Stock Market Highlights 5 July 2024: Sensex drops, Nifty 50 hits record amid gains in energy stocks


Antiques at Ramco Cements

Downgraded to Hold, TP reduced from Rs.1000 to Rs.840

With companies' fourth quarter realisations hitting a 4-year low of below Rs 4,900 per tonne, there may not be a significant improvement in the near future.

a) Utilisation of the South Zone (currently 65%) is not likely to fall below 55% nor is it likely to cross 85%

b) Expansion of recently acquired underutilized assets by larger competitors in the near future

Hence, the company's profitability may not improve significantly in the near future, which is crucial for deleveraging and re-rating.

FY25-27 EBITDA cut by 5%-8%, target multiple reduced to 12x (was 13x earlier)

Jefferies on HDFC BK (Q1 update)

Buy, TP Rs 1880

Deposits remained stable quarter on quarter and the amount raised in Q1 FY24 was less than Rs 297 billion, which was a bit disappointing.

Average deposits were +5% quarter-on-quarter

Wait for trends in retail and wholesale deposits, which were provided till 4Q

MS on HDFC BK (Q1 Update)

OW, TP Rs 1900

Volume growth is expected to remain slow due to seasonal effects.

Deposit growth remained stable quarter-on-quarter at the period end, but grew 4.6% quarter-on-quarter on average.

Reported loan growth was lower at 0.8% quarter-on-quarter, mainly led by the wholesale segment (estimated to decline by 5% quarter-on-quarter).

Nomura on HDFC BK (Q1 update)

Neutral, TP Rs 1660

Reported 11% annual/flat quarterly growth in its gross AUM on a proforma basis.

Net after loan sales [i.e., interbank participatory certificates (IBPC)]Gross loans declined 0.8% quarter-on-quarter, while year-on-year growth stood at a soft 10.8%.

Bernstein on HDFC BK (Q1 update)

OP, TP Rs 2100

Another weak first quarter for deposits

Sharp decline in corporate/wholesale loans

Lower CASA may offset gains from better loan mix

CLSA on HDFC BK (Q1 Update)

OP, TP Rs 1725

Deposit growth in Q1FY25 weaker than expected

GS on NTPC

Buy, TP Rs 395

The government is seeking to ramp up coal generation capacity; this indicates urgency, but supply chain could be a challenge

NTPC's coal pipeline strong; imminent entry into nuclear power will offer long-term growth potential

Trading at attractive prices

CITI on PNB (Q1 Update)

Sell, TP Rs 95

Gross advances growth stood at 12.7% y-o-y/5.1% q-o-q, higher than Q4’s 11.5% y-o-y growth and Citi’s 3.4% q-o-q growth.

Domestic advances recorded a growth of 12.1% YoY/5% QoQ

Growth in the retail and SME sector is expected to be the primary growth drivers

MS on RBL BK (Q1 Update)

UW, TP Rs 250

Gross loan growth 3% quarter-on-quarter (18% year-on-year vs. 19% in 4QF24).

Retail loan growth remained strong (10% q-o-q vs. 6%), while non-retail loans declined (7% vs. +3%).

CASA deposits declined 9%, growing +16% q-o-q in 4QF24.

Liquidity strong (137% vs 140%)

MS on Gujarat Gas

Gujarat Gas has raised industrial natural gas prices following global LNG supply constraints and IGL hiked auto CNG prices

This will help improve margins as the economics are still in favour of gas.

Downgraded to Hold, TP reduced from Rs.1000 to Rs.840

With companies' fourth quarter realisations hitting a 4-year low of below Rs 4,900 per tonne, there may not be a significant improvement in the near future.

a) Utilisation of the South Zone (currently 65%) is not likely to fall below 55% nor is it likely to cross 85%

b) Expansion of recently acquired underutilized assets by larger competitors in the near future

Hence, the company's profitability may not improve significantly in the near future, which is crucial for deleveraging and re-rating.

FY25-27 EBITDA cut by 5%-8%, target multiple reduced to 12x (was 13x earlier)

Jefferies on HDFC BK (Q1 update)

Buy, TP Rs 1880

Deposits remained stable quarter on quarter and the amount raised in Q1 FY24 was less than Rs 297 billion, which was a bit disappointing.

Average deposits were +5% quarter-on-quarter

Wait for trends in retail and wholesale deposits, which were provided till 4Q

MS on HDFC BK (Q1 Update)

OW, TP Rs 1900

Volume growth is expected to remain slow due to seasonal effects.

Deposit growth remained stable quarter-on-quarter at the period end, but grew 4.6% quarter-on-quarter on average.

Reported loan growth was down 0.8% quarter-on-quarter, mainly led by the wholesale segment (estimated to decline 5% quarter-on-quarter).

Nomura on HDFC BK (Q1 update)

Neutral, TP Rs 1660

Reported 11% annual/flat quarterly growth in its gross AUM on a proforma basis.

Net after loan sales [i.e., interbank participatory certificates (IBPC)]Gross loans declined 0.8% quarter-on-quarter, while year-on-year growth stood at 10.8%.

Bernstein on HDFC BK (Q1 update)

OP, TP Rs 2100

Another weak first quarter for deposits

Sharp decline in corporate/wholesale loans

Lower CASA may offset gains from better loan mix

CLSA on HDFC BK (Q1 Update)

OP, TP Rs 1725

Deposit growth in Q1FY25 weaker than expected

GS on NTPC

Buy, TP Rs 395

The government is seeking to ramp up coal generation capacity; this indicates urgency, but supply chain could be a challenge

NTPC's coal pipeline strong; imminent entry into nuclear power will offer long-term growth potential

Trading at attractive prices

CITI on PNB (Q1 Update)

Sell, TP Rs 95

Gross advances growth stood at 12.7% y-o-y/5.1% q-o-q, higher than Q4’s 11.5% y-o-y growth and Citi’s 3.4% q-o-q growth.

Domestic advances recorded a growth of 12.1% YoY/5% QoQ

Growth in the retail and SME sector is expected to be the primary growth drivers

MS on RBL BK (Q1 Update)

UW, TP Rs 250

Gross loan growth 3% quarter-on-quarter (18% year-on-year vs. 19% in 4QF24).

Retail loan growth remained strong (10% q-o-q vs. 6%), while non-retail loans declined (7% vs. +3%).

CASA deposits declined 9%, growing +16% q-o-q in 4QF24.

Liquidity strong (137% vs 140%)

MS on Gujarat Gas

Gujarat Gas has raised industrial natural gas prices following global LNG supply constraints and IGL hiked auto CNG prices

This will help improve margins as the economics still favour gas.

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