Articles By Jefferies

549 Articles

ICICI Lombard rating – Buy: Higher commissions impacted earnings

Normalisation of tie-up with IBank on health side is key; standalone EPS cut by 2-4% and TP reduced to Rs 1,780; ‘Buy’ retained

Combined ratio was at 97.9% and investment income (total) was up 33% y-o-y.

Equity Strategy: Broad-based upgrade in earnings likely

All 13 sectors should see growth in Q3; domestic firms to clock 7-qtr high; margins expected to flatten q-o-q

Q3FY21 pre-exceptional profit growth for Jefferies coverage universe is expected to rise 1ppt q-o-q to a 7-quarter high pace of 21% y-o-y.

Analyst Corner: Maintain ‘buy’ on ICICI Pru Life with TP at Rs 630

ICICI Pru Life has ramped-up its Banca partnerships through tie-ups with IIB, RBL Bank, AU SFB, IDFC First Bank & NSDL Payments Bank. It now has tie-ups with over 20+ Banks.

Better growth can aid rerating; we see good risk-reward.

Analyst Corner: Maintain ‘buy’ on Colgate with revised TP of Rs 1,820

Colgate's growth agenda, which began under the current CEO, is gaining momentum as evident in the recent investor presentation.


Materials (Steel): Prospects look up for graphite electrodes

FY22-23e EPS up 16-40% for GRIL & HEG; valuations undemanding despite spurt in stock price; ‘Buy’ retained

HDFC Bank rating: RBI curbs to have a limited impact; ‘Buy’ retained

RBI curbs to have a limited impact but resolution of issues will take some time; most retail business lines back to pre-Covid level; ‘Buy’ retained

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Bharat Electronics Rating – Buy: Re-rating of stock is in the works

Margin delivery, order flow and execution ramp-up will drive upside; TP raised to Rs145; ‘Buy’ maintained

Maintain ‘buy’ on HDFC Life with price target of Rs 800

Indian insurers better placed to manage hedges on guarantee risks: Management reiterated that its guaranteed return book was hedged for interest rate and cashflow risks.

IndusInd Bank Rating: buy; Sustenance of book quality augurs well

Provisions expected to be high in H2FY21; FY22-23e EPS up 3-5%; valuations are attractive; Buy retained with TP rising to Rs 1,030

Axis Bank Rating: Buy- Growth outlook has improved for bank

Festive season was better than expected; provisions higher than peers despite similar trends; TP raised to Rs 700; ‘Buy’ maintained

The committee recommendations allow Axis to hold 20% stake in insurance subsidiary, which could make it simpler to take stake in Max Life — possibly it will keep 3% among subsidiaries & rest at bank level.

Analyst Corner: Adani Group focusing more on B2C as against B2B

Revenue streams related to passenger/non- passenger footfalls is a focus area for generating healthy returns on airport assets

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Analyst corner: ‘Hold’ on Motherson Sumi as it reiterates FY25 target

MSS has big growth ambitions although value creation will depend on inorganic opportunities and investment needs where visibility is low. We retain Hold.

Power Grid Rating: Hold- Other income rise drove PAT beat

InvIT cash to be used for capex; FY21-22e EPS up 2-5%; ‘Hold’ retained given medium-term earnings concerns

The stock has de-rated in the last 3-5 years on a weak growth outlook and 6% dividend yield limits absolute downside.

Analyst corner: Retain ‘buy’ on Tata Steel with revised PT of Rs 680

We upgrade FY22-23E EPS by 22-25% and retain 'buy' with a revised Rs680 PT. Our bull case PT is Rs900, 83% upside.

Tata's Q2 ebitda was up 60% YoY (12x QoQ) and 35% beat.

Ipca Laboratories Rating ‘Buy’; margins were higher than estimated

FY21/22e EPS up 17/10% on growth outlook, margin guidance; TP raised to Rs 2757

Excluding anti-malarial drugs, domestic business was up 6% y-o-y, as Pain & Analgesics, which accounts for more than half the domestic revenue, was up 10% y-o-y.

Retain ‘buy’ on EicherMotors as good demand kicks in

Demand commentary was positive and RE has 125K bookings but company added the model specific supply constraints are limiting production rate.

‘Buy’ on Cipla; firm likely to beat its cost-saving targets

Covid products now account of 5% of India sales and company also saw a healthy uptick in trade generics.

It had reached a similar agreement with Alvogen on g-Revlimid sales in the US.

Divi’s Laboratories Rating ‘Buy’; a strong performance in the second quarter

Custom synthesis capex boosts FY22 prospects; EPS for FY21/22e up 14/14%; upgraded to ‘Buy’ rating

State Bank of India Rating ‘Buy’; overhangs being dispelled for the company

With collections at 97%, asset quality should fare better than apprehended; upgraded to ‘Buy’ with TP revised to Rs 270 from Rs 215

Also, SBI has a lower level of contingent provisions, which can keep earnings volatile.

Analyst Corner: Maintain ‘buy’ on Godrej Properties; biz gains pace

Business is gaining pace again with labour force 30% higher than pre-Covid and multiple new launches underway.

Cut rating on Dabur to ‘hold’ from ‘buy’ following outperformance relative to peers

Notable revenue growth. After declining for two consecutive quarters, Dabur’s Q2 revenue grew 14% YoY, a material beat of our and consensus estimates.

The healthcare segment continued to outperform, with revenue up 49% YoY as consumers remained focused on wellness and immunity.

Bharti Airtel Rating ‘Buy’; strong showing in operational terms

Sound pick-up in subscriber growth key positive; FY21-23 estimates up 4-6%; ‘Buy’ retained with revised TP of Rs 610

Average data usage was stable at 16GB/month, the highest in the industry.

HDFC Life Rating: Buy-Rebound in premiums was impressive

Recovery was led by Par business; EPS estimates up given better trajectory on premiums; ‘Buy’ rating retained with TP of Rs 760

We raise VNB estimates and see 17% CAGR in VNB over FY20-23 with 18% FY22 ROEV.

Retain ‘buy’ on Colgate with price target of Rs 1,700

Colgate's GM & Ebitda margins climbed to all-time highs, contributing most to the 2QFY21 earnings beat.

HDFC Bank Rating ‘Buy’; a healthy performance in the quarter

Key positive was collection of 97% of Sept dues; EPS up to factor in better asset quality and retail revival; TP raised to Rs 1,450

Analyst Corner: Retain ‘buy’ on Hindustan Unilever with PT at Rs 2,650

While the company has been able to offset some part of revenue pressure due to strong growth in hygiene portfolio, the impact has been higher on margins.

We estimate that discretionary portfolio contributes 20% to company revenues but given the superior margins, contributes nearly 30% to overall company profits.

Motherson Sumi Rating ‘hold’; restructuring exercise has promise

Merger with SAMIL will enhance potential for global growth; TP up to Rs 120 from Rs 105

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