Brokerage: Macquarie | Rating: Underperform | Target: Rs 370
The company’s EBITDA beat was driven by significant surprise in India and Europe margins, said Macquarie. The guidance of no capex expansion in this fiscal and UK pension talks being in final stages are key positives for the company, it said. Macquarie sees Q4FY17 as the peak of margins and earnings and any near term rally is a chance to exit.
On margins, it does not feel that current levels are sustainable. The contraction in margin in India and Europe business are key catalysts for the stock, it added.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 575
Morgan Stanley believes that earnings momentum, though currently strong, may moderate from current levels. The better than expected momentum in the FAMD (Ferro Alloys and Minerals Division) business in current quarter is a positive.
Brokerage: CLSA | Rating: Buy | Target: Rs 570
The brokerage observed that the firm witnessed strong margin expansion in both India and Europe in Q4. Margins are likely to recede from Q4, but expectations for FY18 still get a lift. If UK Pension negotiations go through, chances of a joint venture with ThyssenKrupp brighten, it feels. Overall, it remains positive on the firm given pension talks and improving industry environment.
Brokerage: JPMorgan | Rating: Overweight | Target: Rs 690
The global brokerage has increased FY18-20 earnings per share (EPS) estimates by 7-8 percent. It believes that any JV in Tata Europe should drive a re-rating and hence there is an upside to the target price. Meanwhile, downside risks include collapse in margins in India and Europe businesses.
Brokerage: Emkay | Rating: Hold | Target: Rs 453
Emkay has revised volume and margins estimates for the domestic business. It believes that current performance will be tough to repeat given RM volatility and steel prices.
Brokerage: Nomura | Rating: Neutral | Target: Rs 180
With recent re-rating, it believes asset quality improvement is factored into price. It feels that the focus will now shift to core PPOP/assets, which will likely remain under pressure. It prefers SBI among PSU banks. Nomura sees stress resolutions to be driven by taking fair haircuts rather than upgrades.
Brokerage: Citi | Rating: Buy | Target: Rs 170
An improvement in Q4 asset quality was accompanied by an increase in coverage ratio, it said. The bank is making progress in addressing these quality issues, the global financial services firm observed. Return to higher growth along with larger asset resolutions will be the key, it added.
Brokerage: CLSA | Rating: Sell | Target: Rs 160
High stress loans and low return on assets is driving the sell rating on the stock. A speedy recovery of NPLs and smooth management transition will be the key. It has lowered earnings estimates for FY18-19CL on lower margin and higher provisions
Brokerage: Credit Suisse | Rating: Underperform | Target: Rs 118
The bank will require large dilutions, given CET-I is down to 7.9 percent, while stressed asset cover is at 30 percent. It cut EPS by 7-8 percent as it build in dilution in FY18.
Brokerage: Morgan Stanley | Rating: Underweight | Target: Rs 92
The brokerage observed that headline earnings missed estimates despite positive surprise on pension provision. It expected margin to improve in this quarter on lower regulatory drags.
Brokerage: Kotak | Rating: Reduce | Target: Rs 165
Expense reversal and treasury gains drove earnings outperformance, the brokerage house highlighted. It said that the company had a strong liability franchise with over 46 percent CASA ratio, which was a key positive for the bank.
Brokerage: Goldman Sachs | Rating: Sell | Target: Rs 125
Goldman Sachs observed that asset quality risks persisted, and fresh slippages 150 percent higher than estimates. Higher provisions are likely to be driven by ageing of NPLs. Improvement in asset quality, faster credit growth are key risks for the stock.
Brokerage: Jefferies | Rating: Hold | Target: Rs 160
It sees impairments, weak recovery as key downside risks to the stock. Meanwhile, lower NPLs, higher recoveries are key upside risks to the stock.
Brokerage: Citi | Rating: Neutral | Target: Rs 20,500
The brokerage prefers ACC, Ambuja, UltraTech and Grasim in the cement space. It raised earnings before interest, taxes, depreciation and amortisation (EBITDA) by 1-5 percent on higher prices/volumes offset by costs.
Brokerage: CLSA | Rating: Underperform | Target: Rs 18,000
The brokerage believes that it is still one of the best wealth creators in the sector due to strong execution.
Brokerage: JPMorgan | Rating: Neutral | Target: Rs 18,000
Operating earnings were in line, while volume and realisation beat was offset by sharp cost increase.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 20,550
An improvement in prices in North should aid realisations and EBITDA in the ensuing quarters. It observed that higher costs lead to EBITD miss in Q4.
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