Brokerage: Macquarie | Rating: Underperform | Target: Rs 240
There are upside risks on credit costs led by aging provisions on existing NPLs, said the brokerage firm said in its report. Power and telecom are two sectors that are incrementally a cause of worry for the lender, Macquarie said. It lowered FY18/19 earnings by 1-2 percent.
Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 375
Motilal Oswal said that it liked the public sector lender for its strong liability franchise and sees slippage ratio declining in ensuing years. The bank is highly geared to economic upcycle and asset quality improvement, the brokerage house observed. Meanwhile, profitability is likely to be highest among peers on policy of recognizing stress.
Brokerage: Kotak | Rating: Buy
The brokerage firm termed the bank’ Q4 performance to be fairly strong on most operating metrics. Its asset quality was comfortable with slippages broadly closer to estimates, the report added. Simultaneously, the coverage ratio was among the best in public banks, Kotak said.
Brokerage: CLSA | Rating: Buy | Target: Rs 510
Strong growth acceleration as well as margin expansion was seen in Samvardhana Motherson Peguform (SMP) in the fourth quarter. The brokerage added that growth acceleration for the company’s overseas business and India outlook were strong.
CLSA raised FY18-19 earnings per share (EPS) by 4-6 percent, mainly driven by higher estimates for SMP. It also expects the company to deliver a strong 25 percent EPS CAGR over the next three years. On valuations front, it said the premium is justified on the back of strong business and robust growth outlook.
Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 360
The global investment bank expects Motherson Sumi’s India and global business to witness improving trends. It added that the company’s current valuation factors in an upside from projected EBITDA/EPS CAGR (FY17-19) of 21/25 percent.
Brokerage: Credit Suisse | Rating: Neutral | Target: Rs 390
Credit Suisse was neutral on the stock on the back of expensive valuations, despite good execution. It made minor tweaks to earnings and said that the main highlight of Q4 was impressive performance in SMP, its interior business.
Brokerage: IDFC | Rating: Outperform | Target: Rs 28
The brokerage house raised earnings estimates for FY18 and FY19 by 39 percent and 9 percent.
Brokerage: Citi | Rating: Sell | Target: Rs 79.9
The global financial firm said that the stock appears expensive given its sub-par return ratios and growth outlook. The leverage remains high with end FY17 net leverage of 3.1 times. It prefers Power Grid and NTPC In large caps & CESC in midcaps.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 340
Macquarie said that ITC was its top pick in the Indian consumer space. Effective indirect taxation for the company is at 62% compared to expectation of 60%, Macquarie said in its report. It can easily pass on higher taxes without significant impact on
volume. The uncertainty on the tax structure is behind us, it added.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 310
The brokerage highlighted that the tax structure on cigarettes under GST are broadly similar to existing construct. There could be a re-rating if the hypothesis of a fall in cigarette tax is correct, which would bring the stock closer to its bull case value.
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