Brokerage: Jefferies | Rating: Underperform | Target: Rs 462
Jefferies said that it finds the valuation premium of the company to be unjustified. Further, it said that it may be hard for the company to create value from insolvent Nagarjuna oil. NOCL may do little for BPCL marketing as well, it said, adding that it sees more risk than reward in NOCL.
Brokerage: CLSA | Rating: Upgrade to Buy | Target: Raised to Rs 930
CLSA said that the firm is its top pick in the sector and added that its channel checks indicate a demand pick up in Tamil Nadu. It expects the volume growth to improve in the next 12-18 months. The brokerage house has upgraded FY20 EPS estimates by 3-6 percent.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 1,609
The global research firm expects significant improvement in demand in the last three months. Further, GST rate cuts, gradual recovery in rural markets leading to higher volume growth. It also said that the company is its top pick in consumer space.
Brokerage: IDBI Cap | Rating: Initiate Coverage with Buy | Target: Rs 32
The brokerage believes that brighter days ahead are lined up for the company and there is a value unlocking on the cards. While stating that the company is a top pick in the industrials space, divestment of roads is a matter of time, it added.
Consumer
Brokerage: Deutsche Bank
The global investment bank said that better fundamentals are outweighing concerns on expensive valuations. it is seeing a consensus excitement about profitability of higher rural spends by the government. Its preferred picks are HUL, Jubilant Food, Titan, GSK Cons, Dabur & Nestle. Most companies are indicating that they have a strong pipeline of product launches.
Telecom
Brokerage: Jefferies
Jefferies expects the sector’s profitability to remain under pressure for another 12 months. It expects improvement from Mid-FY20e, when share for top-three stabilises. At this point, it said, consumer willingness to pay higher for similar service is low and valuations are factoring in best case now. Jio's ARPU discount is also at its target level, limiting price hikes. Overall, it sees industry revenue to decline 5% over next 12 months, while mid term revenue CAGR of 15 percent may be seen.
Housing
Brokerage: CLSA
CLSA said that proxy indicators are improving, while execution ramps up on PMAY urban. Housing cycle has started showing some green shoots and improved affordability along with government support should drive housing cycle.
Utilities
Brokerage: Morgan Stanley
The global research firm said that merchant tariffs reached a new high of Rs 4.84/kWH. It sees this as unsustainable as tariffs are driven by demand seasonality. It has revised price targets across coverage to factor in rising bond yields.
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