Latest news with #YesSecurities
Mint
5 days ago
- Business
- Mint
SBI expected to report tepid Q1 earnings on net interest margin pressure
Mumbai: State Bank of India, the country's largest lender, is expected to report muted earnings in the first quarter of FY26 as continued pressure on net interest margins (NIM) weighs on overall sector performance amid lower margin compression and potential treasury gains. The bank is scheduled to declare results on Friday. SBI's net profit in the June quarter was pegged at ₹16,975 crore, according to Bloomberg consensus estimates of 24 analysts. The lender earned ₹17,035 crore in Q1 of FY25. 'We expect operating profit to decline around 8% YoY (year-on-year) as we build NIM compression in the first quarter of FY26," Kotak Institutional Equities said in a report on 6 July. 'We are building flat NII (net interest income) decline despite 11% YoY loan growth due to higher cost of funds and pass-through of recent rate cuts. Lower staff costs and higher contribution from treasury income are supporting operating income." According to Motilal Oswal, public sector banks including SBI are likely to report modest year-on-year profit growth in the June quarter, driven by lower margins and a rise in provisions. Like its peers, SBI's NII is expected to remain little changed, while treasury gains could perform better due to the sharp drop in the G-Sec yield during the quarter. The bank's asset quality is expected to be stable, supported by contained slippages and a healthy provision coverage ratio. In Q4 of FY25, SBI's gross non-performing asset ratio — aggregate bad loans as a percentage of total advances — stood at 1.82%, 42 basis points lower than a year earlier. Loan growth Analysts expect tepid loan growth at the state-owned lender. Sequential loan growth is estimated at below 2.5%, according to a Yes Securities report on 4 July. Compared to private peers, public sector banks including SBI may fare better on earnings, supported by relatively stable margins and lower provisions, following the additional buffers built in Q4 FY25, Yes Securities said. Loan growth at public sector Punjab National Bank and Bank of Baroda stood at 9.6% and 12.4% y-o-y, respectively, in the June quarter. Large private lenders HDFC Bank and ICICI Bank posted sluggish loan growth and narrowing margins in the June quarter, reflecting growing pressure on profitability, following the Reserve Bank of India's recent repo rate cuts. Both lenders recorded a decline in NIM in Q1 as borrowing rates adjusted faster than deposit rates after the rate cut. SBI will be able to maintain return on assets at 1%, chairman C S Shetty said on a call with analysts on 3 May. He said the outlook for NIM would depend on the pace and depth of future rate cuts. Shetty said that the adjustment in loans linked to the marginal cost of funds-based lending rate — an internal benchmark — would require a drop in the incremental cost of deposits. 'We will ensure that the readjustment of interest rates and the deposits are aligned at least broadly, with the reported cards, so that the margin protection is there," Shetty said.
Mint
31-07-2025
- Business
- Mint
Goldman Sachs, Motilal Oswal, others give ‘buy' rating to THIS mutual fund, FIIs' favourite stock
Global brokerage giant Goldman Sachs, along with Motilal Oswal and Yes Securities, recommends buying the shares of mutual funds and foreign investors-backed insurance firms Star Health and Allied Insurance Company Ltd. In its latest report, Goldman Sachs highlighted that it expects a 17.2% upside for the Star Health shares, citing the 4% YoY growth in its gross written premium (GWP) due to the company's combination of value and volumes in the April-June quarter. 'We lower our FY26-28E EPS estimates by up to 18% to factor in Q1 results, relatively gradual combined ratio improvement and revised outlook for the business over the medium term, and we maintain our 'Buy' rating on the stock,' said Goldman, highlighting that there remains room for improvement of the loss ratio trends hereon. Motilal Oswal, in its report, cited the 12% YoY rise in the net interest premiums of Star Health to ₹ 3,940 crore in the first quarter of FY2025-26. 'STARHEAL's pricing actions, underwriting strategy, and reducing pressure from claim frequency and severity will drive an improvement in the company's loss ratio trajectory in the coming quarters,' said Motilal Oswal, targeting an upside of 16% for the stock. Yes Securities expects the shares of the private insurance company to rise in the upcoming months. The brokerage firm also said that the second-quarter claims are expected to be higher, but the price hikes taken earlier will also play out in the upcoming quarter for the insurance company. 'The company has taken price corrections (hikes), altered underwriting strategies, recalibrated business and also exited some, all of which will flow through over a period of time, leading to improvement in loss ratio,' they said in the stock report. Loss ratio is the equation between the total premiums earned and actual losses incurred over a given period of time. Foreign Investors, including Foreign Direct Investments (FDIs), Foreign Portfolio Investors (FPIs), and other Foreign Institutional Investors (FIIs), hold a total of 13.76% stake in Star Health, as per the official public shareholding data. Massachusetts Institute of Technology, with a 1.64% stake, Mio Star, with 1.14%, Government Pension Fund Global, with 2.38%, and Theleme India Master Fund Ltd, with 1.53%, were among the prominent foreign investors. Other foreign stakeholders were FDIs at 3.06%, FPIs at 10.49% and 0.20%, as per the official data. ICICI Prudential Banking and Financial Services, HDFC Mutual Fund, and SBI Mutual Fund are the mutual funds that currently hold stake in the company. Goldman Sachs' Target: ₹ 500 (17.2% in a 12-month period); Buy at CMP or ₹ 426.70. Motilal Oswal Target: ₹ 520 (16% upside); Buy at CMP or ₹ 448. Yes Securities Target: ₹ 540; Buy at CMP. Star Health and Allied Insurance Company shares closed 0.76% lower at ₹ 444.50 after Thursday's stock market session, compared to ₹ 447.90 at the previous stock market session. The private sector insurer's shares have lost 50.92% since it was listed on the Indian stock market in December 2021. In the last one-year period, Star Health shares have dropped 26.57%. On a year-to-date (YTD) basis, the stock has lost 7.54% in 2025. However, the company shares have gained 5.29% in the last one-month period and are trading 4.17% higher in the last five market sessions on the Indian markets. Star Health's share price hit its 52-week high level at ₹ 647.65 on 9 September 2024, while the 52-week low level was at ₹ 330.05 on 7 April 2025, according to the data collected from the BSE website. The company's market capitalisation (M-Cap) stood at ₹ 26,179.66 crore as of the stock market close on Thursday, 31 July 2025. Read all stories by Anubhav Mukherjee Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Mint
23-07-2025
- Business
- Mint
Dixon preps for life after PLI, fearing hit to margins
Dixon Technologies (India) Ltd has signed a slew of joint venture (JV) and partnership agreements of late. It was recently in the spotlight for its acquisition of Kunshan Q Tech Microelectronics (India) and a JV with Chinese company Chongqing Yuhai Precision Manufacturing, which should enhance its backward-integration initiatives. With the government's production-linked incentive (PLI) scheme set to end in FY26, competitive intensity in the sector is slated to rise. These partnerships are expected to strengthen Dixon's customer relations and improve revenue visibility. But more importantly, they should shield operating margin, which is expected to come under pressure from the first half of FY27. Mixed results Against this backdrop, Dixon's June quarter earnings (Q1FY26) have given investors mixed feelings. Consolidated revenue rose 95% year-on-year to ₹12,838 crore, beating estimates. This was led by the mobile segment, were revenue jumped 125%, buoyed by volume ramp-up and new client additions. However, revenue growth in other segments of home appliances, lighting and consumer electronics was unimpressive. Consolidated Ebitda grew 95% year-on-year, but the overall Ebitda margin was flat year-on-year at 3.8% and down sequentially. Over the medium term, Dixon is targeting a 130-150 basis points Ebitda margin expansion in the mobile segment through scale benefits and integration-led cost savings. Smartphones remain central to Dixon's growth strategy. In Q1FY26 the company shipped 9.6 million smartphones and 5.73 million feature phones, and aims for 11-12 million smartphones in Q2. For FY26, guidance stands at 40-42 million units. With capacity at 60 million units and an addressable market of 100 million (excluding Apple, Samsung and in-house volumes by Oppo and Vivo), Dixon is scaling quickly. A new deal with NxtCell India will add Alcatel-branded phones, and Vivo's pending approval could lift capacity to 80 million units. The potential JV with Longcheer, whose 25-million-unit customer base in India offers Dixon a steady growth lever beyond the PLI scheme. Also, value addition in mobile manufacturing, currently at 15-17%, is expected to rise to 35-40% over two years, supported by JVs in display (HKC), camera modules (Q Tech), and precision parts (Chongqing Yuhai). This should also aid medium-term margin growth. No quick fix That said, the benefits of backward-integration measures will only come gradually. In a report dated 22 July, Yes Securities said that since Dixon now expects its JV with Vivo to materialise from Q4FY26, the full impact of the partnership will only be visible in FY27. Note that Dixon's management is confident of strong volume growth in mobile phones on sustained demand momentum and and the Vivo JV, so timing of the JV is critical. Yes Securities has 'reduce' rating on the stock; it feels the positives are priced in, making the risk-reward equation unfavourable. Over the past year, Dixon stock has rallied 50% compared to the Nifty 50's 3% return. The stock trades at a rich 60 times estimated FY26 earnings, as per Bloomberg data. This leaves no room for disappointment on any front. Amid this, Dixon is executing a ₹1,100-crore capex plan in FY26, of which ₹750 crore has been earmarked for component manufacturing, including the JVs. The rest will be used for capacity expansion, including a Noida plant for Vivo and a display JV set to produce two million mobile and laptop screens each per month. 'Dixon has a major capex ramp-up plan, which requires significant production mandate from local/global markets and efficient execution. This is coupled with certain demand expectations, and if that demand does not pan out, then it can pose downside risks," said a Nuvama Research report dated 22 July. Nuvama also warned about uncertainty on the timing for approvals for its joint ventures, most of which are with Chinese companies.
Economic Times
23-07-2025
- Business
- Economic Times
MRPL shares rally over 6%; YES Securities sees better Q2 on improving refining margins
Shares of Mangalore Refinery and Petrochemicals Ltd (MRPL) climbed as much as 6.4% on Wednesday to Rs 154 on the BSE, lifting their two-day rally to 10.6%, as investor sentiment improved on expectations of a recovery in earnings and a more supportive margin environment. ADVERTISEMENT MRPL's gains pushed its market capitalisation to Rs 26,709.61 crore. Despite the recent uptrend, the stock remains 31.5% below its 52-week high of Rs 224.80, touched in July 2024, though it has rebounded 55.6% from the 52-week low of Rs 98.95 recorded in March 2025. Brokerage Yes Securities retained its 'buy' rating on the stock following the company's first-quarter results last week, raising its price target to Rs 180 from Rs 160. The new target implies a valuation of 1.9 times FY27 estimated price-to-book value. MRPL had reported a consolidated net loss of Rs 271.97 crore for the quarter ended June 2025 (Q1FY26), reversing from a net profit of Rs 73.22 crore in the same period last year. Revenue from operations fell to Rs 20,988.03 crore from Rs 27,289.40 crore Securities attributed the earnings weakness to extended shutdowns and inventory losses. The company's gross refining margin (GRM) came in at $3.88 per barrel for the quarter, significantly below the brokerage's forecast of $7.3 per barrel. In comparison, MRPL had reported GRMs of $6.23 per barrel in the previous quarter and $4.70 per barrel a year underperformance was linked to a 45-day Phase-II shutdown—longer than anticipated—driven by severe rainfall, as well as lower plant utilisation and limited feedstock availability that hit product exports. ADVERTISEMENT Looking ahead, Yes Securities said the company is positioned to benefit from an uptick in refining spreads in the second quarter, supported by elevated diesel cracks and geopolitical risk premiums on crude following the Israel–Iran conflict. With Brent crude averaging around $70 per barrel, the brokerage expects near-term GRMs to remain firm in the first half of FY26. The brokerage also highlighted MRPL's advantageous crude sourcing mix, with over a third of its supply sourced from Russia at discounted rates, helping it maintain some of the highest GRMs among single-location Indian refiners. ADVERTISEMENT Over a three-year horizon, Yes Securities sees earnings quality improving as MRPL moves further into petrochemicals and retailing, while capitalising on integrated operations and upcoming pipeline infrastructure. Demand for value-added products is projected to outpace fuel demand, with the company targeting stable leverage despite elevated capex levels. MRPL's net debt-to-equity currently stands at 0.99x, with debt at Rs 13,230 crore. A potential merger with Hindustan Petroleum Corporation Ltd (HPCL), while speculated in the past, remains unlikely in the near term, the brokerage said. Any such move would depend on the promoters, ONGC and HPCL, and may be deferred beyond FY27 due to tax-loss carryforwards from the OMPL merger. ADVERTISEMENT Also read | Aditya Birla Real Estate shares down 32% from peak. Can the stock reclaim Rs 2,400 post Q1 results? (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
23-07-2025
- Business
- Time of India
MRPL shares rally over 6%; YES Securities sees better Q2 on improving refining margins
Shares of Mangalore Refinery and Petrochemicals Ltd ( MRPL ) climbed as much as 6.4% on Wednesday to Rs 154 on the BSE, lifting their two-day rally to 10.6%, as investor sentiment improved on expectations of a recovery in earnings and a more supportive margin environment. MRPL's gains pushed its market capitalisation to Rs 26,709.61 crore. Despite the recent uptrend, the stock remains 31.5% below its 52-week high of Rs 224.80, touched in July 2024, though it has rebounded 55.6% from the 52-week low of Rs 98.95 recorded in March 2025. Explore courses from Top Institutes in Please select course: Select a Course Category Design Thinking others Degree Artificial Intelligence Finance healthcare Others MCA Product Management Public Policy Healthcare Project Management Data Science PGDM Technology Operations Management CXO Management Data Science Cybersecurity Leadership Data Analytics MBA Digital Marketing Skills you'll gain: Duration: 22 Weeks IIM Indore CERT-IIMI DTAI Async India Starts on undefined Get Details Skills you'll gain: Duration: 25 Weeks IIM Kozhikode CERT-IIMK PCP DTIM Async India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Cat Keeps Hugging Friend Before Going To The Vet – The Vet Paled When He Saw Them Tips and Tricks Brokerage Yes Securities retained its 'buy' rating on the stock following the company's first-quarter results last week, raising its price target to Rs 180 from Rs 160. The new target implies a valuation of 1.9 times FY27 estimated price-to-book value. Q1 earnings weighed by shutdowns MRPL had reported a consolidated net loss of Rs 271.97 crore for the quarter ended June 2025 (Q1FY26), reversing from a net profit of Rs 73.22 crore in the same period last year. Revenue from operations fell to Rs 20,988.03 crore from Rs 27,289.40 crore year-on-year. Yes Securities attributed the earnings weakness to extended shutdowns and inventory losses. The company's gross refining margin (GRM) came in at $3.88 per barrel for the quarter, significantly below the brokerage's forecast of $7.3 per barrel. In comparison, MRPL had reported GRMs of $6.23 per barrel in the previous quarter and $4.70 per barrel a year ago. Live Events The underperformance was linked to a 45-day Phase-II shutdown—longer than anticipated—driven by severe rainfall, as well as lower plant utilisation and limited feedstock availability that hit product exports. Q2 outlook better Looking ahead, Yes Securities said the company is positioned to benefit from an uptick in refining spreads in the second quarter, supported by elevated diesel cracks and geopolitical risk premiums on crude following the Israel–Iran conflict. With Brent crude averaging around $70 per barrel, the brokerage expects near-term GRMs to remain firm in the first half of FY26. The brokerage also highlighted MRPL's advantageous crude sourcing mix, with over a third of its supply sourced from Russia at discounted rates, helping it maintain some of the highest GRMs among single-location Indian refiners. Longer-term growth and merger outlook Over a three-year horizon, Yes Securities sees earnings quality improving as MRPL moves further into petrochemicals and retailing, while capitalising on integrated operations and upcoming pipeline infrastructure. Demand for value-added products is projected to outpace fuel demand, with the company targeting stable leverage despite elevated capex levels. MRPL's net debt-to-equity currently stands at 0.99x, with debt at Rs 13,230 crore. A potential merger with Hindustan Petroleum Corporation Ltd (HPCL), while speculated in the past, remains unlikely in the near term, the brokerage said. Any such move would depend on the promoters, ONGC and HPCL, and may be deferred beyond FY27 due to tax-loss carryforwards from the OMPL merger. Also read | Aditya Birla Real Estate shares down 32% from peak. Can the stock reclaim Rs 2,400 post Q1 results?
