8 hours Ago By HDFC Securities Institutional Equities
Axis Bank Ltd.’s Q4 FY25 earnings beat our estimates on the back of lower credit costs benefitting from write-back of security receipts and recoveries in its wholesale portfolio, offset by lower-than-industry growth on both sides of the balance sheet. Axis Bank witnessed first signs of portfolio stability although delinquencies continue to remain elevated compared to its larger peers.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. HDFC Securities Institutional EquitiesHUL - Volume growth is the key focus Hindustan Unilever Ltd.
’s Q4 FY25 results were broadly in line with our estimates. Volume grew 2% vs our expectation of 0-1% owing to a greater focus on volume growth via price corrections. Home care and beauty and well-being drove the growth while personal care and F&R disappointed.
We maintain our Add rating on HUL with a target price of Rs 2,500/share (50x its FY27 standalone EPS, 10% discount to 5-yr average PE), with revenue/Ebitda/PAT CAGRs of 6/7/7% for FY25-FY28. In the near term, profitability growth remains challenging due to:macro challenges in urban, moderating premiumization trends; persistent inflation in tea prices; andcompetitive intensity in the beauty and well-being segment. Additionally, HUL has cut its Ebitda margin guidance from 23-24% to 22-23%, citing increased investments in long term growth levers with a stronger emphasis on the beauty and well-being segment.
Axis Bank - First sign of portfolio stability; deposit handicap persists Axis Bank Ltd.’s Q4 FY25 earnings beat our estimates on the back of lower credit costs benefitting from write-back of security receipts and recoveries in its wholesale portfolio, offset by lower-than-industry growth on both sides of the balance sheet. Axis Bank witnessed first signs of portfolio stability although delinquencies continue to remain elevated compared to its larger peers.
Deposit growth (~10% YoY/7% QoQ) continued to be below industry levels, offset by an uptick in CASA ratio to 40.8% (+127bps QoQ) driven by seasonality in current accounts. The loan-to-deposit ratio improved ~400bps QoQ to 88.
7% on the back of soft loan growth (+2.6% QoQ). While Axis Bank continues to gradually improve its quality of deposit franchise and tighten its provisioning norms, we believe the journey is only half-done.
We moderate our loan growth forecasts and build in 13bps NIM compression for FY26E, factoring in a deeper rate cut cycle, offset by moderate normalisation in credit costs. We maintain Add with a revised target price of Rs 1,310 (standalone bank at 1.7x Mar-27 adjusted book value per share).
Nestle - Volume-led recovery Nestle India Ltd.’s Q4 FY25 results were marginally ahead of our expectations, surprising us on the profitability front. The company reported 2% volume growth, in line with our expectation of 1-2%.
Domestic volume growth was broad-based across all segments except milk and infant nutrition. However, Nestle surprised us in profitability, due to a one-off spike in other operating income (327% YoY growth), attributable to government incentives received in the quarter. We maintain our Add rating on Nestle with a taget price of Rs 2,450/sh (60x its FY27 consolidated EPS, in line with its 5-yr average PE), with revenue/Ebitda/PAT CAGRs of 9/12/14% for FY25-FY28.
In our view, growth will be driven via-ramping up of the rural distribution,focus on growth in the out-of-home channel;prioritizing of new product development salience and category creation efforts;investments in capacity expansion (capex plan of Rs 65 billion over CY20-25).Click on the attachment to read the full report:HUL Q4 Results Review: Systematix Remains Cautious On The Stock; Cuts Target Price, Maintaining 'Hold'DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way.
The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.. Read more on Research Reports by NDTV Profit.
.
