Stock Market Updates 13 December 2024: Bulls fight back! Sensex closes 843 points higher; Nifty settles at 24,768

UBS On Banks

Neutral Call On IndusInd Bk, Target Cut To Rs1,150/Sh From Rs1,350/Sh, Cut EPS By 5%/6% For FY25/26

Neutral Call On Axis Bank, Target Cut To Rs1,210/Sh From Rs1,250/Sh

Neutral Call On AU Small Fin Bank, Target Cut To Rs640/Sh From Rs750/Sh

HDFC Bank, ICICI Bank & Federal Bank Are Top Picks

Non-Performing Loans Risks Increased For CV And Business Loans

Static Pool Analysis Of Disbursements In Recent Quarters Suggests Deterioration In Portfolio Quality

Maintain View On Rising NPLs & Raise Credit Cost Estimate By 2-25 bps Across Lenders

Among NBFCs, Increase Credit Cost Estimate For FY25/26 By 1-20 bps & Cut FY25/26 EPS By 1- 7%

Increase Credit Cost Est & Cut In EPS For For Bajaj Fin, Cholamandalam Invst, Shriram Fin & M&M Fin

Jefferies On Indian Oil

Upgrade To Buy, Target at Rs185/Sh

Refining Is Set To Strengthen In CY25 On Accelerated Capacity Closures Amidst Healthy Demand

Amongst OMCs, Co Is Most Levered To Refining Margin Improvement

Co Is Most Levered To Refining Margin Improvement Due To Its Highest Refining/Marketing Ratio

Risk Reward Has Turned Favourable After 20% Correction Over Past 3 Months

Citi On Infosys

Neutral Call, Target At Rs1,965/Sh

Management meet takeaways

Demand outlook & IT budgets

a) Co witnessing an improvement in discretionary spend in pockets

b) New deals also driven by compliance & digital transformation initiatives

(c) Financial services slowed down first and is starting to recover first. While it is still early to definitively call it a trend, Infosys expects other sectors to follow suit over a period of time.

(d) On IT budgets, Infosys gets some sense from clients in Jan/Feb in terms of what they are looking at.

GS On Pharma

Continue To Prefer Syngene (Buy) & Neuland (Buy) Over Divi’s (Neutral), Gland (Sell) & Laurus (Sell)

Analyse Export Data Of Key CRDMO Cos For Nov’24 Suggests Mixed Trends

Export Data Exhibits Relatively High Correlation To Actual Reported Numbers

Export Data Highlights That Monthly Fluctuations For Relatively Smaller Cos Can Remain High

Fluctuations For Smaller Cos Can Remain High Due To Bunching Of Shipments In A Particular Month

Neuland Labs +276% YoY, Piramal Pharma +31% YoY

Divis +5% YoY, Gland Pharma +3%, Laurus Labs -29% YoY

Lower export impacted due to lower pricing/margin dilutive products

DAM Cap on EPAC Durables

Initiate Buy, TP Rs 495

India’s RAC market poised to grow at 14% CAGR over FY25-30E

Believe Epack well positioned to capture growth with its strong R&D capabilities, deep client relationships, increasing wallet share & new strategic clients like Hisense

UBS on HAL

Buy Rating, Target Rs5,700

Received order for Su-30MKI aircraft with order value of Rs 135bn and 62.6% indigenisation

YTD HAL received manufacturing orders of Rs400bn (including Rs260bn of AL-31 FP engines), representing 40% of our FY25 order intake of Rs1tn.

Expect defence orders to bunch up in Q4 HNAL remains our top pick.

Morgan Stanley on Markets

Ongoing bull market has overtaken 2003-08 bull run in terms of length

But cumulative return is a third of what 2003-08 bull market generated

Current run-better gains relative to emerging markets than all previous bull markets

Least volatile bull market

Previous bull markers have ended at higher multiples, so there maybe room for this one to go further

Continue to back cyclicals over defensives

Prefer Financial, Con. Discretionary, Industrial and Tech over rest

Jefferies 2025 Outlook

Nifty Target at 26000

Prefer large caps over smid-caps

Expect market returns at 10% over CY25 in line with earnings growth Valuations for Nifty

At 20,5x one-year forward PE, are 6% above the past five-year average

Rate cuts by the RBI (50bps)

Overweight Banks remains our highest- conviction idea as growth gradually picks up

Top picks are ICICI, Axis, SBI, Bharti Airtel, JSW Energy, TVS, Coal, Godrej Properties, Sun Pharma

Investec on Medplus

Maintain Buy; target price at Rs 940

Co plans to add 600 stores in FY26

Generics-good adoptions coming by chronic medicine customers

Store franchise business models coming back

Co’s diagnostic pilot project in Hyderabad turned profitable

Doesn’t have expansion plans for diagnostic business

Jefferies on Reliance Retail

Has built massive scale and formidable play in retail space

May need to cue from some focused retailers and go after sizeable opportunities

Omni-channel presence-case for a foray in Q-Commerce

Company has 26% stake in Dunzo

Media reports indicate Co looking at 30-min delivery services unlike 10-15 minutes from peers

Jefferies on Cement

Dealers confirmed price hikes of Rs 8/12 per bag for Dec/Jan (3% MoM)

Demand growth has moderately improved

Recovery should continue into Q4 on revival in govt capex

Top players industry cutting incentives in the

New commissioning might keep prices on sideways basis

Like Ultratech Cement and JK Cement

HSBC on CPI Data

Inflation softer, but more disinflation needed

All eyes on temperatures during winter months

RBI will cut rates at Feb and April meetings, taking repo to 6%

For sharper food disinflation, winter season may have to stick longer in 2025

MS on CPI Data

Trend in high frequency indicators indicate sequential decline in vegetable prices

Strength in kharif output and resilient momentum in rabi sowing-should improve food inflation outlook

Expect RBI to follow shallow rate easing cycle from Q1FY25, with cumulative rate cut of 50bps

CITI on CPI Data

CPI Data November CPI is likely to encourage markets to increase the odds of a February rate cut, which is also our base case.

Remains a close call and we maintain that the RBI will need more supportive inflation and activity data over the next two months to cut rates in February.

GS on CPI Data

November 2024 CPI: 5.5% YoY vs. GSE: 5.6% YoY, Bloomberg consensus: 5.5% YoY, October 2024: 6.2% YoY

Raise our headline inflation forecast for Q4 CY24 by 10bp to 5.7% YoY as the contraction in vegetable prices in December has been lower than our earlier expectations, thus far.

As a result, we raise our CY24 and FY25 headline inflation forecasts by 10bp each to 5.0% YoY and 4.9% YoY respectively.