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Foreign brokerages raise target price for 10 stocks post Q3 numbers; do you hold any?

The short-term trend remains weak with support for Nifty is coming near 12000-11950 zone, experts say.

January 30, 2020 / 01:42 PM IST
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Todays L/H

Bulls made a comeback on January 29 after two straight days of selling amid worries over Coronavirus, which dented investor sentiment along with December quarter earnings from India Inc.

The short-term trend is still weak with support for Nifty near 12,000-11,950 zone, experts say.

"Markets are likely to remain volatile ahead of the Union Budget on Saturday where the market is expecting measures from the government to lift economic growth. Investors would also await US Fed meeting outcome. Further, there is also the monthly F&O expiry this week just ahead of Budget which could add to the volatility," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Private.

Here are 10 stocks for which foreign brokerages raised their target price after their December quarter numbers:

HDFC | Brokerage: Jefferies | Rating: Buy | Target: Raised to Rs 2,745 from Rs 2,510 per share


The investment gains were partly used to buffer up provision coverage. The loan growth was muted in non-retail, while retail loans did better. Company is better placed in a tough macro environment, said Jefferies.

Research house largely maintain its loan growth and margin estimate for FY21/22, while FY20 EPS estimate raised by 54.3 percent & FY21-22 by 1-3 percent.

PNB Housing | Brokerage: Jefferies | Rating: Hold | Target: Raised to Rs 525 from Rs 505 per share

According to Jefferies, the NII growth and provisions were disappointed. The gross NPA rose sharply, led by rises in retail & corporate NPAs.

Proposed equity issuance could ease gearing issues and still see challenges to loan growth, it added.

It see a risk of more slippages in the developer book and cut FY20-21 estimates by 6-23 percent.

InterGlobe Aviation | Brokerage: Ambit | Rating: Buy | Target: Raised to Rs 1,993 from Rs 1,823 per share

The company's results were head of expectations driven by higher RASK (revenue per available seat-kilometre) & lower other expenses.

The 20 percent ASK growth in FY21 is below our expectation but not a concern, said Ambit.

Company's EGM on 29 January is a key near-term share price catalyst and raise FY20-22 EBITDA estimates by 15-20 percent, it added.

Torrent Pharma | Brokerage: CLSA | Rating: Outperform | Target: Raised to Rs 2,050 from Rs 1,950 per share

According to CLSA, revenue & EBITDA missed in the third quarter, while higher other income & low tax rate boosted the profit of the company.

The supply-chain issues w.r.t EU should be resolved by March. The US revenue was flat QoQ & will likely decline in FY21, CLSA said.

US FDA issues at its key manufacturing sites will take time to resolve, while India will be a key medium-term growth driver and raise FY20 EPS estimate by 3 percent, it added.

Dr Reddy's Laboratories | Brokerage: Ambit | Rating: Buy | Target: Raised to Rs 3,615 from Rs 3,217 per share

The improved cost base drives 7 percent/15 percent raise in our EPS estimates and R&D expense increase to be lower than sales movement in FY21/22, said Ambit.

The optimal expenses will boost FY21/22 margin by 140bps/180bps, it feels.

ICICI Bank | Brokerage: JPMorgan | Rating: Overweight | Target: Raised to Rs 650 from Rs 560 per share

The headline Q3 print was mixed, while operating profit was strong and recoveries improved.

The domestic loan / deposit growth was offset by a higher slippage. The cumulative 9-month slippage of 2.1 percent still well within our tolerance limit, said JPMorgan.

The FY21/22 EPS estimates are increased 1.4 percent/4.5 percent, it added.

Bank of Baroda | Brokerage: JPMorgan | Rating: Neutral | Target: Raised to Rs 100 from Rs 95 per share

Brokerages house change its FY21/22 EPS estimates by -11 percent/0 percent and modelling a higher credit cost assumption for FY21.

The company's operating profit assumptions are largely unchanged, while slippages driven by divergence & HFC.

UltraTech Cement| Brokerage: Morgan Stanley | Rating: Overweight | Target: Raised to Rs 5,350 from Rs 5,000 per share

The third quarter numbers were in-line, but trends & commentary show signs of demand revival.

Company remains our preferred pick within our cement coverage, while demand seen in December to be sustained over the coming months, feels Morgan Stanley.

JSW Steel | Brokerage: Jefferies | Rating: Underperform | Target: Raised to Rs 199 from Rs 180 per share

The company's Q3 group EBITDA missed research house estimate, while net debt eased marginally on QoQ basis.

Dolvi expansion is delayed by 3-6 months. On the other hand, rebound in steel prices should drive stronger margin in Q4.

Biocon | Brokerage: Goldman Sachs | Rating: Buy | Target: Raised to Rs 350 from Rs 317 per share

The company's sales/EBITDA driven by solid performance in biologics segment. The recovery in branded formulations profitability also helped topline/EBITDA of the company.

The ramp-up/launches to aid biologics segment in 2020, while brand formulations challenges in end markets to remain. FY20-FY22 EPS estimates down by 1-2 percent.
Rakesh Patil
first published: Jan 30, 2020 01:42 pm
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