HDFC Securities has maintained its Buy ratings on Bajaj Finance, UltraTech Cement, Oberoi Realty and Sobha, while keeping Add recommendations on Union Bank of India, Piramal Finance and L&T Technology Services following their second-quarter FY27 earnings. The brokerage has raised target prices for Union Bank of India to ₹210 from ₹200 and for L&T Technology Services to ₹3,700 from ₹3,570, while keeping target prices unchanged across all other stocks. According to reports from NDTV Profit, the brokerage retained its Reduce rating on Shoppers Stop with an unchanged target price of ₹360. Emkay Global Financial has also joined the bullish sentiment on Sobha, maintaining a Buy rating with a target price of ₹1,900 based on 8x EV/embedded EBITDA at 19% premium to NAV. Now, Motilal Oswal has joined the positive momentum, maintaining a Buy rating with a revised target price of ₹1,710 for Sobha, indicating strong consensus among brokerages. The latest review extends to five additional companies - SRF, Havells India, CreditAccess Grameen, Cyient and Mahindra Lifespaces - with HDFC Securities maintaining existing ratings while revising target prices for four of these stocks.
Based on the reference market prices in the report, Sobha offers the highest implied upside at approximately 64%, followed by Oberoi Realty at 49%, UltraTech Cement at 36% and Bajaj Finance at 25%. As reported by NDTV Profit, the brokerage maintained unchanged target prices of ₹1,200 for Bajaj Finance, ₹14,500 for UltraTech Cement, ₹2,490 for Oberoi Realty and ₹1,930 for Sobha, all carrying Buy ratings. The Motilal Oswal target price of ₹1,710 aligns closely with HDFC Securities' ₹1,930 for the same stock, indicating strong consensus among brokerages. The 45% upside potential from Motilal Oswal's target price of ₹1,710 represents significant value creation potential for investors. The latest assessment also reveals strong upside potential for other stocks, with CreditAccess Grameen offering 46% upside, Cyient at 23%, Havells India at 20% and SRF at 29% based on revised target prices.
Sobha delivered exceptional Q2 pre-sales of ₹36.6 billion (+76% YoY), aided by strong sustenance sales, with 1HFY27 pre-sales standing at ₹58.6 billion (47% YoY), marking its best-ever half-yearly pre-sales. According to Emkay Global Financial's research report, the company has a launch pipeline of 12 million square feet (₹180 billion GDV) for 2HYF27 and unsold inventory of ₹185 billion. The brokerage expects Sobha to easily achieve pre-sales of ₹110-120 billion (35-45% YoY) in FY27E, against its guidance of ₹106 billion. While reported EBITDA margins remain muted at 6.5% in 1HFY27, they are expected to improve to +15% from Q3 onward, with the key monitorable being reported margins. Motilal Oswal reports that Sobha launched two projects in Q2 – Sobha Boulevard in Mysuru with GDV of ₹1.2 billion and Sobha Bellevue in Calicut with GDV of ₹11.5 billion. In Q2FY27, Bangalore remained the largest contributor with 60% share of the quarter's presales, followed by NCR at 27% and Kerala at 10%.
Following the second-quarter results for FY27, Nuvama has maintained Buy ratings on IDFC First Bank and Kotak Mahindra Bank with significant upside potential of around 32% and 28% respectively. However, the brokerage has adopted a cautious stance on AU Small Finance Bank, cutting its target price. According to Nuvama's assessment, there is pressure on net interest margins (NIMs) due to foreign currency non-resident (FCNR) deposits and higher funding costs across the banking sector. IDFC First Bank mobilised $3.6 billion through FCNR deposits to support credit growth ambitions, but higher funding costs put pressure on profitability with NIM declining by 32 basis points QoQ to 5.6% in Q2 FY27. The bank reported net profit of ₹1,040 crore with RoA at 0.9%. Kotak Mahindra Bank recorded credit growth of 25% during the quarter but faced pressure from FCNR-related funding costs with NIM declining by 22 basis points QoQ to 4.3%. Despite higher provisioning, the bank reported profit of ₹420 crore with RoA of 1.9%. AU Small Finance Bank reported annual growth of 25% in assets under management (AUM) but faced higher funding costs with NIM declining by 10 basis points QoQ to 5.8%. The bank's provision coverage ratio (PCR) declined to 60%, raising asset-quality concerns despite reporting profit after tax of ₹860 crore.
