Brokerage: Ambit | Rating: Sell | Target: Rs 441
Ambit believes that wedding jewellery will drive the company’s same store sales growth (SSSG), given the reduction in impact of demonetisation. It also said that jewellery business was in top gear, while margins lagged for the firm.
The Return on Equity (RoE) will remain capped at 25 percent despite revenue CAGR of 17 percent over FY17-22. Its current valuation reflects 17 percent EPS CAGR over FY17-20 on low margin.
Brokerage: Kotak | Rating: Reduce | Target: Rs 430
Kotak earnings per share (EPS) estimates for FY18/19 go up 2-3 percent as it raised revenue assumptions sharply. EPS forecasts for FY18 and FY19 stand at Rs 12.4 and Rs 14.4. The brokerage also raised revenue estimates by 8-9 percent for FY18/19. It also cut margin forecasts to accommodate management’s aggressive growth-centric outlook.
Brokerage: CLSA | Rating: Outperform | Target: Rs 555
CLSA believes that Titan is a strong play on urban discretionary consumption. The key risk to the stock remains to be the final rate under GST. While jewellery focus would be on growth, efforts will be to sustain current margin, the brokerage added.
Brokerage: Deutsche Bank | Rating: Call | Target: Rs 510
Current gold rates, GST rate of 5 percent and PAN limit reduction are the key risks to the stock. It raised FY18-19 EPS by 2/8 percent.
Brokerage: JPMorgan | Rating: Neutral | Target: Rs 500
The global financial firm believes that the current valuation is discounting much of the optimism. A further acceleration in growth rates is a key upside risk to the stock. Meanwhile, higher GST rates, impacting demand, could be a key downside risk to the stock.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 550
Morgan Stanley said that Titan was its top pick in consumer discretionary space. It believes GST implementation, strong jewellery business could drive earnings ahead. On its March performance, it observed that 55 percent revenue growth in jewellery business was the key highlight for the firm. Customer acquisition of Tanishq will structurally drive growth trends higher.
Brokerage: CLSA | Rating: Buy | Target: Rs 1,920
CLSA observed that the bank’s annual report showed divergence in assessment of NPLs between the management and the Reserve Bank of India (RBI) in FY16.
The bank’s stressed loan ratio rose from 1.6-3 percent, but is much lower than the sectors’ 13 percent. It is also scaling up its retail franchise with 16 percent branch growth and an employee growth of 34 percent. Meanwhile, losses in retail widened with investment and hence ramp up is the key. It sees 25 percent profit CAGR led by topline and steady credit costs over FY17-20.
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 1,700
Deutsche Bank said that divergences as of March 2017 may lead to higher than expected NPL and credit costs in FY17. It does not see much risk to the earnings as FY16 divergence is already accounted.
Brokerage: Morgan Stanley | Rating: Underweight | Target: Rs 5,700
The global financial service firm observed that Nestle India had an operationally weak quarter, but lower tax rates cushioned the earnings. It expects only a gradual recovery in revenue growth trends. It is underweight due to continuing weak growth trends across infant nutrition, coffee and chocolates. It reiterated its long held view that packaged foods in India may be nearing an inflection point. It also sees downside risks to valuation if volume growth across portfolio, including Maggi, lacks recovery.
Brokerage: JPMorgan | Rating: Underweight | Target: Rs 6,000
JPMorgan said that exports were impacted by lower sales to Nepal and Bhutan. Other operating income increased sharply due to timing differences of export incentives, it said in its report.
Brokerage: Kotak | Rating: Sell | Target: Rs 5,700
The brokerage has kept revenue and profit after tax (PAT) estimates for CY17-19 broadly unchanged. It continues to build aggressive assumptions into its model. The EPS estimates for the current and next calendar year stand at Rs 125 and Rs 150.
Brokerage: Kotak
Kotak said that Volume surge in both voice and data with Jio in the backdrop is encouraging. Meanwhile, cost optimisation was the highlight of the quarter, it added.
Brokerage: CLSA | Rating: Sell | Target: Rs 100
CLSA believes that an improvement in NPL coverage ratio to 38 percent QoQ was a key positive in Q4. It has lower earnings estimates for the current and next fiscal to build in a slightly lower topline and higher credit costs.
Brokerage: CLSA | Rating: Buy | Target: Rs 3,280
The brokerage house observed that there were signs of recovery in US launches and risk reward was favourable in the stock. It said that FY17 was the worst year in the company’s history with multiple challenges across businesses. It cut FY18/19 EPS by 17/9 percent.
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