CLSA, in its latest note, said its India analysts were bearish on 14 stocks. It maintained ‘Underperform’ ratings and set price targets that indicated up to 31 per cent potential downside. They included One 97 Communications Ltd (Paytm) Hindustan Unilever (HUL), JSW Steel Ltd, Lodha Developers Ltd, JSW Energy Ltd, Asian Paints Ltd, Godrej Consumer Products Ltd (GCPL) and Dr Reddy’s Laboratories Ltd (DRL). The list also included stocks such as BHEL, Marico, Bharat Forge, SBI Card, Oberoi Realty and Bharti Hexicom.
On HUL, CLSA said while affordability is not a constraint for most of HUL’s portfolio, rising competition from direct-to-consumer (D2C) and modern retail formats poses a structural challenge to its traditional distribution-led moat. The brokerage suggested a target of Rs 1,966 on the stock.
Despite assuming a 7 per cent increase in steel prices, CLSA sees limited room for consensus upgrades for JSW Steel. It called valuations for the steelmaker elevated and suggested a target price of Rs 890. For Asian Paints, heightened competitive activity is seen keeping pressure on growth and margins as festive benefits fade. For Paytm and SBI Card, valuations are a concern.
Slowing growth and high valuations are seen as a recipe for derating for these two stocks.
Meanwhile, CLSA also suggested. a list of 13 stocks that it said can deliver up to 58 per cent return in the next 12 months. That list included Avenue Supermarts (DMart), DLF, Indus Towers, PFC, Apollo Tyres, REC, ONGC, Persistent Systems, Varun Beverages, UltraTech Cement and Tech Mahindra.
The multiples for some are not for the faint hearted but the growth rates are equally high, CLSA said.
“With a healthy dose of innovation, ambition and risk taking, Eternal is transforming consumption, and we believe it is just getting started, with potential to serve a US$50bn profit pool by FY35CL. We maintain our HC O-PF recommendation and lift target price from Rs 450 to Rs 483,” said CLSA Analyst Aditya Soman.
Eternal’s forecast EPS growth for year ending March 2026, 2027 and 2028 is 103 per cent, 405 per cent and 95 per cent.
On NHPC, CLSA Analyst Bharat Parekh reiterated high conviction O-PF rating on a decadal growth green utility. He said NHPC has 15 per cent of India’s hydro capacity and a 50 per cent share of under-construction projects, driving strong EPS growth.
With a step-change in renewable energy, it forecast 69 per cent higher EPS and ROE to expand 419 bps over FY25-27CL.
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