According to Nomura, the overhang of whistleblower allegations is now behind and will prefer Infosys to TCS on valuations basis
After hitting record high on January 14, the market cooled off little bit and broke the fourth day consecutive winning streak on January 15 but Nifty managed to close above 12,300 level.
On January 15, the market recovered from the day's low and ended with moderate losses amid signing of an initial US-China trade deal and earnings from India Inc.
Except Nifty Bank and Energy other indices witnessed a buying interest led by the auto, metal, pharma and FMCG. Meanwhile, BSE Midcap and Smallcap outperformed the benchmark with a gain of 0.6 percent and 1 percent, respectively.
Here are 5 stocks in which brokerages have raised their target prices:
Citi | Rating: Buy | Target: Raised to Rs 865 from Rs 830 per share
Kotak | Rating: Add | Target: Raised to Rs 865 from Rs 840 per share
HSBC | Rating: Buy | Target: Raised to Rs 810 from Rs 800 per share
According to Nomura, the overhang of whistleblower allegations is now behind and will prefer Infosys to TCS on valuations basis.
It expect margin to stabilise at 22 percent over FY20-22 and expect company to post 8.1%/7.3% rev/EPS CAGR over FY19-22.
The Q3 revenue was slightly below, while margin was in-line with estimates. The attrition was lower while guidance revision is positive, said Citi.
The estimates are largely unchanged, while raise the multiple to 21x from 20x, Citi added.
According to Kotak the company delivered robust yet in-line results. It has reported good operating metrics with increase in the number of large accounts.
Kotak feels that the company can sustain/exceed peer-level growth with stable margins. The valuations are attractive at current levels.
Mindtree | Brokerage: Kotak Institutional Equities | Rating: Reduce | Target: Raised to Rs 830 from Rs 725 per share
An increase in target captures 6-14 percent increase in FY20-22EPS. The company has built up close to USD 887 million of cash flow hedges at average Rs 75.44/USD, said Kotak Institutional Equities.
The cash flow hedges drive EPS revision and 80-90 bps increase in margin assumption, it added.
Wipro | Brokerage: Morgan Stanley | Rating: Underweight | Target: Raised to Rs 240 from Rs 233 per share
Research house raised FY20-22 EPS estimates by 1-3 percent, largely to reflect slightly better margins. The muted revenue growth and uncertain macro environment merit a P/E of 13x.
The underperformance to peers may continue, feels Morgan Stanley.
IndusInd Bank | Brokerage: Citi | Rating: Buy | Target: Raised to Rs 1,900 from Rs 1,800 per share
The company's core operating performance remains healthy. The core operations to remain strong which can support higher provisions, said Citi.
It has changed FY20/21 PAT estimates by -2%/+3% to adjust NIM & credit costs.
Cadila Healthcare | Brokerage: Citi | Rating: Sell | Target: Raised to Rs 240 from Rs 220 per shareThe rate sell on high product concentration is a risk in US generics business, while recent acquisition of Heinz India could be an overhang on the stock, said Citi.
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