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Buy, Sell, Hold: 8 stocks on anlaysts' radar on March 26, 2018

Nomura has initiated coverage with Buy call on Tejas Networks and set a target price at Rs 430 per share.
Mar 26, 2018 / 10:56 AM IST
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Todays L/H

Cadila Healthcare

CLSA | Rating - Buy | Target - Rs 450

CLSA has upgraded Cadila to Buy from Underperform and also raised target price to Rs 450 from Rs 440 per share as it expects 16 percent earnings CAGR over FY18-20 with room for positive surprise in the US.

Improving India outlook & a strong US pipeline will drive earnings and long-term drivers include specialty products initiative in US along with novel research.

Nomura | Rating - Buy | Target - Rs 426

Nomura has upgraded its rating on Cadila to Buy from Neutral with reduced target price at Rs 426 from Rs 464 per share.

33 percent correction from 2017 peak is higher than consensus earnings cut of 10 percent for FY18, it said.

It thinks the market is adequately factoring in US market-related uncertainties. It expects launch momentum to remain strong and revised EPS estimates lower by 21/20/13 percent for FY18/19/20.


CLSA | Rating - Buy

While maintaining Buy call on Arvind, CLSA said three-pronged strategy will grow & increase textile business value.

Advanced materials, a business with high entry barriers is gaining traction and the company is poised to gain from recent state government initiatives in favour of garmenting, it added.

Cotton price volatility remains a near-term headwind, it feels.

Coffee Day Enterprises

Citi | Rating - Buy | Target - Rs 350

Citi has a Buy call on Coffee Day Enterprises with increased target price at Rs 350 from Rs 285 per share as the company continued to deliver same-store-sales growth & average sales per day growth in mid-single digits in recent quarters.

"We see a slightly higher-than-usual price hike this April. We believe continuing expansion, lower net additions will aid operating metrics," it said.

While expansion continued, net additions are lower given 70 closures, it added.

Dr Reddy's Labs

Credit Suisse | Rating - Underperform | Target - Rs 1,865

Credit Suisse has maintained its Underperform rating on the stock with target price at Rs 1,865 per share as it expects a sharp cut in consensus earnings for FY19 & FY20.

Subaxone is a key drug & accounts for over 10 percent FY19 profit, it said.

Macquarie | Rating - Neutral | Target - Rs 2,330

Macquarie believes company's US sales will be under the weather for next few quarters. Pending quality issues at Duvvada, Srikakulam, Medak remain an overhang, it said.

The research house has maintained Neutral call on the stock with a target price of Rs 2,330 per share while lowering FY19/20 EPS estimates by 10-12 percent.

Eearly resolution of the Aloxi litigation could provide near-term relief, it feels. Optionality from big-ticket molecules is the key factor, it said.

Power Grid Corporation

Goldman Sachs | Rating - Buy | Target - Rs 226

Goldman Sachs said Power Grid has underperformed Sensex by 11 percent over last six months and this correction presents a god opportunity to add positions.

It believes the stock provides good long-term earnings visibility. Hence the research house has maintained Buy call on the stock with a target price at Rs 226 per share.

Britannia Industries

Goldman Sachs | Rating - Buy | Target - Rs 4,828

Goldman Sachs has reiterated its Buy call on the stock with a target price at Rs 4,828 per share as it continued to believe company will be able to drive margin expansion due to premiumisation.

"We forecast company’s operating cost as percentage of sales will decline 19 percent in FY24 from 23 percent in FY17," it said.


Morgan Stanley | Rating - Overweight | Target - Rs 740

Morgan Stanley has Overweight rating on Cyient with increased target price at Rs 740 from Rs 670 per share as broad-based revenue growth & traction in design led manufacturing (DLM) business should drive further re-rating.

The research house has trimmed FY19 margin estimate by over 80 bps & earnings by 4 percent, but raised FY20 EPS by 2 percent.

It sees downside to consensus but view any weakness as a chance to accumulate.

Tejas Networks

Nomura | Rating - Buy | Target - Rs 460

Nomura has initiated coverage with Buy call on Tejas Networks and set a target price at Rs 430 per share.

The company is one of the world’s leading optical networking products suppliers.

The research house estimates peg India’s optical network market to grow at a CAGR of 8 percent from CY17-22.

It expects international sales to exhibit healthy growth, FY18-20 revenue CAGR of 25 percent and fully diluted EPS CAGR of 42 percent.
Moneycontrol News
first published: Mar 26, 2018 10:56 am

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