Morgan Stanley

Articles By Morgan Stanley

107 Articles

Analyst Corner: SBI best placed in current cycle; target price at Rs 600

SBI has much "option value," both in earnings (1% RoA) and multiples. Our bull case (>100% upside) reflects this. Its retail franchise has improved, and the corporate cycle is turning – we see material upside risk. Raise pr

SBI Stocks

Analyst Corner: Overweight on HDFC AMC with revised TP of Rs 3,130

Stock has underperformed year to date and has significantly underperformed both Sensex and Bankex.

Tata Power Rating ‘Overweight’; operationally a strong second quarter

Beat in Q2 and interest cost savings are expected to drive consensus upgrades; ‘Overweight’ maintained

Fuel under recoveries decreased to Rs 0.3/unit (F2Q20 Rs 0.52) – lower spot coal prices and competitive shipments.

Tata Power: Transition should lead to improvement in return ratios

Global comparisons: We find it of interest that global utilities focused on a single line of business tend to trade at higher and better multiples as they are easier to understand and often have stronger return ratios.

RBL Bank Rating: Underweight; Asset quality uncertainty is a concern

Core revenue growth slowed in Q1; UW retained given fuzzy outlook on asset front and muted RoE prospects.

Raise target price-to-earnings on MCX to 34x, slightly above historical mean

Our thesis of structural and cyclical upturn is playing out. We raise our target P/E to 34x, marginally above long-term mean.

Reliance Industries, Rating: overweight; RIL likely to emerge stronger from COVID-19 crisis

Net debt to remain stable in FY21; FY21e EPS down 10% to factor in Covid-19; TP revised to Rs 1,544 from Rs 1,632; ‘OW’ maintained

However, RIL has flexibility to prioritise its investments in FY21, and could thereby reduce cash outlay by ~25-30% y-o-y.

Bajaj Finance: A slight drag on margins likely

Revenue/ average AUM has continued to surprise positively, driven by strong fee income and rising share of high-yielding loans.

bajaj, bajaj finance

Stock corner: ‘Overweight’ on Jindal Steel and Power, positives are not factored in completely

Consol. Ebitda for FY21/22e up 3/1%; TP raised to `174; valuations still reasonable.

jindal, jindal steel

RBL Bank: Macro outlook remains tough; PT at Rs 240 – Morgan Stanley

We forecast good core PPoP growth of ~25% CAGR during FY19-22. Although the bank should reduce risk and see higher NPLs in corporate banking, we expect a continuing increase in the unsecured retail loans mix (credit cards, MF

RBL Bank, RBL Bank share, RBL Bank share price, morgan stanley 

ICICI Bank well placed on earnings upside, TP Rs 775

The loan market share gain has been going on for years.

ICICI Bank, HDBK, PPoP, loan market share, Macro, RBI, private banks, asset growth

Stock corner: ‘Overweight’ on DLF; new target price at Rs 269

The company is starting construction on 12-13msf of new projects in its Devco, including the luxury residential project in Phase-V and prime central Delhi projects.

dlf, infrastructure sector

Edelweiss: Maintain ‘buy’ on NMDC with target price of Rs 140

With a 350 bp higher ROCE than Asian energy peers and a focus on balance sheet deleveraging, we find the valuation attractive.

SBI: Moving to EW amid asset quality uncertainty

This would represent sharp improvement, but our confidence in these estimates is not very strong. There is a credit crunch going on in India among weaker-rated borrowers as flow of credit from challenged lenders has stalled.

The other risk would be if SBI were asked to help any of the challenged lenders should they face distress.

Avenue Supermerts Rating: Emerging headwinds are a concern

Valuations are not factoring in changing scenario; initiated with ‘UW’ and TP of Rs 1,120

rupees, economy, stock markets, retail industry

New Year 2019 Global Macro Outlook: After bad 2018, emerging markets to drive growth this year

After a bad 2018, EMs are in for a stable New Year, with core inflation at low levels, even as developed markets face headwinds.

Sun Pharmaceutical Industries Rating: Showing in second quarter weak

We believe the market is underestimating the upfront costs of building US specialty and overestimating the pace of pick-up in US generic business. Rich valuation also keeps us Underweight.

Sun Pharmaceuticals, sun pharma, usfda, us, india

Market volatility likely to rise ahead of elections, bet on GARP

A good portfolio strategy would be to bet on GARP (growth at a reasonable price) stocks among banks, discretionary consumption and industrials – both large and mid-caps.

Analyst corner: Ashok Leyland poised for 12% FY19 volume growth

Ashok Leyland has outperformed the Nifty Auto Index by 23% over the last 12 months as truck volumes have been strong and AL has maintained market share.

Domestic investors to drive incremental equity demand, India will remain in the midst of a domestic liquidity supercycle

On various valuation models we use, the long-term growth that seems priced into Indian equities is tolerable.

Good news for investors! Stocks likely to rise over next 60 days

A host of upcoming catalysts behind the good outlook; recent fall makes short-term valuations compelling; ‘OW’ retained.

investors, stock

Hathway: Acquisition or tie-up is a key upside catalyst

Hathway plans to launch 300 Mbps, 2TB monthly data plans in Chennai from October 10 and pan-India from December 2018.

HDFC Bank: Market conditions will help improve profitability

HDFC Bank is extremely well placed to keep gaining share in all parts of loans – retail, MSME, corporate. Digital will keep driving cost ratios down.

HDFC AMC has all makings of best play in MF space

We have a structurally bullish view on Indian mutual funds and HDFC AMC offers all the ingredients to be the best play in the space.

HDFC, HDFC AMC, Equity, financial savings, india financial savings, equity mutual funds, money

All ingredients to be best play in MF space

While valuation is lofty, earnings compounding should drive returns; initiated at ‘Overweight’ with TP of Rs 2,050

Maharashtra’s 2025 agenda: Why state’s $1 trillion GDP target could make it India’s growth engine

Aiming at a GDP of $1 trn, the state is likely to be India’s growth engine for the next half a decade. If the CM’s agenda goes as planned, Maharashtra will account for 20% of India’s GDP in 2025. The state contributes a

Biocon Rating: Biosimilar monetisation to yield dividends

The last two years were all about regulatory submissions and manufacturing facility clearance for Biocon’s four key biosimilar assets. The next two years should be all about their monetisation and entry of new products in t

biocon, biocon rating, monetisation, Sandoz, Mylan 
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