Moneycontrol Bureau
Here are brokerage calls on top stocks for today.
Macquarie says Sun Pharma remains its preferred large-cap pharma pick, as it considers it best positioned to make the speciality transition which is essential for long-term growth.
Along with the recently launched AGs for Benicar and Benicar HCT, which have limited competition, the ramp-up of speciality launches like Bromsite (launch imminent), Xelpros and Elepsia in the next few quarters should lend support to growth in absence of one-time opportunities, it feels.
The brokerage house has an outperform rating on the stock with a target price of Rs 1,020.
Credit Suisse expects strong 22 percent EPS CAGR over FY17-19, and has maintained its outperform rating on Petronet LNG with a target price of Rs 750 per share.
It updated its models for higher volumes (6 percent increase in FY17 throughput at Dahej) and robust Q2FY17 numbers; FY17 EPS increased 4 percent, it says.
The brokerage house expects the LNG terminal utilisations to improve from around 7 percent currently to around 15 percent once BPCL's refinery fully ramps up (Q4FY17), helping lower Kochi losses.
Following a sharp 30 percent correction in the last three months, the Ambuja Cements stock is at an interesting level, says Deutsche Bank.
It further says while it is still not cheap on earnings based multiples, i.e., CY17E P/E of 33x or EV/EBITDA of 15x, the second largest cement player in India is available at an EV/tonne of USD 112 – a good 25 percent below the replacement cost.
Additionally, Ambuja Cements has net cash on its books, and its parent LafargeHolcim recently bought more stakes in the company as well as its subsidiary ACC.
Nomura says the recent correction in Bajaj Finserv has brought valuations closer to fair levels. Moreover, both parts of the insurance business are picking up with life business growing from a weak base and crop insurance aiding growth for general insurance.
The brokerage house has retained neutral rating with a target price of Rs 3,200 per share.
Nomura says consumer discretionary disbursements had dropped by 30-35 percent in the first few days of demonetisation but are down 20 percent now and will likely normalise over next one to two months. Overall management reiterated its 20-25 percent growth target and expansion in margins will help offset the higher credit cost impact.
With improving efficiencies in FEHI, FMRI and SRL, Fortis Healthcare looks well poised to deliver profitable growth, says Macquarie.
The brokerage house thinks current levels provide a very attractive entry opportunity with a 12-month view on the name. It believes a demerger and separate listing of SRL will help unlock significant value for Fortis shareholders.
Macquarie has maintained an outperform rating on the stock with a target price of Rs 275 per share.
Steel
Credit Suisse has an overweight rating on Tata Steel, JSW Steel and Jindal Steel with a target of Rs 515, Rs 2,000 and Rs 110, respectively. It is underperform on SAIL with a target of Rs 35 per share.
Utilities
Credit Suisse has retained outperform rating on central utilities on low risk model with visible growth & attractive valuations. It prefers Power Grid over NTPC, given higher near-term return on equities. It has set a target for NTPC at Rs 180 and Rs 225 for Power Grid.
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