Stock corner: Retain ‘buy’ on Bank of Baroda with revised target price of Rs 120
Bank of Baroda reported a PAT of Rs. 730 crore (our estimate: A loss of Rs. 1,200 crore) as the bank continued with the existing tax regime and thus no adjustments were required in DTA.
Maintain ‘buy’ on Sun Pharma, target price Rs 515
Emerging Markets (EM) sales were up 3% YoY at $201m (18% of sales).
Escorts rating | Results were in line with estimates
FY21e EPS up ~5% due to higher tractor volumes; ‘Neutral’ retained with TP of Rs 700
Stock corner: ‘Buy’ on Tata Motors, JLR recovery signs highlight of Q2
India business seems to have bottomed out; FY21e EPS up ~8%; upgraded to ‘Buy’ with revised TP of Rs 185.
Bajaj Finance rating: Maintain ‘neutral’ with target price of Rs 3,850
The share of new loans to existing customers increased y-o-y from 66% to 70%.
ICICI Bank rating | Buy — Operating performance was strong
Bank is well placed in a challenging environment, being on track to achieve RoE target; top pick in the sector; ‘Buy’ maintained.
Stock corner: Doubts over volume growth; downgrade Marico to ‘neutral’
Consolidated gross margin expanded 560 bps y-o-y to 49.6%. Ebitda margin expanded 270 bps y-o-y to 19.3% (v/s est 17.7%) in the quarter as the company actively invested in brand building.
Jubilant Foodworks Rating| Buy- Showing in the quarter was good
As highlighted in our update note two weeks ago, JUBI’s competitive positioning will get stronger as a result of the corporate tax cuts. Moreover, the challenge of a high SSSG base eases significantly going forward and JUBI
Analyst corner: Yield/ASK in line, but higher cost hits Indigo profitability
ASK increased by 24% y-o-y to 24.2 billion km. The company added ~10 new planes during the quarter, with addition of seven new domestic and six new international routes (China – 2, Vietnam – 2, Myanmar – 1, Saudi Arabia
Stock corner: ‘Buy’ on Larsen & Toubro with target price of Rs 1,830
Helped by a lower tax rate of 26.6% for H1, adjusted PAT growth stood at a strong 28.5%.
Stock corner: ‘Buy’ Reliance Industries, consumer business drove showing
Petrochemical Ebit stood at Rs 75 bn (-6% y-o-y, flat q-o-q), led by pressure on product spreads due to the global supply glut. Implied Ebitda (USD/mt) was lower at $317 (-22% y-o-y, -27% q-o-q) due to a sequential contractio
Analyst corner | Maintain ‘neutral’ on TVS Motor, target price Rs 434
EBITDA margin improved 20bp YoY (+80bp Q-o-Q) to 8.8% (our estimate: 7.8%). Low tax boosted adj. PAT to ~ Rs 1.8 billion (our estimate: ~ Rs 1.5 billion), a decline of ~15% Y-o-Y. For 1HFY20, revenue/EBITDA/PAT were down ~4%/
Stock corner: Maintain ‘buy’ on Federal Bank, revised target price of Rs 110
Other income grew 30% Y-o-Y, led by a significant rise of 27% in fee income. Total income growth (15% YoY) trailed opex growth, resulting in muted 3% Y-o-Y growth in PPoP, while the C/I ratio was up ~410bp QoQ to 53.5%.
Stock corner: ‘Buy’ HDFC Bank, business growth picked up in quarter
Margins are likely to be stable q-o-q at 4.3%, and NII to grow ~18% y-o-y; ‘Buy’ retained
Buy or Sell TCS shares? Stock Call by Motilal Oswal: Weak show; check target price
As we rationalise our ETR expectations, the EPS downgrade impact is only partial. Demand outlook for the medium term remains healthy considering strong deal wins.
Earnings season to be tepid again; Private banks, consumer and capital goods likely to provide some respite
Besides NBFCs, banks too have started facing asset quality concerns now.
Motilal Oswal: Jubilant Foodworks to gain from corporate tax rate cut
In our view, the government’s decision to cut the corporate tax rate bodes well for Jubilant Foodworks as it was under the highest tax slab of 34%.
Titan: Maintain ‘Buy’ with a revised target of Rs 1,435
Jewellery sales declined sharply with a sudden surge in gold prices denting consumer demand from mid-Jun’19.
Technology: Could BFSI wane seasonal strength
Although July-September is the strongest quarter for the industry, softening BFS momentum (owing to macro concerns in Europe and weak spending by capital market clients across geographies) is a cause for concern.
NTPC: Coal requirement and operations at its units
NTPC has completed trial-run operations at full load for unit-1 on 29th Sep’19 and will likely commercialise the unit this month.
Motilal Oswal: Maintain ‘buy’ on Marico
“We hope for some recovery in overall sentiment in H2FY20 on the back of good monsoon and government-led stimulus.”
Bharti Airtel rating | Buy — Company is entering a phase of stability
Further, ARPU accretion from broadband subscribers (2x ARPU v/s voice only subs) is likely to contribute to growth.
Petronet LNG Rating: Buy; Non-binding nature of deal is important
Recent corporate tax benefit behind ~12% rise in EPS for FY20/21e; \ TP raised to Rs 336 from Rs 305; ‘Buy’ maintained.
Motilal Oswal: Maintain ‘buy’ with TP of Rs 475 on ICICI Prudential
Accordingly, the share of ULIP in total APE has declined to ~70% from ~85% in FY17, while that of the protec-tion business has increased sharply.
Motilal Oswal: Retain ‘neutral’ on Hexaware with target price of Rs 390
BFS vertical (40% of total revenues) is highly skewed toward capital markets. Both buy- and sell-side firms contribute ~80% of BFS revenue, while retail and corp. banking account for a mere 20%.
Automobile: Some signs of recovery in Delhi/NCR
While inquiries have risen for 2W/PVs, MHCVs continue to feel pinch; limited pre-buy expected across segments
Tata Motors Rating: Neutral; Miss for Jaguar Land Rover in August volumes
The comprehensively re-engineered Land Rover Discovery Sport will be launched in China later this year further solidifying its position as a best-selling model.
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