Indian market is trading in range after the recent surge that pushed the Sensex to a record high of 40,483.
The index is still holding above 40,000 though weighed down by muted global cues, but the Nifty slipped below its crucial support at 11,900.
The hopes of a trade deal have fizzled out for now and with no big triggers lined up, investors should stay cautious in the near-term. The recent rally was led by good Q2 results and in expectation of more reforms.
“Q2 provided a hope that H2 will add more colour to earnings growth, which has been dull in the last five quarters. At the same time, expectation also build-up about likely government measure to provide more stimulus to the economy and equity market with changes in tax structure like income tax, LTCG & DDT,” Vinod Nair, Head of Research at Geojit Financial Services, told Moneycontrol.
“No big event is expected next week other than Q2 results. The market has done well during the recent times, cautious may be required in the short-term.”
We have collated views and recommendations from various global brokerage firms on stocks post- September quarter results or general news flow:
Maruti Suzuki: Overweight| Target Rs 8,205
Morgan Stanley maintained its overweight rating on Maruti Suzuki with a target price of Rs 8,205, which translates to an upside of 11 percent from closing price of Rs 7,385 on November 5.
Suzuki's guidance tends to be lower than Maruti’s guidance. For FY17/18/19, Suzuki guided for 7%, 8% & 6% while Maruti saw double-digit growth, said the note. Going forward, with BS-VI change, volumes could get disrupted in the coming months.
There could be downside risks to estimates but would buy the stock if it corrects on weak Nov/Dec data as sales are at a multi-year low.
Titan Company: Downgrade to Sell| Target cut to Rs 1,025 from Rs 1,350 earlier
CLSA downgraded Titan Company to sell from underperform post- September quarter results and reduced its target price to Rs 1,025 from Rs 1,350 .
The September quarter was a disappointment on almost all fronts. The global investment bank reduced EPS forecasts to 12-16 percent.
The company's Q2FY20 profit grew 1.8 percent at Rs 320.2 crore on the back of subdued growth in the jewellery business, which contributes 80 percent to revenue.
UBS maintained its rating on Tech Mahindra post-September quarter results, with a target of Rs 680. The global investment bank expects a positive reaction to the revenue beat, and operating margin guide.
Dabur India: Buy| Target raised to Rs 575 from Rs 515 earlier
CLSA maintained its buy rating on Dabur India post-September quarter results and raised its target to Rs 575 from Rs 515.
The results were ahead of estimates led by better margins. India volume growth stood at 4.8 percent, which reflected a tough macro environment.
Ex-foods growth was more respectable at 7.4 percent. But, worst may well be over, as there has been a sequential improvement, said the CLSA note. The global investment bank continues to like the company’s portfolio and management strategy around growth.
Biocon: Buy| Target Rs 280
HSBC maintained its buy rating on Biocon, with a target price of Rs 280. The rival drug approval raised a challenge for Fulphila.
Sandoz received USFDA approval for Ziextenzo. It will be critical for Fulphila to recover market share in the Pegfilgrastim market. The launch of biosimilar Trastuzumab in the US will be a key event to watch in the near-term.
Punjab National Bank: Underperform| Target cut to Rs 55 from Rs 65
Credit Suisse maintained its underperform rating on PNB post-September quarter results and reduced its target to Rs 55 from Rs 65.
The stock price keeping pace with book value decline. The loan growth remains muted (+1% QoQ), and pre-provision profitability remained weak.
The NIM remains flat at 2.4 percent, and unlike the expansion seen at other banks in Q2, the global investment bank slashed FY21 EPS estimate by 40 percent.
Disclaimer: The above report is compiled from information available on public platforms, and CNBC-TV18. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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