Recently, several brokerage firms have shared their views on some prominent stocks. Let’s take a closer look at what they had to say.
Starting with SBI Cards and Payment Services, Jefferies, a brokerage firm, has maintained a buy rating on the stock with a target price of Rs 1100. They noted that the growth in industry card spending remains robust, despite the increasing popularity of UPI. Jefferies believes that the company’s strong spending and card net additions contribute positively to its future prospects. They also mentioned that credit costs might remain elevated in the near term, but they are expected to normalize in the future. Jefferies is optimistic about the company’s profitability, projecting a 26% compound annual growth rate (CAGR) in profit from FY23 to FY26. They also anticipate an expansion in Return on Equity (RoE) starting from the FY24 trough. Overall, SBI Cards continues to be one of Jefferies’ preferred picks in their portfolio.
On the other hand, JPMorgan, another renowned brokerage firm, downgraded Persistent Systems to underweight, providing a target price of Rs 4100. They pointed out that Persistent Systems has the highest exposure to discretionary spending among its peers, accounting for 83% of its portfolio compared to the industry range of 40-75%. JPMorgan considers the company’s valuations expensive, especially given the slowing growth in a challenging macroeconomic environment, which also limits potential margin expansion. Additionally, JPMorgan revised down the earnings projections by 3/4% over the period FY24-26 due to revenue cuts.
Moving on to Karur Vysya Bank, Emkay, a brokerage firm, expressed a positive outlook by maintaining a buy rating on the stock. However, specific details about their rating and target price were not provided.
Lastly, ICICIdirect, a reputed brokerage firm, maintained a buy rating on PCBL (Phillips Carbon Black Limited). They recommended a target price of Rs 200. PCBL is a leading manufacturer of carbon black, a reinforcing material used in tires. ICICIdirect highlighted that PCBL also generates approximately 9% of its sales volume from specialty carbon black, which commands high margins and finds applications in industries such as paints and plastics. They emphasized that PCBL possesses a healthy margin profile and operates with a capital-efficient business model, as reflected by a Return on Capital Employed (RoCE) exceeding 15% and limited leverage on the balance sheet (debt-to-equity ratio of around 0.3x as of FY23).
These insights from brokerage firms provide valuable information for investors considering these stocks, helping them make informed decisions about their investment strategies.
