Moneycontrol Bureau
While maintaining sell call on Nestle with a target price at Rs 5,650, CLSA says valuations are rich at over 45x one-year forward earnings.
"We like company's increasing growth focus but it takes time to show up," the brokerage house says, adding it continued to build in ramp-up in revenue as Maggi noodles gain traction ahead.
Credit Suisse has maintained underperform rating on the stock as company's valuations are expensive compared to peers.
The research firm says it cut earnings by 3-4 percent as company finding it tough to get Maggi back to old form. 5-10 percent higher Q4 sales validate slowdown in ramp of Maggi, it feels.
CLSA has retained its buy call on Phoenix Mills, with reduced target price at Rs 460 from Rs 479. It says company's lease income growth at malls is at 6-7-quarter high despite demonetisation. Capex strategy may enable low strain capex, it feels.
JPMorgan is overweight on HDIL, with a target price at Rs 140 as net debt continued to decline and thesis on the stock is intact.
Pre-sales were weak in Q3 but the brokerage house expects a recovery in FY18. According to the research firm, market's focus on company's earnings is wrong.
CLSA says insurance sector will be key beneficiary of shift in savings pattern from physical assets. Unit linked insurance plans (ULIPs) can be attractive given lower deposit rates and good return from capital markets, it feels.
Mutual fund assets increased by 36 percent YoY, though it is debt funds that formed 67 percent of total, it says.
CLSA expects new premium collections to see 16 percent CAGR over FY16-19. ICICI Prudential Life remains its key pick in the sector, the brokerage house says.
With recommending sell on Ajanta Pharma, Ambit says dream run led by strong growth in Africa would end with return of incumbents in FY18, no growth in donor funding over 2016-19, and re-alignment of portfolio in branded generics.
These would result in a 3 percent decline in revenues in FY18 in Africa, it feels. In domestic, as Ajanta hits the ceiling in existing therapies, growth could taper but remain higher than IPM led by brand equity, it says.
The brokerage house says US business will gain on cost arbitrage and low base, but both short-term opportunities at best.
With margin/return on capital employed compression and premium valuations, Ambit sees downside risk to bull case Street expectations.
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