In a recent development, CLSA, a leading financial research firm, has issued bullish recommendations for the shares of State Bank of India (SBI), Zomato, and Titan Company, following their robust performance in the second quarter. These upgrades, despite challenges faced by SBI, are reflective of the continued potential in these companies.
State Bank of India (SBI)
Despite encountering challenges in the current and savings account (CASA) segment and an unexpected net interest margin (NIM) moderation, SBI has received a vote of confidence from CLSA. The financial giant has set a target price of ₹700 for SBI shares, considering the high base retail loan growth. This demonstrates a strong belief in the bank’s ability to weather these headwinds and continue to deliver value to investors.
Zomato
Zomato’s rating has been upgraded from ‘Outperform’ to ‘Buy,’ and the target price has been raised from ₹120 to ₹168 (USD1 = INR83.208). This upgrade is underpinned by several positive factors, including the growing viability of quick commerce, the acceleration of its Grocery Order Value (GOV), an increase in monthly transacting customers, and higher usage frequency. Additionally, the prediction of Blinkit, a quick commerce platform, turning profitable has bolstered the confidence in Zomato’s growth potential.
Titan Company
Titan Company, a renowned player in the luxury and international markets, has also received a favorable upgrade from CLSA. The target price for Titan shares has been raised from ₹3540 to ₹3948. This adjustment is attributed to the company’s strategic expansion plans, which have significantly increased its addressable market. However, it’s worth noting that this expansion has come at the expense of lower year-on-year basis margins.
InterGlobe Aviation
In parallel, BofA Securities has reiterated its ‘Buy’ recommendation for InterGlobe Aviation, with an increased target price from ₹2600 to ₹2700. This revision follows a strong Q2 performance, with one-off reversals and compensations contributing to a profit after tax (PAT) beat. It’s worth mentioning that, despite this positive performance, the airline will need to closely monitor the additional cost burden of higher wet lease costs.
These recommendations from respected financial analysts indicate their confidence in the future prospects of these companies, considering their strong Q2 results. Investors are advised to keep a close watch on these stocks as they continue to evolve in the dynamic market landscape.
