Bank of America Merrill Lynch says acquisition of US-based CJS Group provides Tech Mahindra with an entry in the healthcare vertical. Business exposure of CJS is mainly to clients in US & UK.
Acquisition transaction is likely to be mildly earnings accretive and deal valuation at USD 110 million appears to be in-line with industry trend, the brokerage house feels.
Tech Mahindra is likely to use existing cash for CJS' acquisition. BoAML sees a contingent mull of USD 130.5 million based on 2017-19 revenue and EBITDA targets.
The brokerage house has maintained underperform rating on sensitivity w.r.t H-1B visa program in the US. Every 10 percent increase in H-1B wages may hurt earnings by 11 percent, on gross basis, BoAML feels.
However, Credit Suisse has maintained outperform rating on the stock as it finds CJS acquisition attractive on reasonable valuations.
CJS' large US-employee base should provide company with better employee mix, it believes. Based on current revenue & margin, Credit Suisse believes acquisition to be earnings-neutral.
Kotak Institutional Equities cautioned the street of higher-than-expected stress in Bharat Financial's portfolio. It has retained reduce call with a target price of Rs 730.
While maintaining neutral rating on the stock with a target price of Rs 720, Credit Suisse says there has been no sharp recovery in collections and over 4.4 percent portfolio remained overdue for more than two months.
It feels, shortfall in collections in off-book remains significant.
Goldman Sachs has revised its target upwards on Bajaj Finserv to Rs 3,220 from Rs 2,960 as it incorporated updated valuation. Demonetisation impact faded but earnings headwinds remain, it feels.
The brokerage house is continued to apply a 10 percent conglomerate discount on the company. Securing major bancassurance partner and better-than-expected margin are key risks.
CLSA says it has reiterated sell call on ACC as company's internal & external pressures impacted 2016 performance and lack of growth focus drove market share losses again.
It believes new unit in East India should help volumes in the medium-term. CLSA still see company as a key beneficiary in an upcycle.
Potential merger with Ambuja Cements could help drive synergy benefits, it feels.
Goldman Sachs has retained neutral rating on Tata Power as it factored in the Welspun acquisition in estimates.
The research firm has increased target price to Rs 81 from Rs 79, though FY17-19 topline estimates declined by 12-19 percent & profit by 3-12 percent.
Goldman Sachs has maintained sell rating on the stock, with a target price of Rs 398 on weak fundamentals in the near-medium term.
The stock is trading at 2.6x book adjusted for 70 percent provision coverage, it says.
Goldman Sachs has a buy rating on Kotak Mahindra Bank, with a target price at Rs 925.
Credit Suisse has maintained outperform rating on the stock, with increased target price at Rs 150 from Rs 110. It feels operational recovery will continue as volumes ramped up.
Higher steel prices/coal output resulted in 3-7 percent higher EBITDA. Any favourable outcome of the pending cases could be an added plus, Credit Suisse feels.
Media
Nomura says it feels new tariff order by TRAI for broadcast & cable services is positive for media industry. According to the brokerage house, cost per pay channel is likely to go up, especially for MSOs (multiple system operators).
It says there is no clarity over how TRAI’s order will be implemented in analogue areas. Uniform pricing formula favours DTH & broadcasters, but may be negative for MSOs, it feels.
Nomura believes large broadcasters such as Zee Entertainment will be less affected on strong demand. Operators such as Dish TV may benefit from higher carriage costs and better ARPUs, it feels.
Digitisation & better monetisation will be key medium-term drivers, Nomura says.
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