Stock Market Radar
Check out the latest brokerage calls and analyst comments on the stocks in action today. Our coverage includes Avenue Supermarts, Just Dial, and Larsen & Toubro, among others. On the sectoral front, we have coverage on life insurers and oil marketing companies.
Avenue Supermarts
Bernstein On Avenue Supermarts
Outperform Call, Target Rs 5,800/sh
Biggest Miss Was Rev Growth, Slowest In 4 Years, LFL Growth Slowest In 3 Years
Standalone EBITDA & Margin Were Slightly Lower YoY Due To Operating Leverage
Co Can Get Back To 20% + Growth On Faster Store/Retail Area Addition
Co Can Get Back To 20% + Growth If We See Increased Focus With 4-6 Hr Delivery
Co Can Get Back To 20% + Growth On Reduced Competitive Intensity From QC In Metros
Anticipate These To Take 3-5 Quarters To Impact
CLSA On Avenue Supermarts
Outperform Call, Target Rs 5,360/Sh
Q2 Sales & PAT Below Expectations
Gross Margin Was 30 Bps Below Estimate
Pat Was Notably Below Estimate With Higher-Than-Expected Employee Costs
Cut FY25-FY27 Est 13-15% To Reflect Slower Sales & Higher Overhead Costs
While Co’s Mgmt Called Out Increased Competition From Ecommerce As A Challenge In Q2
Believe Co Is Making Appropriate Pivot To Private Labels
Pivot To Private Labels Will Place It Well To Meet Future Competition
JPMorgan On Avenue Supermarts
Downgrade To Neutral, Target Cut To Rs 4,700 From Rs 5,400/Sh
Q2 Below Expectations; Revenue Growth Moderated On Back Of Slower LFL Growth
Press Release This Time Noted Clear Impact Of Online Grocery Formats
Extent Of SSSG Moderation Surprised Us
Lower Our SSSG/Revenue Forecasts By 4-6% Over FY25-26
Life Insurance
HSBC On Life Insurance
Strong Individual APE Growth In Sep 2024 Was Driven By LICI
Growth In Number Of Policies Sold Also Remained Healthy
Preponement Of Sales Due To Commission Structure Changes Could Drive A Strong LICI Growth
New Pdt Launches, Deepening Distribution Point To Positive Industry Growth Outlook
MS On Life Insurance
Private Sector Individual APE At 28% YoY Was On A Base Of 12% YoY (In Sep-23)
ICICI Pru Life & HDFC Life Saw Strong Growth
Growth At SBI Life Was Muted At 9%, On A Relatively Strong Base Of 16%.
Q2 Growth For ICICI Pru Life, HDFC Life & SBI Life Was 34%, 28% & 11%
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Nomura On Life Insurance
Growth Of Public Ins Players Outpaced Overall Ind In Sep 2024
Growth Outpaced Overall Ind At 48% YoY (Vs ~1%/5% YoY In Aug-24/Sep-23)
Pvt Players’ Growth Was Also Strong At ~28% YoY (vs ~15%/12% In Aug-24/Sep-23)
Private Players’ Market Share Decreased To 65.0% In Sep 2024 (Vs 68.2% in Sep-23)
Within Pvt Ins Ind, Banca Players Continued To Outperform
Agency Players’ Growth Was Lower At 17% For The Month
Growth For Q2FY25 Came In At 21%/24% YoY For The Overall Ind/Pvt Players
CLSA On Life Insurance
Pvt Insurers Had 19%/18% YoY Growth In Q2/Total APE On A Base Of 13%/11%
Individual No Of Policies Sold Were Up 13%/14% YoY For Pvt Life Insurers In Q2/H1
Strong Momentum In Ulips Persisted In Q2, Like The Last 2 Quarters
For Q2, Max Life Was Strongest At 26% YoY Growth On A Very High 39% Base
ICICI Pru Life & HDFC Life Reported 22%/23% Growth On A Tepid 3/7% Base
SBI Life Had Just 1% YoY Growth In Q2FY25 But On A High 33% Base
Expect VNB Margins To Be Range Bound In H1 Vs Q1FY25, Except Max Life
Max Life Should See 2.5% Increase In VNB Margins, As Its Q1 Margins Were Seasonally Weaker
HSBC On OMCs
Current Volatility In Oil Prices Is Beneficial For OMCs
Current Volatility In Oil Prices Discourages Any Govt Interference In Pump Prices
Weakness In Auto Fuel Price Not Surprising Given Above Normal Monsoons; Expect To Recover
Maintain Buy Call on OMCs: BPCL, HPCL, IOC
Strong Marketing Margins Offset Weakness In GRMs
JPMorgan On L&T
Initiate Overweight Call, Target Rs 4,360/Sh
Co Is Trading At 25x FY26 Core EPS With 23% EPS CAGR Over FY24-FY27
Co Offers An Attractive Combination Of Growth At A Very Reasonable Valuation
Fast EPS Growth Will Be Driven By Healthy Core Revenue Growth Of 16%
Fast EPS Growth Will Be Driven By 60 Bps Core Margin Expansion Over FY24-FY27
With Its Vast Array Of Capabilities, Large Order Book, Strong B/S & Cash Flows
L&T Is Well Suited To Benefit From Capex Tailwinds In India & Middle East
MS On CONCOR
Underweight Call, Target At Rs 774/Sh
Q2 Handling Volume Growth Was 6% (Exim 4% & Domestic 14%)
This Was Below Q2FY25 Growth Est Of 7% (Exim 5% And Domestic 20%)
Q1FY25 Growth Was 6% (Exim 4% And Domestic 15%)
CCRI Had Previously Guided For F25 Exim & Domestic Growth To Be 15% & 25%, Respectively
A 2H Growth Requirement Of 26% In Exim & 35% In Domestic Segment Will Thus Meet Annual Guidance
Citi On Just Dial
Sell Call, Target At Rs 1,075/Sh
Q2 Revenue (+9% YoY) & EBITDA (+68% YoY; +2% QoQ) Missed Est By 2%/6% Respectively
PAT Was Ahead By 27% On Higher Other Income
Paid Campaign Net Adds At +7,000 (1% QoQ/7% YoY)
Realisations Growth At +2% YoY Were Both At The Slowest Pace Since Q1FY23
On Upside, User Traffic – Key To Sustained Campaigns And Realizations Growth
User Traffic Recovered Sharply To 15% YoY (1Q: 6% YoY)
Rise estimates, As Traffic Growth Recovery Sets Stage For Better Monetisation In Subsequent Qtrs
Will Watch For Sustenance In Trends Before Potentially Turning More Constructive
EBITDA Est Are Up 10%/13%/13% Vs Earlier For FY25/26