Mumbai, May 19, 2025 – Leading global fund houses have issued a flurry of stock recommendations, spotlighting strong growth potential in Indian companies like Hindustan Aeronautics Limited (HAL), Kaynes Technology, and Hyundai Motor India, while expressing caution on Credit Access Grameen and Divis Laboratories. The updates, released today, reflect a mix of optimism and tempered expectations amid a dynamic market environment.
HAL Rides High on Upbeat Forecasts
Jefferies maintained its "Buy" rating on HAL, raising its target price to ₹6,475 from ₹4,715, citing a robust Q4 performance where EBITDA margins surged to 38.7%, beating estimates by 765 basis points. The brokerage highlighted HAL’s focus on cost optimization and sustainable 30-31% margins, with 8-10% revenue growth guidance for FY26 seen as conservative. JP Morgan echoed the bullish sentiment, retaining an "Overweight" rating with a ₹6,105 target, driven by strong order outlooks. However, Morgan Stanley downgraded HAL to "Equal Weight" with a ₹5,092 target, noting balanced risk-reward despite solid margins, as muted execution guidance tempers expectations.
Kaynes Technology Gains Traction
Jefferies upgraded its target price for Kaynes Technology to ₹7,660 from ₹6,660, maintaining a "Buy" rating on the back of strong growth in electronics manufacturing. Conversely, Morgan Stanley downgraded Kaynes to "Equal Weight" and slashed its target to ₹6,155, citing valuation concerns after a sharp rally, signaling a potential pause in momentum.
Hyundai Motor India Sees Broad Support
Hyundai Motor India garnered positive outlooks from multiple brokerages. Nomura raised its "Buy" target to ₹2,291, while CLSA and Macquarie maintained "Outperform" ratings with targets of ₹2,155 and ₹2,100, respectively, buoyed by strong volume outlooks. JP Morgan kept an "Overweight" stance at ₹2,060, but Bank of America took a more cautious "Underperform" view, lifting its target to ₹1,850, reflecting neutral sentiment on near-term challenges.
Divis Laboratories: Mixed Signals
Divis Laboratories received varied recommendations. Morgan Stanley and Nuvama were optimistic, with "Overweight" and "Buy" ratings at ₹7,185 and ₹7,225, respectively, following a 26% year-on-year Q4 profit surge and 12% revenue growth. Jefferies, however, maintained a "Hold" at ₹6,200, citing balanced growth prospects amid competitive pressures.
NCC and BHEL Shine in Infrastructure
CLSA maintained an "Outperform" rating on NCC with a ₹315 target, driven by steady execution in construction projects. For Bharat Heavy Electricals Limited (BHEL), CLSA highlighted a resurgence in fossil fuel orders, with thermal business orders peaking at 26.6GW in FY25, fueled by India’s energy security focus, signaling a bright spot for the company.
Credit Access Grameen Faces Divergent Views
Nomura upgraded Credit Access Grameen to "Neutral" with a ₹1,090 target, acknowledging improved fundamentals. However, CLSA downgraded it to "Underperform" at ₹1,050, and Goldman Sachs retained a "Sell" rating with a ₹700 target, pointing to concerns over credit costs and slower growth in the microfinance sector.
Market Context
The NSE Nifty index closed marginally lower at 25,019.8 on May 16, down 42.3 points, while the BSE Sensex fell 200.15 points to 82,330.59. Despite the dip, sectors like defense and infrastructure, represented by HAL, NCC, and BHEL, remained active, with HAL among the most traded stocks at ₹3,422.20 crore in value. Investor sentiment on X reflected optimism for HAL’s margin performance, though caution persisted for stocks like Credit Access due to sector-specific headwinds.
As India’s market navigates global uncertainties and domestic growth opportunities, these recommendations underscore a selective approach, with fund houses favoring companies with strong fundamentals while remaining wary of overvalued or challenged sectors.
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