Stock Recommendations Today: IT, Pharma, Tata Steel, Hindalco On Brokerages’ Radar NDTV Profit Research NDTV Profit

Information technology and pharma sector, Tata Steel Ltd., and Hindalco Ltd. were among the top companies on brokerages’ radar on Tuesday.

According to Macquarie, current pause in US-China tariffs lends support to the thesis that we are not likely to see sharp cutbacks to IT spending.

In addition, Citi expects US Executive Order to cut US Drug price as a negative for companies like Sun Pharma.

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.

Brokerages On IT Sector

Macquarie

• The current pause in US-China tariff escalation supports the view that we are unlikely to see a sharp reduction in IT spending.

• Macquarie expects signs of progress or resolution in trade talks over the next 90 days.

• Such developments could boost corporate confidence and encourage investment in larger IT programmes.

• This may lead to an upside to current earnings estimates.

• Macquarie remains optimistic about medium-term growth prospects for the sector.

• A multi-year technology refresh is expected, driven by significant changes in hardware.

• These changes are likely to result in an overhaul of enterprise technology architecture.

• The sector is entering a multi-year supercycle of IT spending, the first since the early 2000s, Macquarie said.

UBS

• UBS expects the macroeconomic outlook for IT services to deteriorate.

• Although valuations offer limited downside, spending appears paused or deferred based on industry checks.

• Fourth quarter of fiscal 2025 results and guidance have helped set realistic financial year 2026 expectations.

• Near-term, the sector may see some pullback due to valuation compression.

• Nonetheless, UBS sees long-term gains for Indian IT from cost-saving deals, higher outsourcing, and vendor consolidation.

• Any major correction could offer attractive buying opportunities in large-cap IT names like Infosys Ltd., HCLTech, and Tata Consultancy Services Ltd.

Brokerages On Pharma

Macquarie

• Macquarie notes the potential revival of the Most Favored Nation pricing model in the US.

• This could affect companies like Sun Pharma, which sells branded medications in the US.

• However, Macquarie believes generic manufacturers would be minimally impacted due to their already low pricing.

• Most generics are sold under Medicare Part D, which was not the focus of earlier MFN rules.

Citi

• Citi notes that high US drug prices are largely due to inefficiencies in the insurance system.

• A portion of these costs reflects margins retained by intermediaries such as pharmacy benefit managers.

• Merely reducing headline drug prices is unlikely to fully resolve the pricing issue.

• The feasibility of implementing such pricing reforms remains uncertain.

• Citi views recent headlines on drug price cuts as negative, particularly for companies like Sun Pharma.

• However, generic drug manufacturers are expected to be the least affected by these changes.

MS On OMCs

• IOCL is rated ‘overweight’ with a reduced target price of Rs 189 from Rs 205.

• BPCL is also rated ‘overweight’, with a revised target price of Rs 406 up from Rs 369.

• HPCL retained ‘overweight’ rating with a target price raised to Rs 516 from Rs 506.

• Global oversupply in oil markets and China’s shift from diesel to gas present positive tailwinds.

• Domestic factors such as robust fuel demand, better free cash flow, and stable fuel prices support the outlook.

• HPCL is Morgan Stanley’s top pick as it exits its investment cycle, followed by IOCL.

Brokerages On Tata Steel

JPMorgan

• JPMorgan maintained an ‘overweight’ rating on Tata Steel with a target price of Rs 180.

• Fourth quarter of fiscal 2025 earnings were largely in line, with a notable reduction in net debt.

• Fourth quarter is likely the bottom, and investor focus will be on management’s commentary.

• The first quarter of financial year 2026 outlook for European operations is expected to influence near-term stock performance.

Jefferies

• Jefferies also maintained a ‘buy’ rating on Tata Steel with a target price of Rs 180.

• Fourth quarter results were in line; standalone Ebitda per tonne rose 8% quarter-on-quarter to Rs 12,500.

• Net debt declined by 4% sequentially.

• Tata plans to inject up to $2.5 billion into its overseas subsidiary to support debt repayment, operations, and restructuring.

Brokerages On Hindalco

BofA

• BofA retained a ‘buy’ rating with a target price of Rs 725.

• Novelis delivered an in-line quarterly performance.

• Due to macro uncertainty, the company has refrained from providing near-term margin guidance.

• However, long-term guidance of $600 per tonne remains unchanged.

Citi

• Citi maintained a ‘buy’ rating on Hindalco with a target price of Rs 725.

• Novelis’ fourth quarter results were in line with expectations.

• Management remains non-committal on near-term margins due to macro uncertainty, but maintains long-term confidence.

• Hindalco’s short-term performance is expected to track movements in the LME and US tariff developments.

• The Indian business should benefit from lower alumina and coal costs, while Novelis could gain from improved scrap availability and profitability at Bay Minette.

BofA On PVR

• BofA maintained an ‘underperform’ rating on PVR, cutting the target price to Rs 945 from Rs 990.

• Fourth quarter revenue was in line, but Ebitda and profit missed estimates.

• While capital-light expansion improves cash flows, it may come at the cost of margins.

• The rise of direct-to-OTT releases remains a challenge, though no major screen closures are expected.

Jefferies On UPL

• Jefferies retained a ‘buy’ rating on UPL and increased the target price to Rs 810 from Rs 710.

• Fourth quarter of fiscal 2025 showed an operational beat, although exceptional losses impacted profit.

• Strong cash flows and reduced working capital have improved the balance sheet.

• The higher target reflects strong deleveraging, double-digit volume growth, and a positive business outlook.

Bernstein On SBI Cards

• Bernstein maintained an ‘underperform’ rating and raised the target price to Rs 690 from Rs 620.

• Although tailwinds are priced in, structural headwinds remain.

• The continued decline in the revolver-to-spends ratio weakens the earnings growth outlook.

• Bernstein’s EPS estimates for financial year 2026/27 are around 7% below consensus.

Goldman Sachs On Britannia

• Goldman Sachs maintained a ‘neutral’ rating on Britannia, raising the target price to Rs 5,650 from Rs 5,250.

• Growth acceleration is expected to continue into financial year 2026.

• Margins are likely to improve due to easing input costs on a sequential basis.

• Non-biscuit segments are growing faster than biscuits, but still fall short of expectations.

Jefferies On SRF

• Jefferies maintained an ‘underperform’ rating on SRF with a target price of Rs 2,060.

• The chemicals segment drove earnings beat, supported by strong demand for refrigerant gases.

• There was a sharp rise in specialty chemical exports in March, likely in anticipation of tariffs.

• Performance in packaging and technical textiles remained muted.

• A reduction in US tariffs on Chinese crop protection imports is viewed negatively, as it could reduce the cost competitiveness of Indian producers.

JPMorgan On LTIMindtree

• JPMorgan maintained an ‘overweight’ rating with a target price of Rs 5,200.

• A new large deal improves growth visibility and is expected to add 1% to financial year 2026 revenue.

• The deal should begin ramping up in first quarter, providing immediate support to growth.

• However, margins may face near-term pressure, as is common with large contracts.

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