Brokerage firm HSBC shares its take on the Indian IT sector, emphasising the weak cash conversion that top dogs in the largecap and midcap space, including the likes of Tata Consultancy Services Ltd., Coforge Ltd., and Persistent Systems Ltd. have been witnessing.

Goldman Sachs has initiated coverage on Pepsico bottler Varun Beverages Ltd. with a ‘buy’ call, stating that multiple drivers support outperformance, backed by international expansion capacity.

NDTV Profit tracks what analysts are saying about various stocks and sectors. Here are the analyst calls to keep an eye out for on Tuesday.

Morgan Stanley On Brainbees Solutions

  • Maintain ‘overweight’ rating with a target price of Rs 574.

  • The quarter ended March showed in-line topline but missed on margins.

  • The company improved disclosures, disclosing for the first time that the apparel and footwear category accounts for 52% of India multichannel gross merchandise value.

  • Management is focusing on improving offline growth in India and driving margin expansion in GlobalBees.

HSBC On IT Sector

  • Highlights a dip in cash conversion for IT companies in the financial year 2025.

  • Mid-tier companies’ performance deteriorated further compared to top-tier peers.

  • The market still disproportionately values growth, though earnings quality is gaining some attention.

  • Sector leader Tata Consultancy Services has seen a steady decline in cash conversion.

  • Coforge and Persistent Systems remain the weakest in cash conversion metrics.

CLSA On Tyres

  • Initiate coverage with a positive outlook on the auto tyre space.

  • Does not see material risk to market share of leaders in passenger car radial and truck and bus radial segments.

  • Return on capital employed took a hit when incumbents expanded into truck and bus radials during 2016-23.

  • Any negative reaction in Apollo Tyres, CEAT, and MRF would be an opportunity to add.

  • Remains positive on the sector, expecting a margin upcycle supported by softening raw material prices.

Goldman Sachs On Varun Beverages

  • Initiate ‘buy’ rating with a target price of Rs 600.

  • The company is unlocking market potential through superior execution.

  • Multiple drivers support outperformance in India’s fast-growing ready-to-drink market.

  • International expansion offers additional opportunities, backed by a strong track record.

  • The impact of new entrant ‘Campa Cola’ is not disruptive.

  • Inflection in free cash flow is likely as the high capital expenditure phase is behind.

Jefferies On Finolex Industries

  • Maintain ‘buy’ rating and hike target price to Rs 275 from Rs 265.

  • The quarter ended March showed strong margin revival quarter-on-quarter.

  • Finolex is viewed as a good play on agriculture and rural income growth.

  • The company can benefit from the government’s housing push.

  • Plans to raise the margin-accretive plumbing mix to 50% from around 35% currently bode well for margins.

  • Finolex trades at a steep discount to peers.

Jefferies On JK Cement

  • Maintain ‘buy’ rating and hike target price to Rs 5,925 from Rs 5,520.

  • Continued outperformance among mid-cap cement peers.

  • On track to reach 30 million tonnes per annum capacity by financial year 2026.

  • Plans for 50 million tonnes per annum in the medium term to support growth trajectory.

  • Premium valuations are likely to continue amid consistent outperformance versus similar-sized peers.

CLSA On Fusion Finance

  • Maintain ‘underperform’ call with a target price of Rs 155.

  • The brokerage remains cautiously optimistic.

  • MFI segment growth guidance points to better clarity after the first quarter of this fiscal.

  • Over 13% customers on the current book have more than three lenders.

Jefferies On Chemicals

  • Navin Fluorine is better placed in the final quarter amidst flat demand outlook.

  • Innovators are guiding for flat growth in yearly revenue in 2025 with pricing pressure in Latin America.

  • Chinese agchem exports are elevated, while crop prices are mixed.

  • PI is facing demand peak out in key product and slower than expected pick up in pharmaceuticals.

  • Navin’s long-term contract startups provide strong earnings growth visibility.

  • SRF’s valuation is extended with limited visibility on earnings growth.

  • Prefer PI Industries and Navin Fluorine.

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