Brokerage Firms Unveil Key Stock Recommendations Across Sectors
In a series of recent equity research reports, top financial institutions have issued critical stock calls, setting target prices and outlining growth prospects for several major companies. These analyses provide investors with insights into potential opportunities and risks in the current market landscape.
Morgan Stanley Initiates Coverage on Fractal Analytics with Bullish Outlook
Morgan Stanley has commenced its coverage on Fractal Analytics, assigning a target price of Rs 946. Analysts view the company as a formidable challenger in the competitive technology services sector. They highlight its robust positioning within the data and analytics domain, a segment that is expanding at a faster rate compared to overall IT services expenditure.
Additionally, Fractal's platform-centric strategy for delivering agentic AI services is expected to sustain revenue growth that outpaces industry averages. The firm anticipates improvements in gross margins and operational leverage, which should elevate earnings before interest and taxes (EBIT) margins to approximately 15%, thereby narrowing the performance gap with its peers.
UBS Maintains Buy Rating on ITC Following Pricing Adjustments
UBS has reaffirmed a buy rating for ITC, with a target price set at Rs 395. This recommendation follows the company's implementation of price increases across its cigarette portfolio, a move prompted by additional excise duties effective from February 1 this year.
ITC has adopted a three-pronged pricing approach designed to safeguard volume levels. By ensuring a same-price option for all sensitive variants, the company aims to minimize volume impact, barring potential trade destocking. However, this strategy may result in a mid-single-digit decline in net realizable value. Despite this, analysts believe ITC is poised to exceed conservative consensus expectations for the fiscal year 2027.
Motilal Oswal Securities Bullish on Tata Power's Strategic Developments
Motilal Oswal Securities has issued a buy call for Tata Power, targeting a price of Rs 455. A significant positive catalyst is the finalization of the supplemental power purchase agreement (SPPA) with Gujarat, which addresses viability challenges at the Mundra plant.
If adopted by all states, this agreement could reduce Mundra's annual losses by 75% from the current Rs 1,700-1,800 crore, leading to a 4.5-5.5% upward revision in net profit estimates for FY27/28. Beyond Mundra, Tata Power's strong performance in Odisha and Delhi distribution businesses, along with growth in rooftop solar and plans for a 10GW ingot/wafer manufacturing capacity, positions the company for sustained expansion.
Nuvama Advises Caution on Coal India Amid Supply and Demand Concerns
Nuvama has assigned a reduce rating to Coal India, with a target price of Rs 384. Analysts express skepticism regarding the company's narrative of higher volumes and e-auction prices, citing factors such as excess domestic supply, increased competition, and relatively subdued demand.
While e-auction volumes may rise, prices are expected to remain range-bound. Volume growth in FY26 is uncertain, and a 4% compounded annual growth rate (CAGR) from FY26 to FY28 faces risks due to higher output from captive miners. Additionally, an impending wage revision for non-executives from July 2026 may not be fully passable, likely resulting in muted earnings over the forecast period.
Kotak Institutional Equities Highlights Valuation Concerns for Power Grid Corp
Kotak Institutional Equities has given a reduce rating for Power Grid Corporation, setting a target price of Rs 300. The company has increased its capital expenditure (capex) and capitalization guidance for FY26 to Rs 35,000 crore and Rs 25,000 crore, respectively, while maintaining projections for FY27-28.
Improved capitalization is largely attributed to the resolution of right-of-way issues. Management has highlighted the Central Electricity Authority's estimate of Rs 7.9 lakh crore in transmission capex for non-fossil fuel capacities by FY36, with additional opportunities from global undersea projects and the Brahmaputra basin. However, despite a longer growth runway, valuations at 16 times price-to-earnings are considered saturated, prompting a cautious stance.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips provided by experts are their own and do not represent the views of The Times of India.
