Stock Recommendations Today: Banks, Coal India, Sobha On Brokerages Radar NDTV Profit Research NDTV Profit

Brokerages are largely bullish on realty major Sobha, and believe fiscal 2026 will be a much-awaited turnaround year for the company. Nomura shares its top picks in the banking space.

Investec sees a higher proportion of hotels within Yatra Online’s mix supporting a high-margin business model and has a bullish all on the stock.

Citi continues to prefer Infosys and HCL Technologies over other large-cap IT companies, and Jefferies views Finolex Cables as a good play on housing and construction sectors.

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.

Investec On Varroc Engineering

• Retain ‘buy’ rating with a target price of Rs 715, implying potential upside of 39.7%.

• Earnings before interest, taxes, depreciation and amortisation for the quarter ended March came in 5% ahead of estimates, led by a beat on margins.

• Ebitda margin improved, adjusted for higher sales due to new order wins worth Rs 60.5 billion.

• Execution of new order wins is expected to drive outperformance.

• Target multiple increased to 20 times from 15 times, supported by resolution of the Omnia joint venture dispute, deleveraging of the balance sheet, and a strong order book.

Investec On Yatra Online

• Maintain ‘buy’ rating with a target price of Rs 155, implying upside of 48.9%.

• The corporate business, which now accounts for 65% of gross booking value, is set to further increase.

• Yatra reported a 38% year-on-year increase in corporate bookings in financial year 2025.

• A higher proportion of hotels within the mix supports a high-margin business model.

• The company gave revenue growth guidance of 20% along with 30% growth in earnings before interest, taxes, depreciation and amortisation.

• Estimates a 36% earnings per share compound annual growth rate from the financial years 2025 to 2028.

Citi On Infosys

• Maintain ‘neutral’ rating with a target price of Rs 1,525.

• Infosys expects its margin range for the financial year 2026 to be similar to the current levels, with medium-term margin expansion anticipated.

• Valuations stand at approximately 22 times one-year forward consensus earnings per share.

• Clients are exhibiting caution and a “wait and watch” approach amid economic uncertainties.

• Citi highlights that widespread adoption of artificial intelligence faces challenges such as data readiness, governance, and employee training.

• Despite these challenges, Citi continues to prefer Infosys and HCL Technologies over other large-cap IT companies.

Jefferies On Finolex Cables

• Maintain ‘buy’ rating with a revised target price of Rs 1,235, up from Rs 1,200.

• Views Finolex Cables as a good play on housing and construction sectors.

• The stock is currently at a discount to peers after an 18% year-to-date dip.

• Electricals category is expected to remain the key growth driver.

• Communication sales growth is expected to be driven by optical fibre cable volumes.

Citi On June Monetary Policy Committee Preview

• The Reserve Bank of India is likely to deliver a 25 basis points rate cut in its upcoming MPC meeting and maintain an ‘accommodative’ monetary policy stance.

• RBI is expected to revise its gross domestic product growth forecast for the financial year ending March 2026 back to the pre-tariff war estimate of 6.7% year-on-year.

• A downward revision in inflation forecasts, coupled with a slightly above-normal monsoon, provides room for dovish guidance.

• Any new liquidity measures introduced by RBI would be considered a positive surprise.

• Further macroprudential relaxations are unlikely at this stage.

• Comments around the urgency to increase retail credit growth will be closely watched for signals on policy direction.

Citi On Honasa Consumer

• Maintained ‘sell’ rating with a target price of Rs 210.

• Raised sales estimates for the financial years 2026 and 2027 by 2-3%.

• Noted a stronger-than-expected growth recovery of key brands.

• Ebitda estimates were raised by 8-9%.

Morgan Stanley On Coal India

• Maintained ‘equal-weight’ rating with a target price of Rs 450, implying potential upside of 13%.

• Coal India’s production fell 14% year-on-year in May 2025.

• Offtake declined 8% year-on-year in May 2025, with dispatches moderating significantly.

• Among key subsidiaries, Northern Coalfields grew production by 12% year-on-year.

• Lower thermal power demand is likely impacting Coal India’s volumes.

• Continued weak offtake amid weak global coal prices is expected to weigh on first quarter financial year 2026 and full year 2026 earnings estimates.

Macquarie On GAIL (India)

• Reiterated ‘outperform’ rating with a target price of Rs 215, up from Rs 200.

• Higher transmission tariff expected, with a base-case tariff of Rs 70 per million British thermal units, assigned a 50% probability.

• Favourable long-term thematic outlook and inexpensive valuations, supported by a 4% dividend yield.

• Strong medium-term visibility on transmission volumes and improvement in petrochemicals profitability.

On Lemon Tree Hotels

Investec

• Maintained ‘buy’ rating with a revised target price of Rs 176, up from Rs 170.

• Delivered a robust performance in the quarter ended March, supported by multiple growth levers.

• Management has guided for margin scalability to 55% over the next two to three years.

• Projects compound annual growth rates of 16% in revenue and 18% in Ebitda over the financial years 2025-2027.

Macquarie

• Maintained ‘outperform’ rating but cut target price to Rs 200 from Rs 210.

• Revenue and Ebitda beat was driven only by other services revenue, as average room rate and management fees missed estimates.

• The quarter ended March was mixed, but the investment thesis remains intact.

• Expects the strong pipeline to support free cash flow and returns.

• Lowered revenue and Ebitda estimates for the financial years 2026, 2027, and 2028 by 3%, 4%, and 4%, respectively.

On Sobha

Investec

• Maintained ‘buy’ rating with a target price of Rs 2,150, implying upside of 54.9%.

• Financial year 2025 performance was disappointing, but strong launches are planned for fiscals 2026 and 2027.

• A strong project pipeline is expected to drive pre-sales, with 30-35% growth anticipated in FY26.

• The company plans to launch 18.56 million square feet across nine cities over the next two years.

• Expects 8-9 million square feet of launches in FY26 with a gross development value potential of Rs 5,000-6,000 crore.

HSBC

• Maintained ‘buy’ rating and increased target price to Rs 1,850, implying upside of 29.1%.

• FY26 will be the much-awaited turnaround year for Sobha, according to brokerage.

• Expects improvement in launches and balance sheet strength to drive growth.

• Management targets 30% growth in pre-sales and 10% growth in the contracts business.

• HSBC believes the company has resolved its debt-related issues through strong operating cash flow generation.

• The current business situation warrants a valuation re-rating.

HSBC On Apollo Hospitals

• Maintained ‘buy’ rating with a target price of Rs 8,090, implying upside of 17.6%.

• Hospitals revenue rose 10% year-on-year in the quarter ended March, driven by a pick-up in volume and mix.

• The company plans to add a new 700-bed unit in Bengaluru, expanding its presence in the region.

• Apollo Hospitals aims for cost breakeven for its 24×7 digital health platform by the third or fourth quarter of the financial year 2026, led by improving scale.

Citi On Vodafone Idea

• Maintained ‘buy’ rating with a High Risk designation.

• Target price cut to Rs 10 from Rs 12, implying 42% upside.

• Revenue fell 1% quarter-on-quarter, broadly in line with estimates.

• Cash Ebitda declined 5% quarter-on-quarter, 2% below estimates.

• Subscriber losses narrowed to 1.6 million in Q4 from 5.2 million in the previous quarter.

• ARPU grew 12% year-on-year, reaching Rs 175 in Q4 FY25, supported by tariff hikes and customer upgrades.

• Rising capital expenditure is driving 4G coverage expansion.

• Completion of the planned Rs 20,000 crore fundraise is key for financial stability and network expansion.

• Improving business momentum is contingent on clarity and relief regarding AGR dues.

On Banks 

Nomura

• System credit growth moderated to 11.3% year-on-year in April 2025, down from 12.1% in March 2025.

• System loan-to-deposit ratio remained steady at 78%.

• Unsecured retail loan growth picked up to 10% year-on-year, compared to 9% previously.

• Non-banking financial companies loan growth weakened to 3% year-on-year, down from 6%.

• System liquidity remained in surplus at Rs 1.8 lakh crore.

• Nomura continues to avoid unsecured retail loans and microfinance segments due to higher risks.

• Top banking stock picks include ICICI Bank, State Bank of India, and Axis Bank, citing strong underwriting standards.

Morgan Stanley

• System credit growth eased to 9.8% year-on-year in April 2025, down from 10.8% in March 2025.

• Retail loan growth remained steady at 11.5%, with mortgage growth slowing to 9.6%.

• Industry loan growth declined to 6.5% year-on-year from 7.8%.

• Non-banking financial company credit growth remained weak at 3.6% year-on-year.

• Agricultural loan growth eased to 9.3%.

Macquarie

• Term deposit rates are being cut faster than loan rates.

• Term deposit rates have fallen by about 26 basis points, while loan rates have declined by around 6 basis points.

• The cut in outstanding loan rates has been higher, at approximately 17 basis points.

• Strong system liquidity is enabling banks to reduce deposit rates more quickly, helping lower their overall cost of funds.

• As a result, net interest margin compression is expected to be lower in this rate-cutting cycle compared to previous cycles.

• Improved liquidity conditions are expected to support a pickup in both credit growth and deposit growth going forward.

Jefferies On Adani Ports And Special Economic Zone

• Maintained ‘buy’ rating with a revised target price of Rs 1,700, up from Rs 1,475, implying 19% upside.

• Management reiterated a five times rise in logistics revenue over the financial years 2025 to 2029.

• Fiscal 2026 is expected to be a year of inflection for the logistics business.

• Strong cash flows are expected to support capex plans for fiscals 2025 to 2029.

• Net debt to Ebitda ratio is expected to improve to 1.3 times by fiscal 2028, well below the target range of 2.2-2.5 times.

• The target price increase is based on a higher valuation multiple of 17 times the fiscal 2027 EV/Ebitda, up from 15 times earlier.

. Read more on Markets by NDTV Profit.Here are the analyst calls to keep an eye out for on Tuesday.  Read MoreMarkets, Business, Notifications 

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