Hot Stocks: Brokerage view on HDFC AMC, IDFC First, Apollo Tyres and Varun Beverages

Morgan Stanley on Varun Beverages: Overweight| Target Rs 1701

Morgan Stanley initiated coverage on Varun Beverages with an overweight rating and a target price of Rs 1701.

The company has a solid track record of scaling domestic and global opportunities as well as strong profitability.

Varun Beverages will continue to outpace F&B industry growth. Also, it fits in well with our preference for mass discretionary names in 2024, said the note.

Over the next 3 years, Morgan Stanley expects 19% revenue CAGR and 23.7% EBITDA margins growth.

The stock looks better placed than peers, as it is trading at 57x 2025 EPS estimate. Varun Beverages is now preferred pick in staples.

Morgan Stanley on Apollo Tyres: Equal Weight| Target Rs 475

Morgan Stanley maintained an Equal Weight rating on Apollo Tyres with a target price of Rs 475. The global investment bank is of the view that the share price will fall relative to the country index over the next 30 days.

Industry price competition is rising as we have seen price cuts by multiple players. This, coupled with rising commodity prices could lead to margin pressure.

The 12-month forward P/E of 17x looks expensive to us considering above factors.

Jefferies on IDFC First: Buy| Target Rs 100

Jefferies maintained a buy rating on IDFC First with a target price of Rs 100. The deposit franchise is well appreciated and margin expansion will be a positive.

Cost trends have disappointed but there are multiple levers for improvement. Credit quality is topical, but going forward deeper insights may help.

Capital needs are imminent & a rise in return on equity (ROE) is key.

JPMorgan on HDFC AMC: Overweight| Target Rs 4450

JPMorgan upgraded HDFC AMC to overweight from neutral earlier and also raised the target price to Rs 4450 from Rs 3500 earlier.

The market share has improved, led by better performance. The benefits of a merger still to flow through.

Core EBIT margin expected to hold steady despite better mix. Regulatory overhang seems to have abated.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)