Brokerage - Morgan Stanley | Rating - Underweight | Target - Rs 2,795
Morgan Stanley said it was positive on company's rural recovery in 2-wheelers in Q3, but rising competitive intensity & commodity cost kept it Underweight rating with a target price of Rs 2,795 per share.
It prefers to play rural them through M&M.
Brokerage - CLSA | Rating - Sell | Target - Rs 3,030
Hero MotoCorp has reported soft Q3 results with EBITDA & net profit rising just 4-7 percent YoY (which was in-line)
CLSA said two-wheeler industry is growing in healthy double digits in FY18. It expects 2-wheeler run-rate to moderate in FY19-20.
Valuations at 18x FY19PE are expensive, especially given the muted growth outlook, it feels.
The research house has maintained Sell call on the stock with increased target price at Rs 3,030 from Rs 3,000 per share.
Brokerage - Credit Suisse | Rating - Neutral | Target - Rs 3,560
With having Neutral rating on the stock with a target price of Rs 3,560 per share, Credit Suisse said there was a marginal beat on higher spare part sales.
The management continued to expect double-digit growth for industry in FY19 and maintained margin guidance of 15 percent (with +/- 100 bps) going forward.
Brokerage - Phillip Capital | Rating - Buy | Target - Rs 4,300
Phillip Capital said Q3 results beat estimates with strong volume outlook.
The company will be one of the biggest beneficiaries of rural spend pick-up and volume outlook looked strong as industry recovered from various headwinds, the research house said while maintaining Buy call on the stock with increased target price at Rs 4,300 (from Rs 4,200).
Brokerage - Motilal Oswal | Rating - Neutral | Target - Rs 3,986
Motilal Oswal has increased FY19 EPS by 3 percent to factor in higher volumes and realisations. Valuations at 17.7x/16.7x FY19/FY20 EPS fairly capture its medium-term growth prospects, it said.
It further said results were in line. Hero indicated double-digit growth across scooters and motorcycles in FY19 and it is focused on improving its weak positioning in the premium motorcycle and scooter segments, with plans to launch several models to gain share.
The research house has maintained Neutral rating on the stock with a target price of Rs 3,986.
Brokerage - Prabhudas Lilladher | Rating - Accumulate | Target - Rs 4,104
Hero MotoCorp's Q3FY18 performance was on expected lines, with operating margins at 15.9 percent, lower 110bps YoY and 150bps QoQ, but in-line with expectations of 16 percent.
Management commentary has indicated that going ahead, with several new launches planned over the next few quarters, particularly in the premium (200cc) motorcycle and scooter (125cc) segments, the company should be able to fill the gap in its product portfolio and garner market share in the premium as well as scooter segment. The benefits of the rural recovery are likely to be further visible going ahead for HMCL.
With sustained recovery in rural demand, entry in the premium segments and increase in overall market share, the medium term outlook for HMCL looks promising. However, rising input costs adding to the impact of the Haridwar plant benefits expiring this fiscal, management has guided for margins being lower than current levels in FY19E.
The research house has cut FY19 margin estimates by 60bps to factor in the same. It maintained Accumulate rating with a price target of Rs 4,104.
Brokerage - Morgan Stanley | Rating - Equal-Weight | Target - Rs 682
Third quarter results were a miss and upcoming growth appears priced in, Morgan Stanley said while keeping Equal-Weight rating on the stock with increased target price at Rs 682 (from Rs 475).
Company continued to deliver on new project acquisitions under tough market conditions. Faster monetisation of Vikhroli Land and large project additions are key upsides while delay in new launches and worsening balance sheet are key downsides
Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 467
Morgan Stanley believes share price will rise in absolute terms in next 45 days as it has been underperforming Sensex on investor concerns, higher oil prices.
Current refining margin run-rate is in-line with estimate. The research house has Overweight rating on the stock with a target at Rs 467 per share.
Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 895.5
Company showcased long-awaited U321 at the Auto Expo. Unveiling, if promising, could spur meaningful re-rating for the stock, Morgan Stanley said while having Overweight rating on the stock with a target price at Rs 895.50 per share.
Brokerage - Morgan Stanley | Rating - Underweight | Target - Rs 290
Morgan Stanley said the risk-reward skewed to downside and in-line guidance may not be enough in Q4 results.
Lack of EPS estimate upgrade would mean correction of 5-10 percent, it added.
Brokerage - CLSA | Rating - Buy | Target - Rs 700
CLSA said Max Financial may look to buy stake in PSU bank-led life insurance businesses.
For company, this can lower dependence on Axis Bank (53 percent of new retail premiums in first half of FY18), the research house feels.
CLSA has retained Buy call on the stock with a target price at Rs 700 per share.
Brokerage - CLSA | Rating - Sell | Target - Rs 69
While having Sell call on JSW Energy with a target price of Rs 69 per share, CLSA said coal rise hurt earnings but treasury income supported net profit in Q3.
"We have doubt Karnataka would issue any new long-term power purchase agreement after start of NTPC Kudgi. We cut FY18 net profit by 5.4 percent to factor in lower generation," it said.
The research house raised FY19-20 estimates to factor in the beneficial impact of rupee appreciation.
Brokerage - CLSA | Rating - Buy | Target - Rs 1,000
While maintaining Buy call with reduced target price at Rs 1,000 from Rs 1,060 per share, CLSA said it remained constructive on company as it is trading at attractive valuation.
US business traded at attractive valuation of below 2x FY19 sales and key highlight in Q3 results was 5 percent QoQ increase in US sales.
Weak EBITDA margin was due to lower India contribution & forex loss.
Company expects US price erosion to bottom out over the next few quarters and cut FY18/19/20 EPS by 20/10/6 percent.
Brokerage - Credit Suisse | Rating - Neutral | Target - Rs 850
Credit Suisse has maintained Neutral call on the stock with a target price at Rs 850 per share.
Weak margin is a significant miss in Q3. EBITDA margin was the lowest reported by company in last 5 years while positive in Q3 was no negative surprise in US sales.
Brokerage - CLSA | Rating - Sell | Target - Rs 700
CLSA said volumes were good but margin was weak. Unit EBITDA fell to a 12-quarter low.
Margins are likely to be steady as benefits from higher pricing should be offset by rise in energy cost. CLSA cut EPS forecasts by 5-6 percent.
It has maintained Sell call on the stock with increased target price at Rs 700 (from Rs 645).
Brokerage - Credit Suisse | Rating - Outperform | Target - Rs 1,050
Growth should bounce back in FY19, Credit Suisse said while maintaining Outperform rating on the stock with reduced target price at Rs 1,050 (from Rs 1,150).
It cut revenue growth & margin estimates for FY18 and expects 24 percent EPS CAGR growth in FY18. Growth recovery in Q4 & FY19 will be key trigger.
Brokerage - Macquarie | Rating - Neutral | Target - Rs 270
Macquarie has retained Neutral call on the stock with increased target price at Rs 270 from Rs 240 per share but lowered FY18-20 EPS by 6-7 percent to factor in lower volume growth.
Volume growth target for FY18 cut to 9 percent from 12 percent, it said.
Brokerage - Credit Suisse | Rating - Outperform | Target - Rs 188
Credit Suisse has maintained Outperform call on the stock with target at Rs 188 per share and cut FY18-20 EPS estimates by 7-46 percent.
Non-NPA stress declined and now is at 5.5 percent of loans. Q3 results were weak as provisions remained high.
Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 215
Morgan Stanley has Overweight call on the stock with a target price at Rs 215 per share as the company reported stable asset quality and provisions were 12 percent higher than estimate.
Unfavourable changes in recapitalisation plan and potential merger with weak banks are risks to the rating. Slower recovery in private corporate capex is one of the risks.
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