HDFC Securities has released its updated brokerage outlook and share price targets for several prominent Indian stocks following their Q2 FY27 earnings reports. The financial services firm maintained 'BUY' ratings on Kotak Mahindra Bank, JSW Steel, Jindal Steel, and Nuvoco Vistas Corporation, while upgrading Shree Cement to 'BUY' from 'ADD'. Conversely, AU Small Finance Bank received a 'REDUCE' rating due to anticipated margin pressures.
Key Brokerage Calls and Price Targets
Kotak Mahindra Bank
For Kotak Mahindra Bank, HDFC Securities revised its sum-of-the-parts (SOTP)-based target price to Rs 480. The bank's Q2 FY27 earnings were in line with expectations, driven by improved volume growth and better asset quality. These positive factors partially offset net interest margin (NIM) compression. Loan growth stood at 25 percent year-on-year (YoY), with healthy growth of approximately 19 percent after adjusting for FCNR(B) deposits and transfers from KMIL. However, the brokerage highlighted sub-optimal capital deployment and a relatively low return on equity (RoE) of around 12 percent as ongoing concerns.
JSW Steel
HDFC Securities maintained an unchanged target price of Rs 1,410 for JSW Steel. The company reported a 13 percent YoY like-for-like consolidated volume growth in Q2 FY27, excluding assets from Bhushan Power & Steel Ltd (BPSL). Despite this, margins contracted by Rs 1,400 per tonne sequentially to Rs 13,600 per tonne, attributed to lower realizations and increased coking coal prices. The brokerage anticipates that steel price increases and efficiency gains will help support margins, with JSW Steel reiterating its FY27 volume growth guidance of 8 percent on a like-for-like basis.
Jindal Steel
The target price for Jindal Steel was also kept unchanged at Rs 1,210 by HDFC Securities. The firm observed a 27 percent YoY increase in volumes, supported by capacity expansion. However, unit EBITDA declined by about Rs 1,100 per tonne quarter-on-quarter to Rs 10,800 per tonne, primarily due to higher operating and freight costs. HDFC Securities expects firmer steel prices, an improved product mix, and cost optimization initiatives to facilitate margin recovery. The commissioning of a slurry pipeline is projected to reduce operating costs by approximately Rs 500 per tonne starting from Q3 FY27.
Shree Cement
Shree Cement saw an upgrade in rating from 'ADD' to 'BUY' by HDFC Securities, with a raised target price of Rs 28,400. This upgrade was supported by strong volume growth, healthy margins, and the stock's recent price correction. Standalone volumes for Q2 FY27 increased by 18 percent YoY, while consolidated volumes rose by 14 percent.
Nuvoco Vistas
For Nuvoco Vistas, HDFC Securities maintained its target price at Rs 445. While volumes grew 9 percent YoY, unit EBITDA experienced a sequential decline to Rs 871 per tonne. The brokerage expects recent increases in cement prices to help offset rising input costs and bolster margins in the near term.
AU Small Finance Bank
HDFC Securities maintained its 'REDUCE' rating on AU Small Finance Bank, revising its target price to Rs 900. Although the bank's earnings surpassed estimates, the brokerage predicts that margins will continue to face pressure due to a changing loan mix. The bank reported robust loan and deposit growth of 28 percent and 29 percent, respectively.
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.