Brokerage: CLSA | Rating: Outperform | Target: Rs 620
CLSA upgraded Titan Company to buy from outperform earlier over the weekend and has also raised its 12-month target price to Rs620 from Rs 555 earlier as the goods & services tax (GST) rate was lower than expectations which remove an overhang from the stock.
Months of speculation and suspense is finally over as the GST rates on gold and diamond jewellery have been finalised at 3 percent. “Titan currently pays an over 2 percent effective tax rate, so this is only a marginal increase but the outcome is much better than expectations of as much as 6 percent,” said the CLSA report.
Improved compliance under GST will also create a level playing field and help the organized sector, including Titan. “We remain positive on the stock and upgrade our rating from outperform to BUY and lift our target price from Rs555 to Rs620 (45x March 2019),” added the note.
Brokerage: CLSA | Rating: Buy | Target: Rs 2,120
The brokerage observed that Larsen & Toubro’s digital initiatives could expand its margin by 100 basis points. It believes that the infrastructure major has a credible strategy to improve its growth and return on equity (RoE).
Brokerage: CLSA | Rating: Sell | Target: Rs 240
The brokerage firm expects operating performance to remain weak in the current fiscal. It sees rise in cost as full impact of wage hike will come through. Further, it believes that the earnings downgrade is not over yet.
Brokerage: Credit Suisse | Rating: Outperform | Target: Rs 640
The brokerage believes that an uncertainty around merger or acquisition involving ONGC is an overhang. It sees a stake sale of the company to ONGC as the most likely outcome. This stake sale will have no adverse impact on business.
Brokerage: Credit Suisse | Rating: Neutral | Target: Rs 15,000
The research firm believes that the GST rate for garments below Rs 1,000 at 5 percent will be beneficial for the manufacturer of Jockey brand in India.
“This is a reduction of 3-4% for Page compared to the current taxation, as opposed to the risk of an increase, which was expected. We expect Page to pass on the lower rates to consumers, and the lower prices should lead to an uptick in volume growth for the company,” the global research firm said in a report.
With the GST rate risk ceasing to exist along with 15 percent underperformance by the stock, Credit Suisse sees no downside. It also increased the target price to Rs 15,000 from Rs 12,800, implying an upside of over 17 percent. The earnings estimates were also increased by 4-5 percent.
GST Rate
Brokerage: Goldman Sachs
Levying GST on raw materials for beedi is a significant step, it feels. Higher cost of doing Beedi a positive for cigarette volumes of ITC. The 3 percent rate on gold and diamond is positive for the organized sector.
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