Morgan Stanley

Articles By Morgan Stanley

102 Articles

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.

Both product and participation are expanding well at MCX.

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 

Reliance industries: Morgan Stanley rates ‘overweight’, says stage set for a turnaround in earnings

RIL stock has been range-bound year-to-date, but we see the stars aligning for it to break toward our price target as diesel, polyester and retail margins step up to a new normal, telecom subscriber growth sets new benchmarks

Reliance industries, ril, mukesh ambani, Morgan Stanley, capex, reliance earnings

Maintain ‘EW’ on Bank of Baroda; bad loans likely to moderate by April

Underlying trends in asset quality were good, with lower impaired loans and higher coverage – bank guided to watch list of 2.2% of loans.

Bank of Baroda, bad loans, RBI, CASA ratio, PSU banks, EW rating

Strong showing at home and in Europe

Consolidated Ebitda was above estimates; quarter results and positive outlook bode well for near-term earnings.

europe, economy

Equity strategy: Markets still have value stocks to offer, says Morgan Stanley

The market is unlikely to become “cheaper” without the level of confidence in future growth or the future growth estimate going down.

India’s most popular stocks are drawing sighs from value investors, given their headline valuations, but equity markets still have a lot of value stocks to offer

Analyst Corner: Maintain ‘underweight’ on Wipro; valuation to be cheap

Wipro's commentary on deal trajectory, client mining and strength in digital was positive, which leads it to believe growth could come back in 2Q19.

Wipro continues to under perform our revenue growth and margin expectations due to portfolio-specific issues that we think are likely to play out in Q119 as well.
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