Nomura has fixed a target price of Rs 3,040 for the stock and said that it expects weakness in some of the core businesses such as Naukri & 99acres.
Brokerages have termed the June quarter numbers an aberration, say the trajectory of volume recovery and development on regulations are key monitorables.
The Reserve Bank is likely to pause at the upcoming policy review in August and cut rates by 25 basis points each in the October and December reviews, the Japanese brokerage said.
According to Fitch, further negative rating action could be triggered by a structurally weaker growth outlook from financial stability concerns or a stalling of reform implementation.
The economy will grow at 3.2 percent in the January-March period and contract by 6.1 percent (June quarter) and 0.5 percent September quarter, before rising by 1.4 percent in the last quarter of the calendar year, it said.
Indian road infrastructure is a big opportunity which investors can’t afford to miss as there is more than Rs 8.5tn or Rs 8.5 lakh cr in the Central government pipeline alone.
The Japanese financial services major also believes that the first quarter of 2020 will see a "weak" uptick in GDP growth at 4.7 percent.
The MPC maintained its “accommodative” policy stance, implying that the next policy action will either be another pause or a cut, Nomura said in its report on RBI policy
Brokerage firms are of the view that the results are a mixed bag, but the stock is a good proxy to play the domestic growth story
Mukherjee feels the market could trade between 17x and 18x one-year forward earnings
Top five stocks according to Nomura are ICICI Bank, Axis Bank, L&T, Concor and State Bank of India
Global slowdown, tight financial conditions and political uncertainty in the election year will be the biggest headwinds for growth, the report by Japanese brokerage Nomura has said.
The RBI had on Thursday released the minutes of the MPC, the first under the governorship of the career bureaucrat- turned-central banker Das, which showed a tilt to accommodate growth concerns as inflation cools off.
The monetary and fiscal policies have shifted to easing mode, although it remains cautious on their near-term impact.
Most global brokerage firms see another rate cut by the central bank but at the same time suggested investors remain cautious as transmission of rates will be the key.
"The factors that will affect growth in 2019 are global slowdown, which will impact exports, manufacturing, and the overall investment climate; tight financial conditions and election uncertainty," Nomura India economist Aurodeep Nandi told reporters here.
Credit Suisse maintained its underperform rating on Lupin with a target price of Rs 800 while CLSA maintained its sell rating on Ashok Leyland and slashed its target price to Rs 75 from Rs 85 earlier.
Nomura maintained its buy rating on RIL post Q3 results with a target price of Rs 1480 while CLSA maintained its buy rating on HDFC Bank Ltd post Q3 results and also raised its 12-month target price to Rs 2730.
The swap ratio appears fair in respect to Dena Bank owing to the multiple challenges faced by the bank, and most experts feel that Vijaya Bank shareholders have nothing to gain from this merger.
Global investment banks such as Nomura, Deutsche Bank and CLSA feel that the exit polls might have got BJP thinking on its strategy but the final outcome will be very different.
According to the global financial services major, emerging markets are under pressure as investors re-assess the risks amid monetary policy normalisation in developed markets, trade protectionism and China's economic slowdown.
According to the global financial services major, India's economic recovery has peaked and growth rates are likely to get constrained in the second half of this year.
On Tuesday, the central bank had announced a Rs 1,000 -crore OMO , where it is buying five government securities.
Noting that any MSP hike is inflationary, the report said, "The proposed hike still leaves the MSPs far from maximum and are thus less populist than they appear."
"Third quarter of this fiscal (3QFY18) is likely to be a weak quarter, in line with seasonality (due to lower working days/shutdowns), with 1.2 percent quarter-on-quarter and 7.3 percent year-on-year growth in constant currency terms," Nomura said in a research note.