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Deutsche Bank says UPL's revenue growth visibility has been improving with new product approvals. It feels revenue growth is likely to be weaker in Q4FY17, but will pick up from Q1FY18.
The stock has underperformed nearly 10 percent in last three months on concerns of a muted Q4FY17. The brokerage house sees underperformance by stock as an opportunity to buy. It remains confident of 24 percent EPS CAGR over FY19.
The stock is currently trading at 15.5x FY18 P/E, a 15-25 percent discount to global peers.
Deutsche feels Brazil will remain the key growth driver aided by new product launches. UPL is planning to launch more than 25 new products in Brazil over the next three years.
The company is well positioned for impending competition in soybean fungicides. Fungicides portfolio drives over 50 percent revenue CAGR in Brazil from last 2 years.
CLSA has a sell call on Ambuja Cements as the company posted lowest return ratios in the last two decades. Market share losses remained a continuing trend for company and 2016 was no different.
Free cash flow was a negative but was expected as the ACC stake acquisition concluded, it says.
Ambuja seems to be now gearing up for north expansion, albeit in phases. CLSA says company remains beneficiary of better industry fundamentals.
Potential merger with ACC could drive synergy benefits, the brokerage house feels.
Macquarie says Bharat Financial merger is another instance of IndusInd Bank buying niche growth portfolio.
Given the size of the book & stress in micro finance institutions, execution remains key, it feels.
Acquisition of Bharat Financial will enhance return on assets profile of IndusInd Bank, it says, adding acquisition will be positive in medium term if executed well.
Macquarie has an outperform call on the stock, with a target price at Rs 1,290.
Media reports indicated that IndusInd Bank and Bharat Financial have been in merger talks.
CLSA has maintained its buy call on Hindalco Industries, with increased target price at Rs 230 from Rs 210 as it feels the company is set to embark on next phase of growth.
Interest cost will slide with debt repayment in India & Novelis debt refinancing, it believes. The company has scope to reduce logistics costs meaningfully, it says.
CLSA cut FY18-19 EPS estimates by 3 percent factoring in the recent QIP.
Aviation
Kotak Institutional Equities says aviation turbine fuel (ATF) tax cut by Delhi government is a positive development, but will have negligible impact on the industry.
Air travel from Delhi will get cheaper, it feels.
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