Major Brokerages Issue Fresh Stock Recommendations and Target Prices
In a series of significant market updates, leading global and domestic brokerages have released new ratings and target prices for several key Indian stocks, highlighting strategic moves, financial outlooks, and sectoral challenges.
Citigroup Bullish on Bharti Airtel's NBFC Foray
Citigroup has assigned a buy recommendation to Bharti Airtel, setting a target price of Rs 2,380. Analysts view the telecom giant's expansion into the non-banking financial company (NBFC) sector as a natural strategic adjacency to diversify its portfolio and develop a new growth engine. This move is anchored by a planned capital infusion of Rs 20,000 crore over the next few years.
Over the past two years, Bharti Airtel has built a robust lending service provider model by integrating technology, data, and customer insights. The company now aims to scale this business using its balance sheet, leveraging its strong free cash flow (FCF) generation and upcoming rights issue payment. Analysts believe this foray should not materially impact leverage or cash flows. However, they note that achieving optimal capital utilisation with efficient risk-adjusted returns and meaningful scale typically takes several years for lending platforms.
CLSA Adjusts ITC Rating Amid Tax Hike Concerns
CLSA has maintained an outperform rating on ITC but reduced the target price to Rs 367 from Rs 485. This adjustment follows a significant increase in indirect taxes on cigarettes, effective from February 2026, due to the replacement of the compensation cess by GST and excise duties.
Analysts estimate that ITC will need to implement price increases of approximately 33% to maintain earnings before interest and taxes (EBIT) neutrality per cigarette. This is expected to drag volumes and EBIT in the cigarette division for FY27. A recovery is anticipated in FY28, assuming no further tax increases, based on ITC's historical ability to pass on such tax hikes.
Kotak Downgrades ABB India on Valuation Concerns
Kotak Institutional Equities has downgraded ABB India to a reduce rating with a target price of Rs 5,750. The company reported a decent October-December 2025 quarter in terms of execution, with margins supported by one-off mark-to-market gains.
Key positives include the growing relevance of emerging and high-growth segments, along with traction in parts of the 52% salience to core sectors. However, ABB India is operating at the lower end of its guided profit after tax (PAT) margin range and expects only slow margin improvements due to challenges from high-cost inventory and raw material headwinds. With a one-year forward price-to-earnings (P/E) ratio of 63X, the stock appears to be pricing in all optimism for the start of a private capital expenditure cycle.
Morgan Stanley Cautious on Urban Company's Prospects
Morgan Stanley has assigned an underweight rating to Urban Company with a target price of Rs 120. The company's Instahelp vertical has crossed the milestone of 50,000 daily bookings, indicating scaling progress.
While competition remains a key risk, consistent scaling and improving unit economics are expected to alleviate concerns. Management has provided an outlook to achieve consolidated adjusted EBITDA breakeven by the third quarter of fiscal 2028 (Q3F28). Analysts view this as achievable and a conservative estimate, given the company's strength in core segments. They also note that investments in Instahelp will depend on the external environment.
Jefferies Confident in Eternal's Growth Trajectory
Jefferies has issued a buy recommendation on Eternal with a target price of Rs 480. The company's Chief Financial Officer expressed confidence in the medium-term outlook, with the food delivery business expected to sustain a growth rate of about 20% alongside modest margin expansion.
The quick commerce total addressable market remains attractive, though intense competition warrants caution. Management stated that Blinkit will maintain a rational approach, posing some risk to growth despite high margin confidence. Additionally, management clarified Deepinder's move to vice chairman, ruling out any stake sale or window-dressing of profits.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
