Downgrades

We believe that the merger synergies for HDFC Bank are yet to play out, which will drive further improvement in operating leverage and increased profitability, due to which we have increased the Adj. P/B multiple to 2.4x.

HCLT’s FY26 revenue organic guidance of 1–4% YoY CC appears optimistic at its upper end, implying -0.6% to 0.9% organic CQGR. It is supported by an exit growth rate of 1.6%. Management mentioned that it did not see any project deferral or rampdown due to tariff-related uncertainties in Q4FY25.

MMFS logged muted growth/profitability in Q4FY25, with key numbers largely in line with our estimate; but PPoP and PAT were ~5% lower than consensus estimates. Despite the management’s persistent efforts and initiatives in recent years toward diversifying away from the wheels business, MMFS remained dominated by wheels – around 93% (PVs: ~40%).

AU SFB continues to grow its credit portfolio at a healthy pace, defying industry trend and the declining MFI/Card book. However, higher CoF and interest reversal on MFI/Card NPAs has led to continued margin correction (10bps QoQ).

Q4 Revenue grew 20% YoY/34% QoQ, driven by strong performances in Lloyd (+39% YoY) and C&W (+21% YoY)

4QFY25 was peer beating. FY26 revenue guide assumes flattish CQGR at lower end; does not square up against the cautious commentary

India volume at 18,409 MT was down by 17.1% yoy & 44.4% qoq. Realization at ~Rs.86,995/ MT down by 2.0% yoy & 50.8% qoq. The capacity utilization levels for the expanded capacity stood at ~72.2%.

HCLTech reported revenue of $3,498 million, down 1% q-o-q/ up 2% y-o-y missing our estimates of $3,502 million in constant currency (CC) terms. Revenue in rupee terms stood at Rs. 30,246 crore, up 1.2% q-o-q/6.1% y-o-y.

HCL Technologies (HCLT) reported 4QFY25 revenue of USD3.4b, down 0.8% QoQ and 2.9% YoY in constant currency (CC) vs. our estimate of 0.6% QoQ decline. EBIT margins came in at 18% vs. our estimate of 17.6%.

Mahindra & Mahindra Financial’s (MMFS) 4QFY25 PAT declined ~9% YoY to ~INR5.63b (in line), while FY25 PAT grew ~33% YoY to INR23.4b. NII in 4QFY25 stood at INR19.3b (in line) and grew ~6% YoY.

Cyient DLM’s (CYIENTDL) 4QFY25 consolidated revenue/EBITDA grew ~18%/51% YoY. EBITDA margins surpassed our estimates, expanding 290bp YoY, led by a favorable product mix, operational efficiencies, and one-offs (~250bp).

Air express logistics companies benefit significantly from a reduction in the prices of aviation turbine fuel (ATF) as ATF costs account for 35-45% of their total operating costs. ATF price declined 6% MoM (-12% YoY) in Apr’25 to INR83,575/kl.

Mahindra Logistics (MLL)’s revenue grew ~8% YoY to INR15.7b in 4QFY25, in line with our estimate. EBITDA margin came in at 5% (+110bp YoY and +30bp QoQ) vs. our estimate of 4.7%. EBITDA rose ~37% YoY to INR777m (in line).

We value Tata Elxi at a lower P/E multiple of 30x (earlier 33x) implying a target price of INR 5,093. That said, recent large multi year deal wins, coupled with TELX’s strategic pivot toward OEM centric engagements and Software Defined Vehicle (SDV) programs, are expected to provide revenue stability.

We have reduced our EPS estimates for FY26E and FY27E to INR 128.3 and INR 144.7 respectively, factoring in higher finance costs We remain cautious in the near term due to market volatility and weak investor sentiment.

We have reduced our FY26E/FY27E EPS by 7.4%/7 3% to INR 67.5 and INR 74 respectively driven by slower revenue conversion and restrained client budgets impacted by tariffs uncertainty We value Infosys at a P/E multiple of 23x on FY27E EPS, with a target price of INR 1,701. We maintain our rating at 'Buy' on Infosys

India's power distribution space is experiencing a significant transformation, driven by the advancement of smart grid technology. Smart meters continue to see gradual implementation, albeit at a slow pace.

Q4FY25 revenue growth slowed to 7% YoY. EBITDA margin declined sequentially for the first time after seven quarters. Given the sustained pressure on revenue growth and all-time high EBITDA margin, the earnings growth outlook remains weak for FY26.

We upgrade IDFC First Bank (IDFCFB) to BUY with a revised TP of INR 75, as the large proposed capital infusion (INR 75bn) improves visibility on superior loan growth/operating leverage (without any material dilution in book value) topped with inexpensive valuations.