CLSA has maintained its buy rating on Arvind with increased target price at Rs 538 (from Rs 440 per share) but reduced FY18/19 EPS estimates by 16/2 percent.
Bharti Airtel
Brokerage - HSBC | Rating - Buy | Target Rs 575
While maintaining buy call on Bharti Airtel with a target price of Rs 575 per share, HSBC said it believes company's operations in Africa have further upside.
The company may be keen to unlock value in its African operations sooner rather than later, according to the research house.
HSBC estimates FY17-20 revenue CAGR at 1.4 percent and EBITDA CAGR at 11.1 percent for Africa operations.
Catalysts for Africa are improvement in revenue growth, particularly from data, it said. "The downside risk to our outlook for African operations is lower capex spend."
India remains the priority for Bharti Airtel. Company may lower Africa capex if India recovery is delayed beyond FY19, HSBC feels.
Tech Mahindra
Brokerage - Citi | Rating - Sell
Citi has maintained sell call on Tech Mahindra, saying overall margin is expected to improve over the next few quarters. At 15x FY19, the stock is not cheap, the research house said.
Tech Mahindra will continue to evaluate M&A for capability addition, it feels.
Meaningful surprises are difficult to achieve given the industry headwinds, it said.
Arvind
Brokerage - CLSA | Rating - Buy | Target Rs 538
CLSA has maintained its buy rating on Arvind with increased target price at Rs 538 (from Rs 440 per share) but reduced FY18/19 EPS estimates by 16/2 percent.
Cash flow from brands business is critical to a rerating, it said, adding value unlocking depends on Brand & Retail (B&R) business being able to fund its own growth.
CLSA sees business getting stronger both in textiles & B&R. It values the B&R business at A 22x EV/EBITDA.
SBI
Brokerage - Goldman Sachs | Rating - Buy | Target Rs 396
Goldman Sachs has upgraded SBI to buy from neutral with target price at Rs 396 per share as it feels the bank is best positioned to benefit from improving asset quality cycle.
The research house expects bank’s return on assets to improve to 0.95 percent by FY20 from 0.22 percent in first half of FY18.
It is a prime candidate to get growth capital under government's SOE recapitalisation plan, Goldman said.
Brokerage - Morgan Stanley | Rating - Buy | Target Rs 10,563
Morgan Stanley has overweight call on Maruti Suzuki with increased target price at Rs 10,563 (from Rs 9,102 per share).
"End-market opportunity & superior return on capital employed justifies the valuation," the research house said while maintaining forecast of 22 percent FY18-20 EPS CAGR.
Jet Airways
Brokerage - Edelweiss | Rating - Buy | Target Rs 822
Edelweiss has upgraded Jet Airways to buy from hold and raised target price to Rs 822 from Rs 548 per share as measures initiated by new CEO would turnaround company's stressed financials.
The company is focussing on sustaining growth via cost rationalisation. The strategy is to focus on cost efficiencies & debt reduction, it said.
Edelweiss raised FY18 EBITDAR margin to 16.8 percent from 15.5 percent.
Motherson Sumi Systems
Brokerage - HSBC | Rating - Buy | Target Rs 425
HSBC has maintained buy call on Motherson Sumi with increased target price at Rs 425 from Rs 376 per share as it expects innovation & cross-selling to support business growth.
It is well placed to benefit from increasing role of auto component suppliers, it feels.
With the recent fundraising, Motherson is ready for multiple acquisitions, HSBC said.
The research house said slowdown in global car market and rupee appreciation are downside risks its rating.
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