Brokerage: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 525
The global research firm feels that the company is firmly placed on the growth track. It raised revenue growth forecast for India as a result. It expects overall value growth to remain strong. The firm also raised Raise Samvardhana Motherson Automotive System Group BV’s EBITDA margin By 50 basis points for FY19 to 10 percent against 7.8 percent in FY17. Further, it believes incremental spends are likely to taper off as two plants come on stream in the second half of this fiscal.
Brokerage: Credit Suisse | Rating: Neutral
The brokerage house said that it was unexcited on the stock despite underperformance on modest capacity progress and sectoral risks. The neutral stance was given the low return on equity is still far out. Higher prices for incremental power than renewable may hurt commercialization, it added.
Brokerage: Kotak Securities | Rating: Neutral | Target: Rs 1,000
The brokerage highlighted that the company’s quality of earnings deteriorated despite modest growth in FY17. There are positives which abound the stock, but earnings per share (EPS) valuation at 41 times FY19 appears priced in.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 619
The research firm expects US approval cycle to intensify after its Moraiya resolution issues have passed. It expects over 40 approvals out of 200 in the next 12-15 months. Several niche products and operating leverage give strong earnings visibility, it added.
Brokerage: JPMorgan | Rating: Underweight | Target: Rs 70
Revenue dis-synergies of Idea-Vodafone merger increase in a difficult industry environment, the brokerage said in its report.
Brokerage: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 545
BofA-ML sees risks in the near-term, but long-term outlook remains robust. It highlighted that the company’s MEP business was improving, but an exposure to Qatar was a key risk, it added. It expects MEP sales growth to accelerate to 13 percent and margins
to expand to 6 percent over FY18-19.
Brokerage: JPMorgan | Rating: Overweight | Target: Rs 1,075
JPMorgan said that finding the right balance between centralization and decentralization is critical. It highlighted that Sandeep Dadlani quitting the company is both surprising and worrying.
Brokerage: JPMorgan | Rating: Overweight | Target: Rs 690
The brokerage said that monetisation of Rs 3,800 crore TTMT stake was a positive development. The company is ideally positioned as a stock, given the confluence of global industry tailwinds. Further, it expects domestic earnings to pick up with a rise in volumes and margins.
Steel
Brokerage: Credit Suisse
The brokerage said that domestic steel prices in China continue to see a recovery and an improvement in mill-utilisation levels are helping spreads recover to SUD 300 per tonne. It said that net exports out of China were benign. In fact, May figures imply sub 70 million tonnes run rate. It was not worried about Q1 realisations in India and could be similar to Q4 realisations. The brokerage house likes Tata for upcoming catalysts, as well as JSW for its strong operating cash flows. This is base don its 90 percent plus utilization.
Autos
Brokerage: Credit Suisse
Credit Suisse observed that supply of unorganised goods seems to have dried up in the last month or so. It sees some amount of destocking due to near-term demand due to GST disruption.
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