Why Did Elara Upgrade Punjab National Bank’s Target to ₹122 While Staying Cautious?

Elara’s report emphasizes that PNB’s balance sheet strength continues to improve, with a focus on low-risk lending and better provisioning coverage. However, the pace of loan growth and margin expansion remains modest compared to private peers. The brokerage believes the current valuation fairly reflects the ongoing turnaround, warranting a neutral-to-positive outlook.

According to the brokerage, the bank’s core performance remains steady with improving profitability, driven by lower slippages and healthy recoveries. Net Interest Margins (NIMs) remain stable, though they could face mild pressure due to rising competition for retail deposits. The key monitorable remains the bank’s ability to sustain growth without compromising credit quality.

Elara expects the bank to maintain earnings momentum with support from recoveries and better operational efficiency. However, it warned that sluggish growth in high-margin segments could cap overall valuation upside unless loan growth accelerates meaningfully in FY27.

Despite structural challenges, Elara believes that PNB’s improved balance sheet and steady operating metrics make it a relatively safe bet among PSU banks for investors with moderate risk appetite. Long-term recovery prospects hinge on consistent growth and digital adoption in the retail and SME segments.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

Why Are Global Brokerages Maintaining a Positive Outlook on ICICI Bank?

Jefferies believes that ICICI Bank’s core fundamentals remain robust, underpinned by better Net Interest Margins (NIMs), high-quality assets, and steady operating leverage. The brokerage emphasized that clarity on the next CEO’s term would provide comfort to long-term investors, while consistent performance across core segments reinforces confidence in management’s strategy.

HSBC echoed a similar positive stance, maintaining a Buy rating with a target price of ₹1,680. The brokerage noted that ICICI’s operating performance outperformed expectations, aided by stronger-than-estimated NIMs, better fee income, and lower credit costs. HSBC expects premium valuations to sustain due to consistent return ratios and prudent balance sheet management.

Meanwhile, CLSA retained an Outperform rating with a target price of ₹1,700, citing a 4% PPOP and 10% PAT beat versus estimates. However, it flagged that overall loan growth continues to moderate and remains driven mainly by business banking. CLSA also noted that while NIMs improved by 3 bps QoQ, management is not guiding for further improvement in the second half, suggesting stability rather than expansion in margin trajectory.

Brokerages agree that while ICICI Bank’s Q2FY26 wasn’t a “blowout” quarter, it reinforced the stability theme investors seek in large private lenders. Loan growth moderation is being offset by disciplined cost control and robust fee generation. Digital penetration continues to scale up, contributing to higher operational efficiency and customer retention.

With asset quality remaining strong and NIMs steady, ICICI Bank continues to be one of the most stable performers among private lenders. Brokerages believe that as the credit cycle matures, ICICI’s profitability and valuation premium are likely to sustain through FY26–FY27.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

Why Did Elara Raise AU Small Finance Bank’s Target but Retain a Cautious Stance?

According to Elara, AU SFB’s growth continues to be impressive, supported by strong disbursement momentum and stable Net Interest Margins (NIMs). However, the firm pointed out that valuation multiples remain elevated compared to peers, warranting a conservative stance. The brokerage also noted that the bank’s asset quality beat expectations this quarter, but the key focus ahead will be sustaining credit quality amid an expanding loan book.

Elara’s analysis suggests that while the Q2FY26 performance was encouraging, investors should remain mindful of the bank’s funding costs, competition in retail deposits, and credit cost normalization trends. The report also emphasized that AU’s NIM trajectory remains steady, supported by robust lending yields and better cost management.

The brokerage also highlighted that AU’s digital initiatives and expansion in semi-urban markets continue to support deposit mobilization. However, given rising competition in small finance banking, maintaining growth without pressuring margins will be a key balancing act in FY26 and FY27.

Overall, while Elara recognizes AU Small Finance Bank’s operational excellence, it believes that valuations fully reflect the growth potential at this stage. Investors are advised to watch for sustainability of asset quality and the impact of competitive pressures on cost of funds.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

What Are Brokerages Saying About L&T Technology Services’ Growth Outlook?

According to the brokerage, LTTS has demonstrated consistent performance across segments like transportation, industrial products, and plant engineering, though telecom and mobility verticals showed weakness. Morgan Stanley believes LTTS’s deal pipeline remains healthy, but revenue realization timelines need to improve to deliver double-digit growth in FY26.

Meanwhile, HSBC has maintained a Hold rating on the stock, setting a target price of ₹4,695. The brokerage noted that 2Q growth was weak but largely in line with estimates. It expects the second half of FY26 to show better traction, though achieving double-digit revenue growth for the year may still be challenging. HSBC also highlighted that LTTS’s strong momentum in sustainability and energy-efficient engineering continues to act as a long-term driver.

LTTS continues to focus on high-value engineering domains such as digital manufacturing, sustainability, and autonomous systems. The company’s ability to translate its growing deal wins into executable revenue streams will determine the pace of recovery in FY26–FY27. Both brokerages expect improvement in H2FY26 margins as utilization stabilizes and wage costs normalize.

Despite near-term challenges, LTTS’s strong client base, deep engineering expertise, and leadership in sustainability-focused R&D position it well for structural growth once global spending improves. Investors are advised to stay patient as the company transitions from order inflows to revenue realization.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

Why Does Morgan Stanley See a Margin Recovery Ahead for JSW Steel?

According to the report, the quarter likely marks the trough of operating margins for JSW Steel, with steel prices expected to rise in the coming months. The brokerage added that cost pressures have largely peaked, and as global demand revives—especially from infrastructure and construction—the domestic pricing environment could improve steadily through FY26.

The brokerage observed that JSW Steel’s domestic operations remain resilient despite the global slowdown in commodity cycles. While input costs were higher than expected, operating efficiency and raw material cost management helped maintain profitability levels. With improving steel spreads and expected price hikes in Q3, the company is positioned for sequential EBITDA recovery.

Analysts highlight that the company’s long-term fundamentals remain strong with continued investment in brownfield expansion, backward integration in raw materials, and enhanced cost control measures. These initiatives are expected to improve competitiveness and margin profile in FY27 and beyond.

While global steel dynamics remain uncertain, India’s infrastructure demand, manufacturing push, and strong domestic consumption are likely to shield JSW from the cyclical downturn seen elsewhere. The company’s ongoing projects and deleveraging efforts continue to reinforce its leadership position.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

Why Are Global Brokerages Turning Cautiously Optimistic on Reliance Industries?

RIL’s retail vertical remains the key driver of optimism, growing 22% YoY with broad-based momentum across digital and offline formats. Jefferies believes this growth momentum will sustain into Q3FY26, alleviating investor concerns around discretionary slowdown. The brokerage reiterated its Buy rating with a revised target price of ₹1,780, slightly lower than its earlier ₹1,785, citing modest adjustments in telecom projections.

Brokerages noted that Jio’s revenue missed expectations marginally, but its EBITDA remained in line thanks to strong traction in the home broadband segment. Morgan Stanley emphasized that Reliance’s operating metrics remain solid, maintaining an Overweight stance with a target price of ₹1,701. Nomura and Motilal Oswal also reiterated their Buy calls, highlighting steady operating leverage and improved cash flow visibility.

Despite global volatility, Reliance remains among the most preferred large-cap picks across brokerages, supported by diversified business streams and steady earnings visibility. Analysts expect further clarity on demergers and capital structure moves to act as medium-term triggers for rerating.

With the retail and energy arms maintaining strong momentum and Jio stabilizing, the company appears well-positioned to deliver steady growth across segments. Long-term investors could see meaningful value creation once digital and renewable assets are fully monetized.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.