Brokerage: CLSA | Rating: Sell
The brokerage house believes that the GST’s impact on margin could be over 150 basis points in the current fiscal. It feels that the stock is a positive on long term alcohol beverages sector despite near term issues. The next two-three quarters could be impacted due to the ban on sale around highways.
Information Technology
Brokerage: CLSA
CLSA observed that the March quarter saw stronger revenue growth at HCL, Wipro as well as Cognizant, while there was a minor miss in revenue at TCS. But a major miss was seen at Infosys. Europe and rest of the world dominated growth areas while US was softer, it said in its report. The outlook for FY18 appears stronger at Cognizant, TCS and HCL , while a weak outlook was seen for Infosys, Wipro and Tech Mahindra. It expects FY18 growth to improve by 100 bps led by TCS and HCL.
GST Rates
Brokerage: CLSA
The research firm believes that the June quarter could see a disruption, but will be short lived due to GST. The rates offer relief for cigarette companies, jewellers, and branded garment companies. The tax rates will also go down for soaps, toothpaste and detergent bars, it said in its report. As expected, telecom services will be negatively impacted, the brokerage said in its report. Multiplexes and light electricals will see tax rates rise post GST, it observed. Having said all of this, CLSA sees a small probability of a delay in GST roll out to September.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 1,537
The global research firm initiated coverage on the stock and said that it had multiple levers to grow its earnings before interest, taxes, depreciation and amortisation (EBITDA). It forecasts 22.8 percent FY18-19 CAGR. The target price on the stock implies 32 percent upside.
Brokerage: Morgan Stanley | Rating: Equalweight | Target: Rs 353
The brokerage said that the company had added 23 percent of its beds in the last 3-4 years and provided good EBITDA visibility.
Brokerage: Morgan Stanley | Rating: Underweight | Target: Rs 888
The brokerage house believes that growth potential appears priced in, but it likes the longer term growth story. In the near term, competitive intensity is rising, it added. Having said that, valuations too appear rich at current levels.
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