Buy, sell, hold: 9 stocks that analysts are watching out

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Dish TV

CLSA has reiterated buy rating on Dish TV, with increased target price at Rs 125 from Rs 106 as the brokerage house sees margin triggers ahead.

New TRAI norms and Vd2H merger will boost profitability, it feels.

Yes Bank

CLSA has a buy call on Yes Bank, with increased target price at Rs 1,780 from Rs 1,620 as it sees a 24 percent earnings CAGR over FY16-19.

The research firm believes bank should see strong growth in retail loans over next three years as it leverages a broader product suite and the opportunity to cross-sell to internal customers.

Moreover, as CASA scales to 40 percent of deposits, it can lower rates on savings deposits by 100-150bps (from 6 percent now); a 50bps cut can lift earnings by 4 percent. This can improve the profitability of the retail segment, which is in the investment-phase and incurred loss of Rs 220 crore in 9MFY17, CLSA says.

In the near term, the brokerage house says it would watch out for growth and the profitability of corporate lending given the sharp cuts in lending rates by large banks, though a fall in deposit rates helps.

Oil & Gas

CLSA says another poor demand print may question oil marketing companies' valuations as diesel demand fell for second continuous month.

While a large base may be behind the weak growth, it will remain high for 9-12 months, it says, adding industry needs to climb over a high base like last year to do better.

Lower industry growth question IOC, BPCL & HPCL's multiples & valuations. Disappointment in strong volume growth could drive de-rating in oil marketing companies stocks, CLSA says.

Every 1x lower multiple pulls down target price of IOC/BPCL/HPCL By 16/13/14 percent. The brokerage house has cut BPCL & HPCL's forecast to sell.

Capital Goods

CLSA has retained its buy call on L&T, IRB Infrastructure, J Kumar Infraprojects and Sadbhav Engineering as government's initiatives will improve infra liquidity via InvIT showing results.

Analysis with 29 engineering and construction companies shows muted capex revival, indicated by backlog growth. Growth was stronger in construction, led by urban infra & roads, it says.

Capital goods EBITDA margin surprised but may be peaking, it feels.