Leading global brokerages, including UBS, Citi, Goldman Sachs, Nomura, CLSA and DAM Capital, have released their latest views on several Indian stocks following recent quarterly earnings announcements, operational developments and corporate updates.
The brokerage reports highlight opportunities in Britannia Industries, CG Power, Data Patterns, Hindalco, Tata Steel, MRF and Kalyan Jewellers. Meanwhile, IIFL Finance is also expected to remain in focus after approving a major ₹6,414 crore capital raise led by global investment firm Blackstone.
Here is a detailed look at the latest brokerage recommendations and key investment highlights.
1. UBS on Britannia Industries: Buy, Target Price Cut to ₹5,800
UBS has maintained its Buy recommendation on Britannia Industries while reducing its target price to ₹5,800.
According to the brokerage, the company's stock performance will depend on the convergence of three important cycles: input costs, demand recovery and valuation.
The first factor is the input cost cycle, particularly whether inflationary pressures are behind the company and whether there is scope for margin expansion. The second is the demand recovery cycle, where the sustainability of volume growth will remain important. The third factor is valuation, including whether the stock is trading significantly below its earnings-cycle peaks.
Britannia delivered 11% volume growth in the first half of FY27, with the outlook for volume growth remaining encouraging. UBS believes this creates a favourable operating environment for the company.
The stock has corrected approximately 20% year-to-date amid inflation concerns, particularly related to packaging and fuel costs. Following the correction, Britannia is trading at approximately 39 times its 12-month forward earnings, around 15% below its five-year median valuation.
However, UBS noted that the expected improvement in the margin cycle has been deferred to FY28. Continued progress in incremental price increases, supporting a move towards double-digit earnings growth, could emerge as an important catalyst for the stock.
2. Citi on CG Power: Buy, Target Price ₹1,100
Citi has maintained its Buy rating on CG Power with a target price of ₹1,100.
The brokerage's positive view follows the company's announcement that the Hon'ble High Court has stayed the closure notice issued by the Maharashtra Pollution Control Board (MPCB) for its Waluj manufacturing facility in Aurangabad, Maharashtra.
CG Power received the closure notice on November 3, citing alleged violations under the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981.
Citi noted that companies facing similar regulatory notices have historically either secured interim relief through the High Court, followed by a favourable resolution, or undertaken the necessary corrective measures to obtain regulatory approvals.
3. Goldman Sachs on Data Patterns: Neutral, Target Price ₹4,165
Goldman Sachs has maintained a Neutral rating on Data Patterns with a target price of ₹4,165.
During its earnings call, the company's management described its business model as programme- and project-based, with revenue execution typically weighted towards the fourth quarter.
Management indicated that production had commenced for deliveries scheduled in Q3 and Q4. Execution over the next five months is expected to support the company's full-year guidance.
Data Patterns has maintained its FY27 guidance of:
Revenue growth: 20–25%
EBITDA margin: 35–40%
On the positive side, the company reported strong order inflows of ₹930 crore in Q2FY27, taking first-half FY27 order inflows to ₹1,050 crore.
4. Nomura on Hindalco: Buy, Target Price ₹1,100
Nomura has maintained its Buy rating on Hindalco Industries with a target price of ₹1,100.
The brokerage believes the company's earnings are gradually normalising, while its long-term growth outlook remains intact.
According to Nomura, Q3FY27 is expected to be the weakest quarter, followed by a recovery in Q4FY27.
Key highlights from the brokerage report include:
Q2FY27 earnings benefited from copper-related one-off factors and pot relining, supporting an otherwise strong quarterly performance.
India upstream aluminium and copper earnings are expected to soften in Q3 due to higher costs and normalisation.
Management expects leverage to remain close to 2x despite higher capital expenditure.
The long-term growth outlook remains intact.
Nomura highlighted several risks, including a sharper decline in London Metal Exchange (LME) prices, delays in captive coal availability at the Chakla and Bandha mines, execution risks associated with the large Indian capital expenditure programme and slower-than-expected deleveraging at Novelis.
5. UBS on Hindalco: Buy, Target Price ₹1,325
UBS has maintained its Buy recommendation on Hindalco with a target price of ₹1,325.
The company reported Q2FY27 EBITDA of ₹128 billion, approximately 8% above UBS estimates and 15% above consensus expectations. EBITDA increased 43% year-on-year but declined 8% sequentially.
The earnings beat was primarily driven by higher aluminium realisations and strong performance from Novelis.
Key operational highlights:
Aluminium market:
LME aluminium prices increased 23% year-on-year but declined 10% quarter-on-quarter in Q2FY27.
LME alumina prices declined 3% year-on-year but increased 13% sequentially.
Novelis performance:
Shipments stood at 919 kilotonnes, approximately 1% below UBS estimates.
Adjusted EBITDA per tonne came in at US$553, slightly above UBS estimates of US$550.
EBITDA per tonne increased 23% year-on-year but declined 2% quarter-on-quarter.
Aluminium upstream:
EBITDA increased 55% year-on-year but declined 5% quarter-on-quarter to ₹70 billion.
The figure was approximately 12% above UBS estimates.
Higher LME benchmark prices, elevated realisation premiums and in-line production costs supported performance.
Copper business:
Copper EBITDA came in at ₹16.7 billion against UBS estimates of ₹10.2 billion.
EBITDA per tonne expanded to US$1,509 compared with UBS estimates of US$850.
UBS believes Hindalco's strong aluminium and copper performance, along with Novelis' contribution, supports its positive investment outlook.
6. Nomura on Tata Steel: Buy, Target Price Cut to ₹210 from ₹240
Nomura has maintained its Buy rating on Tata Steel but reduced its target price to ₹210 from ₹240.
The brokerage expects Netherlands operations to remain EBITDA-positive in Q3, while India's EBITDA performance is expected to improve.
The target price reduction is largely attributed to lower FY28–FY29 EBITDA expectations for Tata Steel's European business, reflecting lower capacity utilisation and higher costs due to project delays and the West Asia crisis.
Nomura has reduced its FY28 and FY29 EBITDA estimates by 7% each to ₹40,800 crore and ₹46,100 crore, respectively. Estimates for the Indian business remain unchanged.
Additionally, the brokerage has reduced the one-year forward EV/EBITDA valuation multiple for India's business to 7x from 8x as it factors in the potential loss of iron ore mines by FY30.
Nomura also highlighted that near-term EBITDA includes higher iron ore sales, which are less margin-accretive compared with steel volumes.
7. UBS on Tata Steel: Neutral, Target Price ₹220
UBS has maintained a Neutral rating on Tata Steel with a target price of ₹220.
The company reported consolidated Q2FY27 EBITDA of ₹105 billion, approximately 1% above UBS estimates and 6% above consensus expectations. EBITDA increased 18% year-on-year, supported by stronger realisations.
Key operational highlights:
India business:
Production increased 9% year-on-year.
Sales increased 8% year-on-year.
On a quarter-on-quarter basis, production and sales increased 7% and 16%, respectively.
Demand remained stable across market segments.
Netherlands business:
Production declined 9% year-on-year.
Sales declined 16% year-on-year, impacted by the shutdown of the direct sheet plant.
EBITDA per tonne improved to ₹6,085, supported by the restart of a key plant in early August.
UK business:
Deliveries declined 33% year-on-year.
EBITDA losses increased sequentially from ₹3.4 billion to ₹7.2 billion due to lower volumes and narrower spreads.
At the consolidated level, EBITDA per tonne improved by approximately ₹560, or 4% quarter-on-quarter, to ₹13,462.
8. CLSA on MRF: Outperform, Target Price ₹1,65,238
CLSA has maintained its Outperform rating on MRF with a target price of ₹1,65,238.
MRF reported a Q2FY27 EBITDA margin of 10.7%, contracting 73 basis points quarter-on-quarter.
The margin pressure was primarily driven by a 95-basis-point sequential contraction in gross margins, following an 8–9% quarter-on-quarter increase in the raw material basket price.
However, tyre manufacturers have already implemented price increases of 13–15% in the replacement segment during the first half of FY27 to counter rising commodity costs.
Cost-reduction initiatives have also helped partially offset inflationary pressures.
CLSA highlighted that original equipment manufacturer (OEM) price revisions generally flow through with a one-quarter lag. Therefore, the full benefit of the price increases implemented in Q2FY27 is expected to be reflected in Q3FY27.
The brokerage expects profitability to improve from FY28CL as commodity prices soften following the recent decline in crude oil prices and the benefits of price hikes become more visible.
9. UBS on Kalyan Jewellers: Buy, Target Price ₹900
UBS has initiated coverage on Kalyan Jewellers with a Buy rating and a target price of ₹900.
The company reported a strong Q2FY27 performance, with consolidated revenue excluding bullion growing 27.5% year-on-year, supported by approximately 20% same-store sales growth (SSSG).
The key financial highlights include:
Revenue growth: 27% year-on-year, broadly in line with expectations.
Profit before tax (PBT) growth: 35% year-on-year, ahead of expectations.
Clean EBITDA growth: 26% year-on-year, slightly below expectations.
PBT performance remained stronger than anticipated.
The company also reported certain one-off items during the quarter.
10. IIFL Finance in Focus After ₹6,414 Crore Capital Raise Led by Blackstone
IIFL Finance is expected to remain in focus after its board approved a ₹6,414 crore primary capital raise led by global investment firm Blackstone.
The capital infusion is expected to strengthen the company's balance sheet, improve financial flexibility and support its future growth plans.
Key details of the capital raise:
Blackstone: Will invest ₹5,000 crore for an approximately 16% stake on a fully diluted basis.
Anchorage Capital: Will invest ₹150 crore.
Promoters Nirmal Jain and R. Venkataraman: Will invest ₹1,264 crore through warrants.
The participation of Blackstone represents a significant development for IIFL Finance, bringing a large institutional investor into the company's capital structure.
Disclaimer: This article is for informational and educational purposes only. The brokerage recommendations, target prices and financial estimates mentioned above are based on the research views and information provided by the respective brokerages. These views may change depending on market conditions and company developments. This article does not constitute investment advice or a recommendation to buy, sell or hold any security. Investors should conduct their own research and consult a SEBI-registered investment adviser before making investment decisions.
