Brokerages’ Top Picks for Wednesday’s Trading Session
A host of global and domestic brokerages have released fresh views on PB Fintech Ltd., Asian Paints Ltd., InterGlobe Aviation Ltd., Indraprastha Gas Ltd., HDB Financial Services Ltd., and more ahead of Wednesday’s trading session.
Most Bullish Fund Manager Survey of Past Three and a Half Years
Macro optimism is at its highest since August 2021, driven by the ‘run-it-hot’ belief. Allocation to stocks and commodities is at its highest since February 2022, with cash levels at a record-low 3.3%. The December Fund Manager Survey has pushed the BofA Bull & Bear Indicator up to 7.9, which is close to a ‘sell signal’. However, bullish positioning remains the biggest headwind for risk assets.
Asian Paints: A Significant Turnaround
Store visits and interaction with dealers corroborate that Asian Paints has significantly upped its game and engagement with dealers. Volume growth of high single digits/double digit is likely to continue in Q3 as well, which is a significant turnaround considering the overall demand environment remains tepid. Expect Q3 EBITDA growth of 6% and PAT growth of 10%.
Insurance Amendment Bill, 2025: Empowering IRDAI
The Insurance Amendment Bill, 2025 empowers IRDAI to set caps on commissions. IRDAI is mulling a shift to a deferred commission structure instead of the current upfront commission structure. IRDAI is also exploring an overall cap on insurance commissions. Commission caps should not necessarily be detrimental for PB Fintech, as putting a cap will not necessarily impact the take rates. The actual impact will depend on the level at which the new caps are set.
Brokerage Views on Top Stocks
Investec maintains a ‘buy’ rating with a target price of Rs 2,300 per share for PB Fintech. Citi maintains a ‘buy’ rating with a target price of Rs 2,225 per share. UBS maintains a ‘sell’ rating with a target price of Rs 1,660 per share. Goldman Sachs maintains a ‘buy’ rating with a target price of Rs 5,600 per share for IndiGo.
Outlook on the Insurance Sector
The insurance sector is expected to see significant changes with the introduction of the Insurance Amendment Bill, 2025. The bill empowers IRDAI to set caps on commissions, which could have a significant impact on the sector. However, the actual impact will depend on the level at which the new caps are set.
Top Stocks to Watch
Some of the top stocks to watch include PB Fintech Ltd., Asian Paints Ltd., InterGlobe Aviation Ltd., Indraprastha Gas Ltd., and HDB Financial Services Ltd..