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Last Updated : Nov 18, 2019 02:28 PM IST | Source: Moneycontrol.com

Brokerages raise target price of these 10 large, midcap stocks post Q2 results

The market traded in a range last week amid weak macro data, but inline performance of India Inc helped the Nifty close near its crucial support of 11,900.

 
 
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Profit booking at the last hour of trading wiped out most of the intraday gains resulting in a flat closing on November 15, though Nifty managed to end near 11,900 levels.

At close, the Sensex was up 70.21 points at 40,356.69, while Nifty was up 23.20 points at 11,895.30.

On a weekly basis too, the market ended flat for the week ended November 15 as it traded in a range amid weak macro data and inline numbers from India Inc with no major cues on the global front.

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In the week gone by, the Sensex rose 33.08 points to end at 40,356.69, while the Nifty was down 12.65 points ended at 11,895.5.

Foreign Institutional Investors (FIIs) remained net sellers selling equities worth Rs 321.30 crore during the week, while Domestic Institutional Investors (DIIs) also sold equities worth of Rs 514.61 crore.

The BSE midcap index was up 0.28 percent, while the smallcap index fell 1.10 percent and the BSE largecap index was down 0.22 percent.

Here are 10 companies in which brokerages raised target price post Q2 numbers:

Adani Ports | Brokerage: Macquarie | Rating: Outperform | Target: Raised to Rs 496 from Rs 470 per share

Macquarie has lowered the volume guidance to 224-228 MMT for FY20 at 8-10 percent growth. However, the cargo diversification in bulk, break-bulk & gas will give resilience.

The balance sheet has ample headroom to fund expansion and acquisitions, it feels.

It has raised FY20-22 EPS estimates by 5-6 percent.

The company's consolidated net profit rose 72.4 percent at Rs 1,059.2 crore versus Rs 614.2 crore, while revenue was up 8.2 percent at Rs 2,821.2 crore versus Rs 2,608 crore.

The earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 15.7 percent at Rs 1,311.1 crore and EBITDA margin was up 210 bps at 46.5 percent.

Coal India | Brokerage: Citi | Rating: Buy | Target: Raised to Rs 270 from Rs 250 per share

Citi is of the view that volume weakness could persist for a few months. The firm believes that at 7x one-year-forward PE, risk-reward is favourable.

It has raise FY21/22 PAT estimates on lower tax.

The company posted a 14 percent rise in consolidated net profit at Rs 3,522.7 crore for the quarter ended September. Its net profit stood at Rs 3,084.54 crore in the year-ago period, the company said in a regulatory filing.

Coal India's total income, however, declined to Rs 22,012.94 crore in the July-September quarter of the financial year 2019-20 from Rs 23,486.35 crore in the corresponding period of previous fiscal.

Motherson Sumi | Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 150 from Rs 130 per share

Credit Suisse expects India business to pick up and also sees a return to profitability for SMP greenfields.

The company reported a 3.6 percent year-on-year growth in Q2 FY20 net profit t Rs 384.6 crore against Rs 371.07 crore in the same period last year.

Consolidated revenue from operations rose 5.4 percent YoY to Rs 15,924.2 crore, with Samvardhana Motherson Peguform showing a 14.66 percent growth and PKC growing 6.8 percent.

The company's standalone business degrew 17.2 percent YoY. Samvardhana Motherson Reflectec (SMR) reported a 1.48 percent decline in revenue.

Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) rose 2.1 percent YoY to Rs 1,319 crore and margin contracted 25 bps YoY to 8.3 percent in Q2 but manages to beat analysts' estimates.

Mahanagar Gas | Brokerage: Citi | Rating: Buy | Target: Raised to Rs 1,135 from Rs 1,100 per share

Brokerage house Citi has raised the EPS estimates by 11-25 percent to factor in the lower tax rate.

It maintained buy rating on reasonable valuations as stake sale overhang is now behind, while volume growth slowed further even as margins remained high.

In Q2FY20 the company's net profit rose 59 percent at Rs 270.6 crore versus Rs 170.2 crore, while revenue was up 3.7 percent at Rs 783.6 crore versus Rs 831.2 crore, QoQ.

EBITDA was down at Rs 273.4 crore, while EBITDA margin was down at 34.9 percent, QoQ.

Bharti Airtel | Brokerage: Credit Suisse | Rating: Neutral | Target: Raised to Rs 380 from Rs 370 per share

According to Credit Suisse, the EBITDA of 6 percent ahead of estimates. Meanwhile, regulatory headwinds will remain an overhang in the near term, it feels.

The stock is already building in a 30 percent increase in mobile ARPU by FY22.

We have not factored AGR dues in our target, it added.

The company posted a massive loss of Rs 23,044.9 crore in Q2FY20, dented by exceptional loss for the license fee and spectrum usage charge (SUC) especially after the unfavourable verdict from Supreme Court on adjusted gross revenue (AGR) dues.

It reported a loss of Rs 2,866 crore in the June quarter and a profit of Rs 118.8 crore in the year-ago period. An exceptional loss for the quarter stood at Rs 30,711 crore against Rs 144.9 crore in June quarter, the company said.

The earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 5.2 percent QoQ (up 41 percent YoY) to Rs 8,936.3 crore in the quarter ended in September. The margin expanded to 42.3 percent during the quarter, up 130bps sequentially and 1,080bps YoY.

Glenmark Pharma | Brokerage: CLSA | Rating: Upgrade to buy from sell | Target: Raised to Rs 410 from Rs 350 per share

According to CLSA, the company's 2QFY20 results were ahead of our estimates. All geographies witnessed YoY growth for the first time in over three years.

It expects US sales momentum to remain strong, while India business should continue growing above the industry rate.

CLSA increased FY20-22 EPS by 3 percent & 22 percent.

The company reported a consolidated net profit to Rs 255.54 crore for the second quarter ended September, 2019. The company had posted a net profit of Rs 414 crore in the July-September quarter a year ago.

Net sales of the company stood at Rs 2,763.73 crore, up 8.81 percent, during the period under review as against Rs 2,539.85 crore of the corresponding quarter previous fiscal.

J K Cement | Brokerage: AnandRathi | Rating: Buy | Target: Raised to Rs 1,394 from Rs 1,204 per share

According to AnandRathi, benefitting from healthy realisations and cost savings, the company reported an all-round good performance, with revenue/EBITDA/PAT growing 14%, 50%/68% y/y.

Its expansion plan is on track, and would further aid volume growth.

More white cement sales and input-cost softening would further boost its operating performance.

The company's management said that the cement demand would improve in H2FY20 and talked of additional 0.8m-1m tons from the expanded capacity in FY20. The management expects further savings of Rs 20-30/ton in logistics and Rs 100/ton in power cost from the new kiln and easing pet-coke prices.

The company's Q2FY20 net profit was up 60 percent at Rs 79.50 crore against Rs 49.64 crore, YoY.

Voltas | Brokerage: Geojit Financial Services | Rating: Reduce | Target: Raised to Rs 648 from Rs 635 per share

The broking house expects margins to be under pressure going forward. The signs of economic recovery and thereby rise in consumer consumption is yet to be seen. Hence, downgraded the rating on the stock with a revised target price of Rs 648 based on 30x FY21E adjusted EPS.

The company's consolidated net profit remained flat at Rs 107.28 crore in the second quarter ended September 30 against profit of Rs 107 crore in the same quarter last fiscal.

Revenue from operations during the period under review also remained flat at Rs 1,421.94 crore. Revenue from cooling products for comfort and commercial use was at Rs 525.55 crore as compared to Rs 441.01 crore during the second quarter a year ago.

ABB India | Brokerage: KRChoksey | Rating: Hold | Target: Raised to Rs 1,528 from Rs 1,370 per share

For the quarter, margins expanded due to better product mix, improved value offering and higher capacity utilisation along with production efficiency.

Taking cues from the company’s strong order book pipeline and a strong focus on electrification and motion segment, the broking house expect a stable growth momentum for the company.

The company has reported a 13 percent QoQ jump in its consolidated net profit for the September quarter at Rs 78.81 crore against Rs 69.74 crore. The company’s revenue was up 1.2 percent at Rs 1,745.6 crore versus Rs 1,726 crore, QoQ.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was down at Rs 123.4 crore versus Rs 123.9 crore, while EBITDA margin was down at 7.1 percent versus 7.2 percent, QoQ.

Symphony | Brokerage: HDFC Securities | Rating: Buy | Target: Raised to Rs 1,812 from Rs 1,810 per share

According to HDFC Securities, the company's 2Q performance was in-line with expectations and further builds confidence for a robust 2HFY20 show.

The broking house remains bullish given its sharp recovery in domestic business and scope to tap new opportunities.

With trade inventory now at low levels, Symphony will enjoy off-season stocking, opportunity to launch tech-rich coolers and benefit from a favorable base. Besides, its international performance will improve given the various initiatives undertaken.

The company's Q2FY20 consolidated net profit rose 87 percent at Rs 58 crore against Rs 31 crore in the same quarter last year.

Revenue of the company increased by 22 percent at Rs 272 crore versus Rs 223 crore, YoY.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Nov 18, 2019 02:11 pm
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