AU SFB, Havells India, HCL Tech, M&M Financial: Nuvama shares target prices post Q4 results

Q4 results review: AU Small Finance Bank's Q4 results were a miss on credit cost and the SFB's net interest margin (NIM) too was soft. Similarly, Mahindra & Mahindra Financial Services reported a miss on net interest income (NII) amid weak growth in disbursals and elevated credit cost. Havells India posted a strong beat on all counts in Q4FY25, while HCL Technologies' March quarter results were largely in line with Street expectations, Nuvama Institutional Equities said in results review notes.

AU SFB | Target price: Rs 530
Nuvama said AU SFB's credit cost missed the consensus estimate by 15 per cent in Q4FY25. Credit cost gross of recovery income (comparable to peers) rose to 2.5 per cent of GLP from 1.95 per cent QoQ. Credit cost in cards rose to 16 per cent from 11 per cent QoQ. Slippage fell 7 per cent QoQ due to improving CE in MFI and secured loans (slippage not comparable to peers since it is net of inter quarter changes versus
gross for others). 

Nuvama said NIM fell 6 bps QoQ and was partly shielded by day count. "PPOP grew 7 per cent QoQ, but core PPOP grew slower at 2.7 pre cent QoQ. Guidance is for an elevated credit cost in H1 but an improvement in H2FY26E. In FY26E, credit cost (to assets) could fall to 85bp from 1.3 per cent YoY. Reiterate ‘REDUCE’ with a target of Rs 530 as we find the risk-reward to be unfavourable at the current 2.3 times BV FY26E for RoA of 1.5," it said. 

M&M Financial | Target price: Rs 280
Mahindra & Mahindra Financial Services reported a miss on NII; its  disbursal growth was weak and credit cost elevated for the quarter. Yield fell sharply by 30 bps sequentially as Mahindra Financial took a one-time hit for the year, entirely in Q4FY25, from the change in method of charging interest from disbursal not from sanction date. 

NII grew 6 per cent YoY. Opex was elevated at 2.9 per cent while credit cost rose to 1.5 per cent versus almost nil last quarter. PPOP fell 1 per cent QoQ while PAT plunged 37 per cent QoQ. 

"Cross-cycle credit cost shall range at 1.3-1.7 per cent and opex shall not breach 2.7 per cent. While MMFS shall pursue mid-to-high teen AUM growth in five years, near-term growth may be lower. With a soft quarter and likely near-term growth pressures, retain ‘HOLD’ with target of Rs 280," Nuvama said.

Havells India | Target price: Rs 1,890 
Nuvama said Havells India posted a strong beat on all counts in Q4FY25. Revenue rose 20 per cent YoY against 16 per cent growth estimate, led by C&W (up 21 per cent YoY) and Lloyd (up 40 per cent YoY; low base). EBIT margin rose 20 bps YoY, which was 230 bps above estimate, led by robust switchgears and Lloyd segments.

"While the overall demand scenario is soft (except in industrial cables), concerns are emerging on RAC, particularly in secondary sales in the southern region (weak in Mar’25 and Apr’25). Recent government measures (tax savings and a favourable liquidity scenario) shall help revive demand though. We are raising FY26–27 estimates by 4 per cent/5 per cent to factor in improved margins in Switchgears and Lloyds, yielding a Mar-26 target of Rs 1,890 (52 times FY27 EPS)," Nuvama said.

HCL Tech: Target price: Rs 1,700
Nuvama said HCL Tech's Q4FY25 results were in line with expectations. Its dollar revenue at $3,498 million, fell 0.8 per cent in constant currency (CC) terms QoQ, but were in-line with Street’s estimate of a degrowth of 0.5 per cent. EBIT margin at 18 per cent were down 150 bps QoQ, but were in line with estimates. TCV came in strong at $2,995 million, up 31 per cent YoY.

"HCLT's FY26 revenue growth guidance (2–5 per cent CC YoY) was slightly better than expectations, as well as Infosys (0–3 per cent), with a reasonable required CQGR (0.3–1.5 per cent). We maintain FY26/27 estimates and continue to value HCLT at 23x FY27PE. The stock has corrected sharply (-23 per cent CYTD) and now offers a highly attractive 4.2% dividend yield. Upgrade to 'BUY' with target of Rs 1700 (unchanged)," Nuvama said.