Buy, sell, hold: 8 stocks to watch out post Q3 results

Lupin

Bank of America Merrill Lynch has reiterated Lupin as its top pick in sector on account of near trough valuations, with increased target price at Rs 1,920 from Rs 1,865 after strong beat on earnings and better visibility on pipeline.

Goldman Sachs revised FY17-19 EBITDA by 4-6 percent to factor in margin development and raised target to Rs 1,612 from Rs 1,541. The brokerage house feels product launch rate is a key upside risk for the stock while price erosion and execution at Gavis are downside risks.

Nomura remained neutral on Lupin, with target at Rs 1,626 as 13.1 percent profit growth was lower than its estimate due to higher tax payment. India business recorded double-digit YoY growth despite demonetisation and near-term earnings trajectory looks good, it says.

Cairn India

CLSA cut FY17 EPS estimates by 10 percent and raised FY18/19 EPS by 6/7 percent, though it retained buy call on the stock, with increased target price at Rs 340 from Rs 315. Cost savings will enhance return profile, it feels.

Power Grid

CLSA says Power Grid's best is yet to come in terms of capitalisation and estimates 50 percent rise in regulated equity over FY16-19. The brokerage house has reiterated buy call on the stock, with increased target at Rs 238 from Rs 225 as it feels valuations are inexpensive despite a 39 percent rally in one year.

Kotak Institutional Equities says Power Grid offers strong visibility with 16 percent CAGR over 2 years, while maintaining buy rating on the stock, with increased target at Rs 230 from Rs 210.

BPCL

Bank of America Merrill Lynch has retained underperform rating on BPCL, with increased target at Rs 621 from Rs 610 as Q3 earnings were strong Q3 on gross refining margin (GRM) but marketing disappointed.

Goldman Sachs says BPCL's Q3 core earnings were below expectations, but in line with consensus. GRM was at USD 5.90 a barrel against its expectation of USD 7/barrel while core marketing margins were flat sequentially.

Bank of India

CLSA has maintained sell rating on Bank of India given high stressed loans & low profitability, with increased target price at Rs 100 from Rs 65. It slippages are stabilising, but stressed-loan ratio remained high. Key positive was 38 percent YoY rise in CASA deposits.

Macquarie says core operating performance of the bank remained under pressure with high credit costs and expects bank to report lower losses for FY17 due to trading gains. The brokerage house has maintained underperform rating on the stock, with increased target at Rs 85 from Rs 53.

Kotak Institutional Equities has retained add rating on the stock, with increased target at Rs 150 from Rs 140 as it sees signs of recovery in most troubled corporate exposures for bank. Returned to profit was led by strong treasury gains and slippages were at a 9-quarter low, the brokerage house says.

Sun Pharma

Goldman Sachs says Sun Pharma subsidiary Taro's net income was in-line despite topline miss. Sale of Keveyis in December helped bring PAT performance in-line, it feels.

Tata Steel

With maintaining outperform rating on the stock, with target at Rs 560, Credit Suisse says 100 million pound sale of UK specialty steels business was small but significant.

Page Industries

Kotak Institutional Equities say Page Industries remains a solid-but-expensive story, while upgrading to reduce from sell, with increased target at Rs 13,000 from Rs 11,500. Note ban impact mitigated by improved sales mix & higher realisations, it feels.