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Motilal Oswal

Articles By Motilal Oswal

548 Articles

Britannia Industries Rating: Buy- Firm widening the gap with its peers

It is poised to gain market share in biscuits; valuations are inexpensive; upgraded to ‘Buy’ with TP of Rs 4,120

On the other hand, the stock is now attractive at 36.5x FY23e EPS, a discount to its 3/5 year average P/E multiple of 48x/46x and also on a relative basis as compared to its peers.

Analyst Corner| NTPC: Maintain ‘buy’ with DCF-based TP of Rs 141

The Ministry of Power (MoP) has issued a notification on Late Payment Surcharge (LPS).

NTPC

Maintain ‘buy’ on Maruti, SUV remains the focus area

Maruti (MSIL) eyes ~12.7% volume CAGR in passenger vehicles (PV) in Asia (excluding Japan) over CY20-25.

maruti suzuki

Analyst Corner: ‘Buy’ on RIL; investment may come in O2C business as well

RIL in a recent presentation announced initiation of the formal process of carving out the O2C business into a wholly owned subsidiary.

RIL

Gujarat Gas: Reiterate ‘buy’ with TP of Rs 560

Gujarat Gas (GUJGA) has proved to be a clear outperformer since the curbing of polluting fuels at Morbi – an impetus by the government toward the adoption of greener fuel.

gujarat gas

Power Grid rating – Buy: Strong show by transmission segment

Decline in capitalisation could impact growth; valuations are attractive; TP raised to Rs 248; ‘Buy’ rating maintained

Valuations at 1.5x FY22e P/BV and ~7% FY22e dividend yield remain attractive for a company with steady RoEs of ~17%. Maintain Buy, with DCF-based TP of Rs 248/sh.

Analyst Corner: Maintain ‘neutral’ on Info Edge, target price Rs 5,440

Billings fell 31% YoY in 1HFY21. The same reflected in the 15% revenue decline during 3QFY21, given the subscription-based model of the business.

info edge

ONGC: Gas output may clock 6% CAGR over FY20-23

Crude oil production has reached last year's levels, while gas is still marginally lower YoY due to lower offtake by customers on account of Covid-19.

ONGC

Bharti Airtel Rating ‘Buy’; India wireless business showing cause for cheer

Subscriber mix was behind healthy ARPU rise; trend of robust subscriber growth persists; net debt, interest cost up; ‘Buy’ maintained

ARPU continued to see a steady uptick – it came in 2% q-o-q higher at Rs 166 (v/s est.Rs 164).

Escorts: Maintain ‘neutral’ as positives are largely priced in

Escorts (ESC)’s 3QFY21 performance was in-line, with strong profitability and over 80% PAT growth.

excorts

ICICI Bank: Raise FY21E estimate by 20% due to lower credit cost, maintain ‘buy’

On the asset quality front, controlled slippages led to a 6bp Q-o-Q rise in the pro forma GNPA ratio, while total restructuring stood at 0.4% of loans (v/s 1% guided earlier). Pro forma PCR stood ~78%, the highest in the indu

We raise our FY21E estimate by 20% due to lower credit cost while largely maintaining our FY22E/FY23E estimates. Maintain ‘buy’.

Axis Bank Rating: buy- Earnings were weak in the third quarter

Prudential provisioning to aid earnings; FY22/23e EPS up 21/10%; maintain ‘Buy’ with target price of Rs 750

Provisions stood elevated at Rs 46 bn (+33% y-o-y) as the bank made provisions on proforma slippages. T

Maruti Suzuki: Net sales grow 13.3% to Rs234.6 billion

Higher other income boosted PAT growth by 24% to Rs19.4billion (v/s our estimate of Rs20.3billion.

Ebit margin rose 30bp YoY (+10bp QoQ) to 6.3% (v/s our expectation of 8%) due to lower depreciation.

Hindustan Zinc rating – Neutral: A strong showing in third quarter by company

Ebitda CAGR of 18% is estimated over FY21-23e; positives priced in; ‘Neutral’ retained with TP of Rs 268; promoter move an overhang

Reported CoP rose 3% q-o-q to $946/t, impacted by one-time employee payout amounting to ~$20/t.

Water supply: Smart solutions water down municipal body’s pains

A tie-up between Pimpri Chinchwad corporation and a start-up has led to substantial revenue gains for the body and plugging of water leakages

These gains become starker when compared with the huge effort that the next-door Pune Municipal Corporation (PMC) has had to make to plug water leakages of 35% and loss of 1,84,187 million litres annually.

Maintain ‘neutral’ on Bajaj Auto with TP of Rs 4,000

While domestic 3W recovery might be delayed, it is vulnerable from a possible disruption from electrification.

bajaj auto shares

Analyst Corner: Maintain ‘neutral’ on IRB Infra with TP at Rs 122

IRB’s consolidated financials are not comparable Y-o-Y due to the monetisation of nine assets through the InvIT route and consolidation of the Mumbai-Pune Phase II project.

IRB Infra

Analyst Corner: ‘Buy’ on KEC International with target price of Rs 450

As a result, we expect KECI to surpass FY20 order inflows in FY21 (+11% YoY) v/s our earlier assumption of flat order inflows.

The order inflow momentum is picking up – as we enter a busy season in terms of construction activity and work commences to fulfil the orders bunched up due to the pandemic.

Analyst corner- Reiterate ‘buy’ on Piramal Enterprises; co re-strategised its business, increased distribution reach

While Covid-19 has led the CHG segment to take a temporary back seat in terms of growth, it has aided increased order book in the CDMO segment.

We remain positive on PIEL on superior execution across pharma segments and an increasing retail-focused lending book.

Indian Energy Exchange Rating: Buy- Momentum in volumes continued in December

New products aiding market share gains; FY21e EPS up 8%; ‘Buy’ maintained with target price of Rs 255

Rolling forward to 30x Dec’22e EPS, we maintain our Buy rating with a TP of Rs 255/share.

‘Neutral’ on L&T Infotech with revised TP to Rs 3,910

LTI is up ~130% since its inclusion in our model portfolio (in 3QFY20) and is currently the most expensive (28x FY23 EPS) IT company within our coverage universe.

Analyst Corner: Maintain ‘buy’ on Marico with target price of Rs 470

Channel performance, General trade and e-commerce continued to drive growth. Modern trade fared better in 3Q compared to 1HFY21. CSD continued to decline YoY, but improved sequentially.

marico

Mahindra & Mahindra Rating: buy; seriousness on capital allocation on show

SYMC resolution in sight; move on Ford JV to have limited impact on SUV biz; company best proxy for a rural revival; Buy retained

Both these decisions signal seriousness of its intent to correct capital allocation even within the Auto business.

Maintain ‘buy’ rating on Federal Bank with TP of Rs 80 per share

We expect margin trajectory to stay stable, aided by improving CASA mix and shedding of high cost certificate of deposits (CDs).

Pidilite Industries rating: neutral; past record on wealth creation should be sustained

Outlook is bright in the medium term; ‘Neutral’ retained given expensive valuations and uncertain near-term recovery

Its products meet stringent regulatory and compliance norms, which have helped strengthen the consumer base not only in the subcontinent but also in other emerging markets.

Banking Asset quality needs to be monitored

Impact of slippages in H2 to be limited; ICICIBC, HDFCB, SBIN and AUBANK are top picks

ICICI bank, ICICI Bank share price

Maintain ‘buy’ on SIB with revised target price of Rs 11

The bank plans to increase its focus on Retail, Agri, and MSME segments and aims to capture a higher wallet share via enhanced customer experience through digital analytics.

expert advice on investment in South Indian Bank
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