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Foreign brokerages bet on these large & smallcaps; do you own any?

PVR, Tata Motors, Kajaria Ceramics are among the six buying ideas by foreign broking firms

January 23, 2021 / 11:39 AM IST
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On January 22, benchmark indices witnessed profit booking on the second day in a row pulling Nifty below 14,400. However, these six large and smallcaps are on the radar of the foreign brokerages:
Tata Steel | Brokerage: Jefferies | Rating: Buy | Target: Rs 850. Tata Steel BSL has reported strong Q3 results with EBITDA up 47 percent QoQ. The sales volumes at 1.1 mt, down 10 percent QoQ but ASPs improved 18 percent QoQ, while EBITDA/t expanded 63 percent QoQ to Rs 14,100. The strong performance has a positive read through for Tata Steel & JSW Steel, reported CNBC-TV18.
Tata Steel | Brokerage: Jefferies | Rating: Buy | Target: Rs 850. Tata Steel BSL has reported strong Q3 results with EBITDA up 47 percent QoQ. The sales volumes at 1.1 mt, down 10 percent QoQ but ASPs improved 18 percent QoQ, while EBITDA/t expanded 63 percent QoQ to Rs 14,100. The strong performance has a positive read through for Tata Steel & JSW Steel, reported CNBC-TV18.
Tata Motors | Brokerage: CLSA | Rating: Buy | Target: Rs 290. The building confidence of a turnaround could lead to a valuation rerating. The buy rating is premised on our expectations of a turnaround at JLR & India business. The conservative on its valution relative due to its underperformance in last 5 years. The resultant bull case valuation (Rs 500) implies 104 percent upside from current levels, reported CNBC-TV18.
Tata Motors | Brokerage: CLSA | Rating: Buy | Target: Rs 290. The building confidence of a turnaround could lead to a valuation rerating. The buy rating is premised on our expectations of a turnaround at JLR & India business. The conservative on its valution relative due to its underperformance in last 5 years. The resultant bull case valuation (Rs 500) implies 104 percent upside from current levels, reported CNBC-TV18.
Mindtree | Brokerage: Goldman Sachs | Rating: Buy | Target: Rs 1,998. Company has reported better-than-expected Q3 revenue & margin, leading to operational beat. Its revenue growth is highest Q3 growth in over a decade & margin is at an 11-year high. The improvement in parameters like offshoring, higher utilisation led to this margin beat. Research house increased its FY21-23 EPS estimates by 5 percent/1 percent/1 percent and forecasted 17.5 percent margin for company over FY21-23, reported CNBC-TV18.
Mindtree | Brokerage: Goldman Sachs | Rating: Buy | Target: Rs 1,998. Company has reported better-than-expected Q3 revenue & margin, leading to operational beat. Its revenue growth is highest Q3 growth in over a decade & margin is at an 11-year high. The improvement in parameters like offshoring, higher utilisation led to this margin beat. Research house increased its FY21-23 EPS estimates by 5 percent/1 percent/1 percent and forecasted 17.5 percent margin for company over FY21-23, reported CNBC-TV18.
Kajaria Ceramics | Brokerage: UBS | Rating: Buy | Target: Raised to Rs 925 from Rs 700. The strong recovery aided by market share gain and raise FY21-23 EPS estimates by 31-42 percent. It has reported strong pick-up in domestic tile sales in tier-2/3 cities & rural areas, reported CNBC-TV18.
Kajaria Ceramics | Brokerage: UBS | Rating: Buy | Target: Raised to Rs 925 from Rs 700. The strong recovery aided by market share gain and raise FY21-23 EPS estimates by 31-42 percent. It has reported strong pick-up in domestic tile sales in tier-2/3 cities & rural areas, reported CNBC-TV18.
HCL Technologies | In FY21 so far, the stock has jumped 125 percent to Rs 983.65 as on January 19, 2021 from Rs 436.75 as on March 31, 2020.
HCL Technologies | Brokerage: CLSA | Rating: Buy | Target: Raises to Rs 1,180 from Rs 1,120. The software business gains traction with strong deal pipeline. It has reported healthy revenue & margin beats in Q3. Company expects the orderbook to scale further after a 13 percent YoY jump in Q3. The operating leverage in mode 2 & 3 business gives a structural margin defence. CLSA increased FY22/23 EPS estimates by 3 percent, while it remains top sector pick, reported CNBC-TV18.
PVR | Foreign portfolio investors raised stake in company to 38.5 percent in December quarter from 34.6 percent in September quarter.
PVR | Brokerage: CLSA | Rating: Buy | Target: Raises to Rs 1,805 from Rs 1,770. The Q3 EBITDA loss declined 7 percent QoQ amidst staggered multiplex reopenings. The company has rent settlements in 88 percent of its cinemas, while Q3 fixed-cost reductions of 63 percent YoY were ahead of estimate. The staggered re-openings has delayed the new bollywood movie releases. With company’s challenge of near-term occupancy, CLSA forecast 30 percent only by FY23. The company management plans Rs 800 crore equity raise to boost liquidity and company is likely to lead sector growth & consolidation, reported CNBC-TV18.
Rakesh Patil
first published: Jan 23, 2021 11:38 am

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