ICICI Securities

Articles By ICICI Securities

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Analyst Corner: ‘Buy’ on JK Cement with target price at Rs 1,725

JK Cement’s (JKCE) recent capacity additions in high utilisation/better pricing markets of north/central regions are likely to see a quick ramp-up along with better cost efficiencies.

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AIA Engineering rating: Buy — Execution in Q4 was better than expected

FY21/22 EPS up 12.3/11.8% given results and recovery in output; TP raised to Rs 1,890

Though new client development has taken a back seat due to the travel ban, it is likely to pick up once the situation normalises.

Analyst Corner| Glenmark Pharma: ‘Buy’ with revised TP of Rs 488

Glenmark initially received DCGI nod to conduct phase-3 clinical trials with oral antiviral Favipiravir among COVID-19 patients in early May’20 and has now received manufacturing & marketing approval in India for treatment

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Hindustan Petroleum Rating: Buy — Best placed to gain from strength in auto fuel marketing margins

Q1FY21e EPS expected to rise by 232% y-o-y; EPS for FY21-22e up 11% due to tax rate; top pick among OMCs; ‘Buy’ maintained

Factoring in the lower tax rate has boosted FY21-FY22 EPS estimates by 11% and target price by 2% to Rs 278 (32% upside).

Analyst Corner: Grasim Industries rating ‘add’; a weak final quarter for the company

Pricing outlook for core business is weak; FY21-22e Ebitda down 6-17%; TP raised to Rs 635 due to rise in stock price of holdings.

Net debt increased by Rs 34 bn y-o-y to Rs 29.8 bn as of Mar’20-end, mainly led by investment in subsidiaries/associates.

Sumitomo Chemicals rating: Buy — Revenue growth sound despite Covid lockdown

Company to handle crisis well and is on track to gain market share in FY21; ‘Buy’ retained with TP of Rs 317.

CreditAccess Grameen rating: ‘Buy’; AuM growth in quarter was strong

Company likely to navigate crisis better than peers; ‘Buy’ maintained with TP of Rs 585.

Wipro: Maintain ‘buy’; new CEO has strong credentials

Wipro’s challenge has been a sub-optimal mix of clients where hunting and new logo efforts could have been better.

Europe is a key bastion of growth for the industry where Wipro has struggled in the recent past and where Delaporte’s experience will be of immense use as well.

HDFC rating: Buy — Earnings reflected dull realty sentiment

Asset growth, likely to be soft for two quarters, will revive faster than peers; company to consolidate its positioning; ‘Buy’ retained.

Hindustan Zinc Rating: Buy — A steady performance in the quarter

But for Covid-19, volume scenario for FY21 was bright; dividend outlook and execution of 1.2-mtpa project behind ‘Buy’ rating

Duty hike on petrol and diesel to hit outlook for OMCs

FY21E EPS cut by 10-27% and target price by 16-34%; companies downgraded to ‘Hold’ rating from Buy

NIIT Technologies Rating: Add; Execution stood out in a challenging scenario

Recovery is expected in Q2; upgraded to ‘Add’ given recent correction and other positives; TP cut to Rs 1,310.

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Analyst Corner: Hexaware Tech rating ‘add’; A subdued quarter for the company

Margins expected to fall in CY20e; downgraded to ‘Add’ with reduced TP of Rs 330

Analyst Corner: Grasim Industries rating – ‘hold’; COVID-19 has worsened outlook for VSF business

There’s absence of catalysts to narrow holdco and conglomerate discount that has risen of late; ‘Hold’ retained with TP of Rs 550.

Analyst Corner| Pidilite: Downgrade to ‘reduce’; target price revised to Rs 1,378

The prolonged lockdown in Q1 and expected decline in volumes of discretionary-based products (plywood and laminates) in near term is expected to put pressure on PVA volumes (growth likely to decline in double digits) in FY21.

Analyst Corner: ACC rating ‘buy’ – Ebitda beat estimates due to lower costs

CY20e Ebitda cut by 7% to factor in Covid-19; valuation is attractive; ‘Buy’ retained.

Maintain Buy with the target price unchanged at Rs 1,520/share based on 9x Mar’22e EV/E.

Aurobindo Pharma Rating: Buy; USFDA decision dispels key overhang

Prospects for US business remain strong; TP raised to Rs 824 from Rs 578; ‘Buy’ retained; re-rating likely after VAI for Unit IV

This removes the key overhang from the stock as Unit IV was issued 14 observations and is a critical plant for the company with 46 ANDAs pending for approval. (Representative image)

TVS Motor Company Rating: Buy; Norton to boost premium capabilities

Near-term concerns over Covid-19 remain; ‘Buy’ retained with unchanged TP of Rs 447

In the context of capabilities and opportunities, it provides TVSM with a much cheaper route to elevate its position.

Federal Bank Rating: ‘buy’; RoA to be strong despite present crisis

FY20/21e EPS down 7/24% to factor in challenges; TP cut to Rs 72; ‘Buy’ retained

Greenlam Industries Rating: BUY; Opportunity to invest for medium-long term

15.9/34.7% cut in FY20/21 EPS due to COVID-19; TP down to Rs 754; upgraded to ‘Buy’ given sharp correction

Factoring in the same, we cut our revenue/earnings estimates by 5%/13% and 15.9%/34.7%, respectively, for FY20/FY21.

Consumer staples & discretionary: Organised players stand to gain

We expect start-up funding to be lower once the situation normalises, resulting in lower competition for the branded QSRs.

in containment zones, only essential activities shall be allowed’.

Sobha Rating: Buy; Difficult times lie ahead for company

Q4 performance was steady; FY21/22e volumes cut by 40/20% due to Covid-19; TP down to Rs 261 from Rs 522

The likely economic fallout of COVID-19 is home buyers deferring their home-buying decisions for 6-9 months which spells trouble for Sobha as it has a residential heavy business model coupled with high debt.

Analyst’s Corner: ‘Buy’ on Godrej Properties; target price at Rs 721

While GPL’s FY20 sales bookings were in line with our estimates, we have cut our FY21-22E sales volume estimates by 30% each to ~9-10msf.

Godrej Consumer Products (GCPL) posted weak numbers for Q4FY20 results.

Analysts corner | Hero Motocorp rating ‘buy; Correction offers investors an opportunity

Company focus shifts to contingencies; likely to gain from possible rural recovery in H2FY21; ‘Buy’ retained.

Analysts Corner | Aurobindo Pharma: Maintain ‘buy’ with a TP of Rs 485

The termination of Sandoz deal would impact the growth outlook in near term. However, we remain positive on Aurobindo’s track record of continuously growing US generic business, maintaining margin profile in challenging tim

Analyst Corner: Sun Pharmaceuticals rating ‘buy’; OAI status for Halol will delay approvals

EPS estimates down 2-4% to factor in lower generic revenue and remediation costs; key concerns priced in; TP revised to Rs 458.

Analyst Corner: NTPC rating ‘buy’ – Prospects are bright for the power giant

Given the business model, Covid-19 impact is likely to be negligible; valuations cheapest since they peaked in FY08; ‘Buy’ maintained.

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