Buy, Sell, Hold: 9 stocks, 1 sector on analysts' radar as April series begins

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Kotak Mahindra Bank

CLSA has maintained an outperform rating on the stock with a target price of Rs 920. The research firm believes that the bank’s strong asset quality and healthy growth supports valuations and a clarity on strategic positioning will further support it.

The bank may look at mergers and acquisitions (M&A) among non-banking financial companies (NBFCs), insurance companies and asset reconstruction companies (ARCs), it said. On the lender’s fundraising plan, it believes the amount is less with respect to expectations, but does not lower the chances of a big acquisition.

Cipla

Bank of America Merrill Lynch (BofA-ML) has downgraded the stock to underperform from neutral with a reduced target price of Rs 570. The rating is largely driven by likely delays in key product launches in the US and that regulatory delays are not factored in.

The brokerage house believes that the current valuation to peers is unjustified and has cut earnings per share (EPS) forecasts to 11-13 percent below Street expectations. It also sees margin expansion over the next two years to be lower than market expectations. The research firm prefers Torrent Pharma in the space over Cipla.

Yes Bank

Goldman Sachs has a buy rating on the scrip with an increased target price to Rs 1,700. The focus here on will turn to how quickly retail revenue mix changes. Analysts at the firm estimate 28 percent loan CAGR over FY16-19— highest among private banks that they cover.

Cadila Health

JPMorgan has initiated coverage on the stock with a neutral rating and a price target at Rs 475 per share. It believes that a catalyst for the stock is a recovery in US growth. The research firm sees improvement in earnings visibility, but approvals remain the key. Monetisation of much-delayed launches in the US are also key to estimates. While the premium valuation discounts strong underlying business mix and earnings growth.

Voltas

Nomura has maintained a reduce call on Voltas as rising competition could put margins at risk. However, the brokerage house has an increased target price to Rs 337 from Rs 323. Tier-II or III cities could have a continued impact from demonetisation, Nomura said.

Dr Reddy's

Credit Suisse has cut its target price to Rs 2,300 due to cuts in FY18 and FY19 earnings per share (EPS). It believes that the Srikakulam Plant clearance should remove a key hurdle for Copaxone, which is 20 percent Of FY19 EPS, but is not included in the target price.

Dabur

Bank of America Merrill Lynch has reiterated its underperform rating on the stock with a cut in the target to Rs 280. It sees weak recovery in Indian business and continued pressure in West Asian business.

Power Grid

Bank of America Merrill Lynch has reiterated a buy call on the stock with a cut in target price to Rs 227. The research firm sees opportunity for the stock to compound by 15 percent per year over three years. It believes concerns of investors on TBCB portfolio is misplaced. It believes that growth visibility is high despite likely cut in regulated RoEs. Furthermore, a re-rating is likely if it monetizes assets under InvIT .

Colgate

HSBC has maintained a buy call with an unchanged target price at Rs 1,110. The brokerage house believes lower GST and rural demand revival are the main drivers for the firm, while volume growth revival is the main catalyst. Rise of naturals emerged as a challenge to toothpaste volume growth, it said. Loss of market share remains a key risk for the stock, it said.

Media

CLSA believes the recently-launched tariff plans by telecom companies may boost subscriptions by 35 percent. It further believes that mobiles will complement TV viewership and estimates India’s high ARPU market to rise to 300 million by FY19. Currently, the market is at 170 million.