Escorts jumps 8% despite BlackRock Inc reducing stake to 2.84%, HSBC retains buy
HSBC has maintained buy rating on the stock, though it slashed price target to Rs 770 from Rs 980 per share amid lower sales growth.
September 23, 2019 / 12:23 PM IST
Share price of tractor manufacturer Escorts jumped over 8 percent intraday on September 23 despite BlackRock Inc reducing its stake in the company.
As per a regulatory filing, BlackRock Inc brought down its shareholding in Escorts to 2.84 per cent from 3.20 percent by selling shares on September 19. The firm sold 4.41 lakh shares worth around Rs 700 crore through a market transaction.
Global brokerage house HSBC, however, retained bullish stance on the stock. According to the firm, the stock is cheap at 9x FY21 EPS estimates. HSBC maintained a buy rating but slashed the price target to Rs 770 from Rs 980 per share amid lower sales growth.
"Tractor demand may bottom out in second half of FY20. UP/Maharashtra/Gujarat states are likely to see pick-up in growth post monsoons, while MP/Rajasthan should continue to do well," HSBC said, adding Escorts had reduced inventory in recent months.
The stock has gained 19 percent in the last three days. At 1206 hours, Escorts was quoting at Rs 613.00, up Rs 45.05, or 7.93 percent. It has touched an intraday high of Rs 613.60Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.