Moneycontrol
Nov 13, 2017 01:41 PM IST | Source: Moneycontrol.com

Buy, Sell, Hold: 7 stocks on analysts radar today

Axis Bank, SBI and M&M, among others, being tracked by analysts on Monday

 
 
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Axis Bank

Brokerage: CLSA | Rating: Buy | Target: Rs 650

The brokerage said that capital raising amount is in line with its assessment. Further, it believes that the issuance will cause a dilution of 9 percent and lift its FY19 net worth by 18 percent. Going forward, normalisation of asset quality/credit costs should ease concerns, it added.

Brokerage: Edelweiss Sec | Rating: Hold | Target: Raised to Rs 589

The brokerage said that overall recovery momentum is likely to be arduous and believes that capital will be a boost.

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 620

Deutsche Bank said that the big capital raise boosts confidence and the near term overhang is fading. It sees FY18 earnings diluting by 4%.

State Bank of India

Brokerage: Edelweiss Sec | Rating: Buy | Target: Raised to Rs 399

Edelweiss Securities said that the September quarter’s performance was encouraging on the asset quality front. Further, an elevated credit cost could restrict return on equity to 9-10 percent by FY19. In fact, the capital infusion initiative of the government could provide cushion to asset quality swings.

Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 381

Credit Suisse expects credit cost to fall to 1.6 percent in FY19 and normalize at 1.2 percent in FY20. Further, a forecast of lower slippages leads to 9% raise in estimates, while operating profit was modest with muted loan growth.

M&M

Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 1,800

Credit Suisse raised FY18 tractor volumes by 2% in FY18 and margin by 40-100 basis points, leading to 3-10 percent rise in EPS. It also highlighted that the firm reported the best margin in the last five years.

Aurobindo Pharma

Brokerage: HSBC | Rating: Buy | Target: Cut to Rs 815

HSBC said that the US outlook was steady despite challenges on multiple launches and volume growth. Further, improving margin profile of EU could support US traction, it said in its report. It is building in injectable sales for FY17-19 of 31 percent CAGR against 14 percent US sales.

Nestle

Brokerage: Morgan Stanley | Rating: Underweight | Target: Raised to Rs 6,400

The global research firm increased CY17 & Cy18 EPS estimates by 6% & 2%, respectively. It is factoring in 210 basis points margin expansion for 2016-2018.

Bank Of India

Brokerage: Deutsche Bank | Rating: Sell | Target: Raised to Rs 120

The global financial services firm said that lower slippages, but low capital ratio will require huge dilutions. But, it expects muted return on equity at 3-5% over FY18-19.

Jubilant Food

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 1,775

The brokerage said that 5% GST without input credit is a minor headwind to tackle. And, any short-term volatility should be used to buy the stock.

BPCL

Brokerage: DB | Rating: Buy | Target: Rs 625

The brokerage said that the firm reported strong operating performance. Further, it values the company’s refining at 6x FY19e EV/EBITDA, marketing business at 8x FY19e EV/EBITDA. It is also adding the value of investments at 15 percent discount to the market price.
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