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Last Updated : Dec 22, 2016 03:21 PM IST | Source: Moneycontrol.com

Buy, sell, hold: 3 stocks & 2 sectors to focus as market weak

Credit Suisse says it remained cautious on the cement space as commentary from cement companies turned more negative.

 
 
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Moneycontrol Bureau


Here are three stocks and two sectors that analysts are focussing today:


Jubilant Foodworks

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Morgan Stanley has cut FY17-FY19 earnings estimates for Jubilant Foodworks largely to reflect the impact of the currency exchange programme.


"The impact on Jubilant Foodworks is higher given the higher business operating leverage, impact of 'lost sales' in Q3FY17 and our assessment that Jubilant Foodworks may cut its store expansion plan," the brokerage house says.


Voltas


Goldman Sachs has maintained neutral call with no near-term catalysts for Voltas to re-rate but remained constructive on long-term growth potential.


The brokerage house expects unitary cooling products sales to decline by 10 percent YoY in the first half of financial year 2017-18 and increase 10 percent YoY for FY18. It also expects EPS for FY17/18 at Rs 10.50/13.30.


Goldman says uncertainty post demonetisation continues and there is no near-term catalyst. Demonetisation could change the spending patterns, it feels.


According to the firm, domestic business margin may remain soft in near-term and increase gradually from FY18/19.


Management did not quantify near-term impact of demonetisation on AC sales and expects impact of demonetisation on AC sales to be minimal, it says.


The brokerage further says muted outlook for real estate could likely impact sales of associated products.


Reliance Communications


Moody's says rating on stock is remained under review despite tower business sale. The company yesterday signed binding agreement with US company Brookfield Infrastructure to sell tower business.


The reason for ratings under review is demerger of wireless business and sale of telecom tower assets, it says.


The rating agency sees lack of clarity on the cash flow generating capabilities of company's other businesses.


Cement


Credit Suisse says it remained cautious on the cement space as commentary from cement companies turned more negative. Some companies are expecting double-digit volume decline for the month of December, it adds.


According to the research firm, companies require 3.5 percent price increase in Q4 to maintain margins and 5 percent average selling price increase is required in Q4 to meet consensus.


The brokerage house feels cement demand growth should remain weak in FY18 as well at 5 percent.


Budget-related rally in cement stocks may be short-lived, according to Credit Suisse.


IT


Citi says mixed quarter for Accenture posed further questions around demand in the technology sector.


Accenture reported revenues/bookings below expectations in Q1, though it continued to expect FY17 revenue growth of 5-8 percent in local currency.


Immigration reform is another headwind to watch out for, it feels.



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First Published on Dec 22, 2016 09:45 am
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