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CLSA expects promoters to participate in the tender offer of TCS and sees 2.85 percent acceptance ratio. The brokerage house expects EPS impact to be small 0.1 percent but return on equity to increase by 600 bps and expects company to elaborate its long-term capital return strategy with higher returns.
While maintaining underperform rating on TCS with a target price at Rs 2,130, Bank of America Merrill Lynch says in case of promoter non-participation, acceptance ratio will still be over 9 percent. Defined capital allocation strategy may work better, it feels.
BoAML expects annual payout ratios to move to 80 percent on defined basis. Event risk from changes to H-1B program remained and any demand recovery due to potential H1-B Hurdles is likely only in second half of CY17, it says.
While retaining its neutral call on the stock with a target price at Rs 2,408, Macquarie says investors could press for increase in payout ratio and expects FY18 EPS to rise over 1 percent but that may partly offset by lower other income.
According to Macquarie, clarity on client budgets is a key catalyst for the stock. It expects CY17 to be dominated by return of capital to shareholders and visa reform in US. Its pecking order in large cap IT players is HCL Technologies, Infosys, TCS, Tech Mahindra and Wipro.
JPMorgan says TCS buyback is more generous than it expected on both quantum & price. It awaits articulation of a structured capital return policy. It has neutral call on the stock with a target of Rs 2,450.
Morgan Stanley says TCS buyback can't trigger re-rating; business prospects must improve. Buyback will lead to lower net income of 2.7 percent and may help return on equity by about 200 bps, it feels. The brokerage house has equal-weight rating on the stock with a target price at Rs 2,300.
Tata Consultancy Services board on Monday announced buyback of up to 5.6 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore. The buyback offer constitutes 2.85 percent of total paid-up equity share capital. The buyback price has been set at Rs 2,850 per share.
With maintaining hold rating on Havells with a target price of Rs 374, Deutsche Bank says Lloyd division acquisition can complement AC and consumer durables portfolio.
Lloyd buy was below company valuations & does not have value for potential benefits, it feels.
JPMorgan says Lloyd deal provides a big leap for Havells in the white goods industry and provides brand & distribution for the company.
The brokerage house says Lloyd acquisition valuation is reasonable and expects EPS accretion from FY19. It is overweight on the stock, with a target price of Rs 455.
Havells acquired Lloyd's consumer durable business for Rs 1,600 crore.
With retaining hold rating on Ambuja Cements with a target price of Rs 216 given the strong balance sheet, Deutsche Bank says Q4 earnings were in line with expectation and market share loss remained worry.
Stock valuations on replacement cost basis looks cheap at USD 136 per tonne enterprise value, it feels.
Macquarie is neutral on Ambuja, with revised price target downward to Rs 242 from Rs 260. Q4 EBITDA growth of the company surpassed expectations, which was led by 15 percent reduction in energy cost.
The brokerage house expects gradual demand uptick and focus on improving operational efficiencies to continue. It cut CY17 & CY18 standalone EBITDA estimate by 11 percent & 7 percent, respectively.
Citi has a buy call on Ambuja Cements, with increased target price at Rs 280 from Rs 235. It expects demand recovery in the later part of FY18 and raised CY17/18 EBITDA by 34 percent/22 percent.
Goldman Sachs raised CY17-19 EPS by 4-14 percent as it cut cash cost per tonne by 3 percent. Hence, it raised target price to Rs 192 from Rs 177.
Goldman says Ambuja will continue to lose market share due to lack of capacity addition and growth will be capped due to exposure to slower growing western India. Company's EBITDA per tonne increase will be lower than UltraTech's in mid-term, it feels.
CLSA downgraded the stock to sell from underperform, with a target price at Rs 215. Volume decline of 8 percent YoY in Q4 was a disappointment and worried about near-term pricing outlook, ti says.
Citi has a buy rating on BPCL with a target price of Rs 800 as it remained a trendsetter amongst the oil marketing companies.
JPMorgan is neutral on ONGC, with a target price of Rs 215.
CLSA feels Vedanta is trading at an attractive 6 percent FY18 dividend yield on estimates. It says the company must increase its dividend outgo starting FY18.
It has a buy call on the stock with a target price at Rs 300.
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