Bank of Baroda
Brokerage – Axis Capital | Rating – Hold | Target Rs 180
Axis Capital has maintained its hold rating on Bank of Baroda with a target price of Rs 180 per share post earnings, as the research house does not see huge upside post recent run-up.
“We have little room for further rerating given modest return ratios,” it said.
Decrease in slippages, consolidation in international book and government recapitalisation are key positives.
Asset quality improved and slippages decline 41 percent in Q2 on sequential basis.
Brokerage – Morgan Stanley | Rating – Equal-weight | Target Rs 170
Morgan Stanley has maintained its equal-weight rating on the stock with a target price of Rs 170 as it feels earnings recovery may be a bit delayed.
Pre-provisioning operating profit margin is still quite weak & will improve gradually, according to the research house.
It is better placed than many state-owned enterprise bank peers, it feels.
Brokerage – UBS | Rating – Buy | Target Rs 230
Bank of Baroda has strong operating trends and has been staying ahead of peers, UBS said while maintaining a buy call on the stock with increased target price at Rs 230 from Rs 220 per share.
The research house expects return ratios to improve from FY19 and feels BoB is better placed than peers to clean up its corporate loan book.
It expects gross NPA to decline to 9 percent in FY19 from 11.2 percent in Q2FY18. Return on equity is expected to improve to 7.3/11.7 percent in FY18/19 from 3.5 percent.
Brokerage – Credit Suisse | Rating – Outperform | Target Rs 200
Credit Suisse has maintained its outperform rating with a target price at Rs 200 per share.
It has cut its FY18/FY20 EPS estimates by 42/22 percent. With CET1 at 8.4 percent, capital raise is imminent, it feels.
Brokerage – Morgan Stanley | Rating – Underweight | Target Rs 448
While having an underweight rating on Sun Pharma with increased target price at Rs 448 (from Rs 362), Morgan Stanley said Q2 earnings appeared to be bottoming but the street is estimating a solid recovery.
The research house sees risk to upcoming specialty launches: Seceira & Tildra.
Quicker US recovery & faster specialty ramp-up are key upside risks to the rating, it said.
Brokerage – Macquarie | Rating – Underperform | Target Rs 440
Macquarie believes re-rating triggers are elusive & it is difficult to ignore medium-term pain in Sun Pharma.
It also believes impact of pricing erosion on company has been magnified due to its high base.
The research house has underperform rating on the stock with target at Rs 440 per share.
Resolution of Halol in second half of FY18 is a key risk to underperform recommendation, it said.
Brokerage – Edelweiss Securities | Rating – Buy | Target Rs 525
Edelweiss Securities has maintained buy call on the stock with a target price of Rs 525 per share as Q2 results were largely in-line with expectations.
It believes Halol resolution & inorganic initiatives at Taro can turn the tide around for company.
Brokerage – CLSA | Rating – Sell | Target Rs 390
While retaining a sell call on Sun Pharma with increased target price at Rs 390 from Rs 370 per share, CLSA said it has raised FY18 EPS estimate by 7 percent, But retain FY19-20 target.
The research house feels there is little visibility on revival despite US nearing bottom.
Lack of new launches & continued pricing pressure resulted in a sharp US revenue decline in Q2.
Halol plant inspection outcome will be the key near-term stock catalyst, it feels.
Brokerage – CLSA | Rating – Buy | Target Rs 130
GST hurt execution in Q2 but order inflow remains strong, CLSA said while retaining buy call with a target of Rs 130 per share.
It expects 18 percent EPS CAGR over FY17-20. Bharatmala project creates multi-year growth visibility for road builders, it feels.
Brokerage – CLSA | Rating – Buy | Target Rs 39,300
Royal Enfield continued to perform well with EBITDA up 25 percent YoY and commercial vehicle business performance is also improving YoY, CLSA said while retaining buy rating on the stock with a target price at Rs 39,300.
Positive response to new products could provide an additional growth lever, according to research house. “We continue to like its strong long-term growth outlook,” it said.
Brokerage – Credit Suisse | Rating – Underperform | Target Rs 26,600
Credit Suisse has maintained its underperform rating on Eicher Motors as valuations at 30xFY19 core EPS are reach, but it has target price To Rs 26,600 from Rs 25,600.
New products need to succeed for current multiples to sustain, it feels.
Brokerage – CLSA | Rating – Underperform | Target Rs 480
CLSA has downgraded Cadila Healthcare to underperform from buy and slashed target price to Rs 480 from Rs 580 per share as it cut FY18-20 EPS estimate by 3-21 percent.
Q2 profit is unlikely to sustain as top product sees early competition, it feels.
CLSA said Lialda launch was the major contributor to US sales but early Lialda competition may result in flat US sales & earnings for FY19-20
Brokerage – CLSA | Rating – Sell | Target Rs 405
CLSA has retained sell call on GAIL with a target price at Rs 405 as the stock seems to be ignoring the risks.
Gas transmission gains may be offset by long-term US LNG contract in 3-5 years, the research house feels.
Weak petrochemical business in Q2 was offset by strong gas transmission, gas trading & LPG.
Brokerage – Citi | Rating – Neutral | Target Rs 510
Citi has neutral call on the stock with increased target price at Rs 510 from Rs 423 as it has raised FY18 EPS estimate by 7 percent & FY19-20 by 16-17 percent.
LPG performance was better-than-expected, but petchem disappointed. Recent crude upmove added another layer of comfort, it feels.
Brokerage – Credit Suisse | Rating – Neutral | Target Rs 840
Credit Suisse maintained its neutral rating on Dilip Buidcon but raised target price to Rs 840 from Rs 770 per share as it raised FY18/FY19/FY20 EPS estimates by 18/12/8 percent.
Key downside risks include delay in getting appointed dates for HAM projects, it feels.[“Source-moneycontrol”]