Bank of America Securities on Pidilite
Bank of America Securities has updated its outlook on Pidilite, raising the target price to ₹1,475. The company reported a strong fourth quarter (4Q), but it faces changing business dynamics that present challenges in navigating macroeconomic volatility and cost pressures. With input costs inflation estimated at 40-50%, profit margins may trend toward the lower end of the company’s guided range, despite having already implemented two price hikes. Factors such as price elasticity and competition are noted as important considerations moving forward.
Goldman Sachs on Pidilite
Goldman Sachs maintains a “Buy” rating on Pidilite with a target price of ₹1,700. The company exhibited a robust 4Q FY26, achieving a 15% revenue growth, exclusively driven by volume increases. Management indicated no channel stocking and reported strong demand trends in April, similar to the preceding quarter. Growth was bolstered by a significant performance in the core adhesives portfolio, alongside increased sales in tile adhesives and waterproofing. Input costs inflation of 40-50% led to the initiation of price hikes of around 12-13%.
Citi on Britannia
Citi has downgraded its outlook on Britannia, maintaining a “Buy” recommendation but cutting the target price to ₹6,500. The company experienced subdued growth in 4Q, with revenue and EBITDA rising by only 6%. This performance was negatively impacted by external factors, including the conflict in West Asia affecting exports and the continuation of dual pricing in the market. The company is relocating its export manufacturing to Mundra, expected to be completed by mid-May, which may continue to have a 2-3% impact in the first quarter. Nevertheless, Citi anticipates that pricing pressures will ease and growth will improve from 2Q onwards.
CLSA on Britannia
CLSA assigns a “Hold” rating on Britannia with a reduced target price of ₹5,569. The company’s consolidated sales growth reached 7.1%, falling short of estimates, while profit before tax (PBT) missed expectations by 14% due to slower sales growth and compressed EBITDA margins. Volume growth stood at 5.5% year-on-year, affecting low price-point packs, which represent 60-65% of the Indian market. The company’s production transition to Mundra may mitigate international business challenges by the second quarter of FY27.
Bank of America Securities on Britannia
Bank of America Securities adopts a neutral stance on Britannia, lowering the target price to ₹5,820. The 4Q growth and earnings fell short of expectations, primarily due to competitive pressure and international supply issues. While Britannia is undertaking corrective measures, the anticipated benefits from GST cuts have yet to materialize. Earnings have been reduced by 3%, with growth expected to gradually improve amid challenges in commodities, competition, and execution.
Macquarie on ABB
Macquarie has downgraded its outlook on ABB to Underperform from Neutral, with a target price of ₹5,470. The company’s first quarter results were significantly below estimates, with EBITDA and PAT declining by 27% and 25%, respectively, despite a 6% sales growth. Margin contractions were attributed to delayed execution, rising input costs, and adverse revenue mix and foreign exchange movements. Although new orders rose by 25%, a slower growth in base orders has been noted.
Jefferies on ABB
Jefferies has also downgraded ABB to Underperform with a target price of ₹5,915. The company restated its March quarter financials due to the sale of its robotics business. With EBITDA miss at 29% below estimates, margin pressures were noted as margins fell to 12.8% from higher commodity costs. The firm anticipates subdued industrial capex growth outside of Power Transmission & Distribution, complicating margin recovery efforts.
Bank of America Securities on ABB
Bank of America Securities maintains an Underperform rating on ABB, assigning a lower target price of ₹4,764. The firm notes slower revenue growth attributed to inflation and a significant decline in margins. Despite strong order growth at 25% year-on-year, continued margin pressure and high valuations remain concerns.
Citi on ABB
Citi rates ABB as “Sell,” with a target price of ₹5,200. The company’s EBITDA fell by 19% year-on-year, significantly missing estimates due to margin contractions influenced by commodity inflation and execution issues. Strong order inflow appears to be accounted for in current valuations.
Citi on Mahanagar Gas (MGL)
Citi has issued a “Buy” recommendation for MGL with a target price of ₹1,400. The company reported a 4Q EBITDA of ₹2.6 billion, aligned with estimates, but down 26% quarter-on-quarter. Volume growth was 6% year-on-year, albeit offset by weaker margins. MGL declared a final dividend of ₹18 per share, with full-year earnings per share at ₹86. LNG supply disruptions linked to Middle Eastern tensions represent risks, but positive government initiatives support long-term growth in the city gas distribution sector.
Bank of America Securities on MGL
BoFA Securities maintains a “Buy” rating on MGL with a revised target price of ₹1,330. The company’s 4Q EBITDA of ₹2.6 billion was below consensus, and while volumes grew by 6%, margins were impacted by gas-cost and foreign exchange volatility. Preliminary measures are expected to bolster growth in D-PNG and I&C-PNG segments.
Jefferies on Mahanagar Gas
Jefferies has rated Mahanagar Gas as Underperform, with a target price of ₹1,020, up from ₹900. The company’s EBITDA fell by 22% year-on-year and was 6% below estimates, with margins adversely affected by rising gas costs. Volume growth has slowed, registering three consecutive quarters of decline. Delays in the Qatar North Field expansion project may persist until late CY2027-early CY2028.
Jefferies on Adani Energy Solutions
Jefferies has issued a “Buy” recommendation for Adani Energy Solutions, raising the target price to ₹1,665 from ₹900. The growth outlook remains optimistic, bolstered by a solid order book and consistent distribution growth. EBITDA performance is expected to remain strong, although risks include the potential for increased interest rates and market share loss.
Jefferies on the Cement Sector
Jefferies identifies UltraTech Cement and JK Cement as top picks in the cement sector, which is showing early signs of capital discipline. Leading companies are scaling back expansion plans to address weak capacity utilization; for example, Shree Cement reduced its capex from ₹3,000 crore to ₹1,500 crore, while Ambuja Cements has postponed significant projects. This shift in focus from volume to profitability is anticipated to continue, though sustainability depends on maintaining discipline during economic upswings.
Bank of America on Escorts Kubota
Bank of America maintains a neutral outlook on Escorts Kubota, with a target price adjusted to ₹3,500 from ₹3,700. The current tractor cycle softening leads to a pause in near-term upside, even as medium-term prospects appear promising. Margin pressures exceed initial expectations.
Morgan Stanley on Urban Company
Morgan Stanley recommends an Underweight position on Urban Company, setting a target price of ₹128, raised from ₹120. The company has demonstrated effective execution and a strong intent to capture the instant services market. However, the competition in this space is intensifying, and sustained investment levels could remain elevated.
