.
Expects double-digit dollar CC revenue growth in FY26 as macro visibility improves.
Expects FY25 EBIT margin of 21.1%, up 40 basis points year-on-year.
Lowers FY25/FY26 earnings-per-share estimates by 5–6% on weak Q4, muted FY25 revenue growth guidance.
Views Infosys as a beneficiary of IT spending acceleration over the medium term.

Also Read: Nestle's Sugar In Baby Food Controversy To Impact Revenue In Near-Term, Say Analysts

Nomura On HDFC Life

Nomura maintains 'buy' rating on HDFC Life with a target price Rs 680 apiece.
FY24 margin contraction due to operating leverage gap, rising share of the low-margin ULIPs.
Builds VNB margins of 27%, lower than FY23 levels.
Maintains rating on balanced product/distribution profile.

HSBC On HDFC Life

The brokerage maintains 'buy' with the target price cut from Rs 800 earlier to Rs 750 per share, implying a potential upside of 23% from the previous close.
VNB margin was impacted by changes in product mix and rising competitive pressure.
Management plans to focus on APE growth over margins in FY25.
Has cut FY25/26/27 VNB margins by 110/70/70 basis points respectively.
Expects a FY25-27 average VNB margin of 26.7%.

Also Read: Brokerage Views: Morgan Stanley On HDFC Life, Motilal Oswal On Bajaj Auto And More

Morgan Stanley On HDFC Life

Morgan Stanley maintains an 'overweight' rating on HDFC Life Insurance Co. and cuts the target price to Rs 745 apiece.
Cuts FY25/26 of new business estimates by 7%/8%.
Expects muted stock performance in the near term.
Sees upside for HDFC Life from one-year perspective.

Also Read: Trade Setup For April 19: Nifty Momentum Weak In Short Term With Heightened Volatility

Motilal Oswal On Bajaj Auto

Motilal Oswal maintains 'neutral' rating on Bajaj Auto Ltd. at a target price of Rs 8,360 apiece.
Domestic two-wheeler industry volumes to grow 7–8% year-on-year in FY25.
Likely to outperform domestic motorcycles segment, led by healthy launch pipeline.
Export outlook remains uncertain due to geopolitical headwinds in key markets.
Demand for three-wheeler internal combustion engine likely to normalise over very high base in last two years.

Also Read: JPMorgan Says Buy The Dip If India Poll Volatility Hits Stocks

Nuvama On Bajaj Auto

The brokerage has a 'buy' rating on the stock with a target price of Rs 10,340, implying a 15% upside.
The two-wheeler volume prospects remain positive, with an estimated 9% CAGR over FY24-26, led by domestic growth (8%) and recovery in exports (11%).
The first CNG motorcycle launch is planned in June 2024, and the success of this product can provide an upside to volume estimates.
Revenue/Ebitda CAGR estimated at 13%-17% over FY24-26 with an RoE of 36%.

Citi On Bajaj Auto

The company has a target price of Rs 6,500, implying a downside of 28%, and 'sell' rating.
Results beat estimates, driven by better-than-expected realisations.
⁠Positive management commentary on domestic demand.
⁠3W demand should moderate in FY25 vs FY24.
⁠Focus on gaining market share in 125cc+, aided by new launches.
Earnings estimate raised due to better demand, higher ASP, margins.
Exports revival uncertain, current valuations adequately price in margin expansion.

Motilal Oswal On Angel One

Motilal Oswal maintains 'buy' on Angel One Ltd. at a target price of Rs 4,200 apiece.
Strong Q4 results, led by surge in orders.
Raise FY25/FY26 EPS estimates by 6%/8%, factoring business scale-up after fundraise.
Cuts Ebitda margin estimates on IPL-related expenses.
Five-year IPL sponsorship to help penetrations in tier III, IV cities.
New segments like loan distribution and fixed-income product distribution to scale up in the near term.
AMC and wealth management to start revenue contribution over the long term.