Brokerage: Macquarie | Rating: Neutral | Target: Raised to Rs 2,375
The global research firm highlighted that sluggishness continued in banking space, while retail was bottoming out. Meanwhile, deal sizes in digital have begun to rise. It expects dollar revenue growth for the firm and Infosys to converge to 8 percent year on year in FY19. Going forward, it expects the firm to share more granular details of new services lines in the second half.
Brokerage: Kotak | Rating: Reduce | Target: Rs 2,549
The brokerage house highlighted that the firm reported strong margin recovery even as revenue growth disappointed. The constant currency growth of 1.7 percent is lower than estimates of 2.1 percent. Meanwhile, volumes grew 3.1 percent, which implies pricing decline of 140 basis points on a CC basis. It also observed that retail and newly-carved out regional markets were contributing to the weak performance.
Brokerage: Credit Suisse | Rating: Neutral | Target: Rs 2,350
Credit Suisse said that the company’s revenue growth still showed lack of momentum. Having said that, it has been able to make the transition towards digital well, while US, financial services and retail remain soft. Moreover, EBIT margins in-line with its estimates, but higher than consensus.
Brokerage: Deutsche Bank | Rating: Buy | Target: Raised to Rs 3,000
The financial services firm observed that earnings were a beat in the second quarter, and there were early signs of a demand revival. It said that the impact of revenue miss was offset by improvement in operating margins. Further, the improvement in earnings is on deal wins in insurance and finance along with a turnaround in retail. It expects the firm to deliver 12.3 percent earnings CAGR over FY18-20 and it has also increased FY18/19 operating earnings forecasts by 4-5 percent.
Brokerage: Edelweiss Sec | Rating: Hold | Target: Rs 2,315
The brokerage observe that the firm’s strong execution lead the margin beat. In terms of sectors, digital and retail looked good, while BFSI’s turnaround was awaited. The firm’s limited margin levers will impinge on the company’s earnings growth.
Brokerage: HSBC | Rating: Hold | Target: Rs 2,380
HSBC said that it liked TCS’ ability to drive through tech cycles, but high base and valuations are currently limiting the stock upside.
Brokerage: Morgan Stanley | Rating: Underweight | Target: Raised to Rs 2,250
The brokerage believes EPS growth could improve in FY19, but valuations are stretched. It lowered FY18 constant currency revenue growth estimate to 6% from 7.4% and increased FY18 margin assumption to 24.9% from 24.6%.
Brokerage: CLSA | Rating: Buy | Target: Raised to Rs 2,970
The company’s Q2 was mixed with a third-successive quarter of soft CC revenue growth on QoQ. A growth recovery in insurance and retail could precede US banking recovery. It also said that growth recovery appears more likely from the fourth quarter, while strong margin performance drives 2-4 percent upgrades to its estimates.
Brokerage: HSBC | Rating: Upgrade to buy | Target: Raised to Rs 490
The brokerage said that Tata Tele could add 5 percent revenue market share in a no cash/debt deal.
Brokerage: CLSA | Rating: Underperform | Target: Rs 430
CLSA said that Tata deal adds value to the stock and it would add spectrum, market share and value. Moreover, the spectrum share would be boosted by 200 basis points to 26 percent post Tata Tele deal. It estimates Rs 7,400-11,700 crore value addition from Tata Tele deal.
Brokerage: Credit Suisse | Rating: Upgrade to neutral | Target: Raised to Rs 400
The Tata deal is being viewed in terms of significant cost and network capacity synergies. Tata’s negative EBITDA business could turn into positive EBITDA accretive by Bharti.
Brokerage: CLSA | Rating: Buy | Target: Rs 2,060
The brokerage house expects 25% profit CAGR over FY17-20, while profit growth was led by topline & efficiencies. The bank’s CASA growth was strong and longevity of wholesale flows will be the key. It also observed that slippages stayed high, while stress was manageable.
Brokerage: Credit Suisse
Credit Suisse said that the bank’s Q2 profit growth was in-line with estimates, while operating expenditure growth was contained. Loan growth remained strong at 25% yoy, driven by growth in corporate.
Brokerage: Credit Suisse | Rating: Outperform | Target: Rs 600
Credit Suisse said that the company had strong quarterly results, and the management was confident of decent growth momentum. It also observed that the stock offers decent medium-term growth at an attractive 13 times FY19 P/E. It slightly tweaked FY18-20 estimates post Q2 earnings.[“Source-moneycontrol”]