Goldman Sachs has retained a neutral rating on Tata Motors, citing weaker-than-expected margin and cash flow guidance for FY27. The latest assessment comes after the brokerage's previous stance, which contrasts with Motilal Oswal's bearish sell rating on the passenger vehicle segment. Goldman Sachs' cautious approach reflects growing concerns about the company's near-term profitability prospects, particularly regarding the 4% EBIT margin guidance that translates into only a high single-digit EBITDA margin for FY27E. This neutral stance represents a more measured view compared to the aggressive sell recommendation from Motilal Oswal, highlighting the divergent brokerage opinions on the automotive giant.
At JLR's Annual Investor Day, management outlined ambitious FY27 targets including GBP 26 billion in revenue, implying 13% YoY growth, an EBIT margin of 4% rising 400 basis points YoY, and operating cash flow break-even versus a GBP 2.3 billion loss in FY26. The company plans capex of GBP 3.7 billion, broadly stable YoY. To achieve these targets, JLR will focus on healthy volume growth with increased emphasis on North America, its partnership with Stellantis to develop Defender for the US market, and increasing propulsion flexibility across brands. However, Goldman Sachs' neutral rating reflects concerns about the company's ability to deliver on these ambitious targets, particularly given the challenging margin expansion expectations.
Nuvama has reiterated its buy rating on Hindustan Unilever with a target price of ₹615, projecting a 40% surge driven by the company's vast reach and innovation capabilities. The brokerage's confidence in HUL stems from the company's strong fundamentals and market positioning. This recommendation contrasts with Goldman Sachs' neutral stance on Tata Motors, demonstrating selective optimism among brokerages despite recent market volatility. The positive outlook on HUL reflects the company's ability to capitalize on consumer demand trends and its established market presence across multiple product categories.
Brokerages remain optimistic about Shyam Metalics following the company's ambitious growth roadmap outlined at its recent analyst meet. The company is targeting a sharp expansion with revenue growing 2.3 times to ₹42,647 crore by FY31, while EBITDA is projected to increase 2.7 times to ₹6,236 crore during the same period. Management is also targeting a return on capital employed of 22% and return on equity of 20%, while expecting the balance sheet to turn net cash positive by FY31. Goldman Sachs has backed Shyam Metalics & Energy with a 10% upside target, anticipating strong growth from value-added products. The company highlighted that margins should improve as stainless steel capacity comes on stream, with around 75% of raw material requirement already integrated and access to low-cost captive power providing competitive advantages.
According to BofA Fund Manager Survey, investors remain steadfastly bullish despite being slightly less bullish than in May, with cash levels rising to 4.1% from 3.9%. The survey history suggests this is not a 'big top' for risk assets. JPMorgan maintains Overweight on United Spirits with a target of ₹1510, citing constructive growth outlook anchored on renovation and innovation. B&K initiates Buy on Thyrocare with a target of ₹615, highlighting franchise additions to drive profitability. The analysis covers multiple sectors including power companies, metals, and consumer stocks, with private power companies entering a thematic stage similar to previous investment themes that delivered strong returns over 2-3 years despite initially expensive valuations.
