Indian Stocks on Analyst Radar: Key Upgrades, Downgrades & Target Price Shifts for Policybazar, Hindalco, ITC & More!

Major financial institutions have released updated analyses and price targets for a selection of prominent Indian listed companies, providing investors with fresh perspectives on their market outlooks.

PB Fintech

BofA Securities maintains a neutral stance on PB Fintech (Policybazar) with a target price of Rs 1,980. Analysts noted the company's management anticipates no negative GST impact on health and term policies, with strategies in place to manage any effects on the savings business within 3-6 months. The firm's structure, benefiting from lower operating expenses and better claims ratios, positions it well for negotiations with insurers, focusing on driving healthy growth.

Chalet Hotels

Jefferies recommends a buy on Chalet Hotels, setting a target price of Rs 1,070. The company reaffirmed its strong presence in metropolitan areas, driven by institutional partnerships, expertise in mixed-use developments, and industry-leading execution. Chalet Hotels focuses on 'Big Box' city assets and leisure properties, supplemented by selective commercial real estate ventures. Since its listing, the company has expanded its inventory significantly and has further keys planned. It aims to balance brand collaborations with a measured rollout of its new upper-upscale brand, ATHIVA.

Hindalco Industries

CLSA has upgraded Hindalco Industries to an outperform rating, increasing its target price to Rs 965. Analysts project that Hindalco's earnings before interest, taxes, depreciation, and amortisation (EBITDA) could double in five years, driven by ongoing capacity and margin expansion, even with a lower LME aluminium price. Significant free cash flow generation is expected in the latter half of this period. Near-term concerns at Novelis, including capex escalation and a plant fire, are expected to be offset by a positive aluminium price outlook. Management remains optimistic about aluminium prices, although capacity additions in Indonesia might face power availability challenges. Demand is noted as resilient.

HDFC AM

Citigroup upgraded HDFC Asset Management Company (HDFC AM) from a sell to a neutral rating, raising the target price to Rs 2,850. The upgrade is attributed to sustained performance strength across key actively-managed, high-yielding categories and a heightened focus on expanding non-mutual fund businesses. The firm sees limited near-term regulatory risks. However, competitive pressures and diminishing distribution moats for established players remain key concerns.

ITC

Macquarie has assigned an outperform rating to ITC with a target price of Rs 500. Concerns regarding high per-stick cigarette taxes, as suggested in draft excise documents, are considered misplaced, as these rates are viewed as caps rather than applicable taxes. Analysts anticipate moderation in discounting post-GST implementation and a reduction in leaf tobacco costs, which could drive over 10% EBIT growth in the cigarette business by FY27. Earnings per share estimates and target price were raised by 2% and 4% respectively to incorporate these positive factors. Clarity on cigarette tax rates post-cess implementation is crucial for further re-rating.

Impact

These analyst reports can significantly influence investor sentiment, potentially leading to stock price movements for the covered companies. Upgrades and increased price targets can boost confidence, while neutral or cautious ratings may temper enthusiasm.

Difficult Terms Explained

• GST: Goods and Services Tax, a unified indirect tax system in India.
• Combined Operating Ratio (COR): A measure of an insurer's profitability, combining claims paid and operating expenses with premiums earned. A lower COR indicates better profitability.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortisation, a measure of a company's operating performance.
• LME Price: London Metal Exchange price, a global benchmark for base metal prices.
• Non-MF Businesses: Refers to business activities of an asset management company that are not related to mutual funds, such as portfolio management services or offshore funds.
• Regulatory Overhang: Potential future regulatory actions or changes that could negatively impact a company's business or stock price.
• Distribution Moats: Competitive advantages in how a company distributes its products or services, making it difficult for rivals to replicate.