Brokerage: CLSA | Rating: Buy
The brokerage house cut its first quarter growth estimates by 40 basis points and FY18 by 1 percent. It expects the company to report 8.1 percent growth in FY18. A pick up in BFS spending has not materialised yet, the brokerage house wrote in its report. The company also sees softer trading in BFS due to lack of deals in top ten large banks. Rupee appreciation and wage hikes could result in larger than usual margin pressure, it added.
Meanwhile, the margin estimates for the current fiscal has been cut by 50 basis points on forex pressures, while EPS estimates have also been cut by 8 percent and FY19 EPS by 1 percent.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 1,651
The research firm expects rural recovery, new models and leverage gains to drive growth. It also raised core earnings forecast by 8 and 2 percent for FY18 and FY19. Additionally, it sees 19 percent upside in the stock from the current levels.
Brokerage: Kotak Securities | Rating: Sell | Target: Rs 415
The brokerage house expects the company’s AC business share remaining static at 6 percent.
Brokerage: Jefferies | Rating: Underperform | Target: Rs 100
Jefferies outlined that a risk to the revenue visibility beyond FY19 is rising. The company’s business model remains flawed as overcapacity will mean sub-10 percent return on equity.
MSCI's China-A Shares Inclusion
Brokerage: HSBC
The decision to include China-A shares in MSCI’s emerging markets index will have long term implications, it said. Investors will need to know more about A-share market and the 222 stocks added in MSCI. The initial inflows may gather momentum and growth could be substantial over time, it added.
Brokerage: Goldman Sachs
The global research firm said that the move was widely anticipated. Further, it added that the move could trigger an inflow of around USD 210 billion into China’s markets over five years.
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