Credit Suisse said the recent shutdown in Odisha state has taken out 10 percent of India's Output.
India may turn into a net importer of again as steel production continues to rise and domestic iron ore prices may rise if India turns net importer of ore, it feels.
With domestic steel output is still growing, net exports of ore have fallen to near zero, the research house said.
Credit Suisse further said rise in domestic steel prices benefits vertically-integrated players like Tata Steel.
The research house has an Outperform rating for Tata Steel with target price at Rs 830 per share and JSW Steel with target at Rs 300, but has a neutral rating for Jindal Steel & Power with target price at Rs 150.
Information Technology Sector
CLSA said CY17 saw a better-than-feared year for IT sector even as growth & earnings disappointed.
"We don’t see strong bottom-up signs of growth recovery. Companies will have to negotiate challenges from immigration & tax change distractions," it added.
The research house expects demand to continue to remain soft in Q3 results for IT companies. December 2017 will be a seasonally weak quarter with constant currency QoQ growth of 1-2.6 percent, it said.
CLSA has reduced its growth expectations for Wipro, TCS & HCL Technologies, and lifted expectations for Infosys.
Infosys, HCL Technologies and TCS are its key buy ideas.
The research house has downgraded Wipro to Sell from Outperform and maintained Sell on Tech Mahindra.
It has lowered revenue & EPS by 1-2 percent for Wipro, TCS & HCL Technologies while it increased Infosys target by 8 percent but lowered Wipro target by 9 percent.
CLSA said after a challenging last year, it expects 2018 to witness a pick-up in demand for consumer sector.
Rise in oil prices and related derivatives are concerns but it forecasts margin to sustain.
The research house is optimistic on rural India given rising government spending & general election in 2019.
It has retained its Buy call on ITC, Emami, GSK Consumer, Varun Beverages & Jubilant Foodworks.
The research house has upgraded Asian Paints to Buy from Underperform, Titan to Outperform from Buy, Godrej Consumer to Outperform from Underperform; and Kansai Nerolac to Outperform from Buy.
CLSA prefers M&M followed by Maruti Suzuki/Eicher Motors in original equipment manufacturer, and Bharat Forge in auto components segment.
Industry seeing decent demand trends in most segments should sustain in FY19, it believes.
The research house said fading low base will impact YoY growth rates in the year.
It expects passenger vehicle and medium & heavy commercial vehicle segments to post a healthy 10 percent volume CAGR in FY19-20. It also expects 2-wheelers to post moderate to 7 percent CAGR in FY19-20.
CLSA believes the competition should remain high in 2-wheelers & trucks but it is easing in passenger vehicles.
Higher input prices & regulatory changes will pose margin headwinds, it feels. It prefers stocks benefitting from cyclical recovery or having solid franchise.
Brokerage - Motilal Oswal | Rating - Buy | Target - Rs 370
Motilal Oswal has reiterated its Buy call on ICICI Bank with a target price of Rs 370 per share as it has maintained 18-20 percent growth guidance for retail segment, though margin is likely to moderate in second half of FY18.
Subsidiaries & associates account for over 30 percent of target valuation, it said.
It further said bank's monetisation of arms is on track and the pace of decline in overseas loans is expected to moderate.
It expects credit cost to moderate from FY19.
Progress on asset resolution via National Company Law Tribunal remains a key trigger for the stock, it feels.
Dr Reddy's Laboratories
Brokerage - Nomura | Rating - Buy | Target - Rs 3,281
Nomura has a Buy call on Dr Reddy's Laboratories, with a target price at Rs 3,281 per share.
After reviewed established inspection report from USFDA for company's Duvvada plant, the regulatory risk at the unit is high, it said.
The research house doesn't expect escalation in the near term given passage of time.
Re-inspection outcome of Duvvada plant will be key for the stock, it feels.