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Motilal Oswal

Articles By Motilal Oswal

615 Articles

Analyst Corner: Maintain ‘neutral’ on Havells India with TP of Rs 1,290

Key operating parameters confirm our thesis of margin normalization from highs of FY21 even amid a strong demand environment.

havells india

Infosys rating – Buy: Results were an all-round beat on estimates

Guidance revision a positive surprise; growth likely to be in top quartile in FY22; EPS for FY22e up 2%; ‘Buy’ retained with TP of Rs 1,960

Our relative preference for INFO over TCS is premised on its headroom for increased growth potential.

Analyst Corner: Star Health outperforms industry in premium growth during FY18–21

During FY18–21, STAR outperformed the industry in premium growth, with 31.4%/ 32.4%/ 35.3%/ 8.5% growth in Total Premium / Retail Health / Group Health / Personal Accident.

Indian economy

TCS Rating: neutral — Q2 growth met estimate in cc terms

Growth outlook is intact but near-term issues limit upside; FY22/23 EPS down 2/4%; ‘Neutral’ retained with TP of Rs 3,770

Tata Consultancy Services Ltd. Campus Ahead Of Fourth-Quarter Earnings

Analyst Corner| Tata Motors: Maintain ‘Buy’ with target price of Rs 400

Tata Motors (TTMT) is a leading global automobile manufacturer with a wide range of PVs, SUVs, buses, trucks, pick-ups and defence vehicles.

tata motors

Cummins India Rating: sell — Draft Bill poses risk to long-term prospects

No material impact is likely in near term; better power supply a structural risk; Sell retained with TP of Rs 695

Cummins India Inv1

Piramal Enterprises rating – Buy: Completion of DHFL buy a positive event

~28% loan CAGR estimated over FY21-24e; firm likely to see strong retail growth; ‘Buy’ retained with TP of Rs 3,150

Principal on NCDs will be repaid at 5% p.a. for the first five years and 15% p.a. thereafter for the next five years.

Analyst Corner: Maintain ‘buy’ on ICICI Securities with TP of Rs 915

In 1QFY22, nearly 60% of the clients acquired were below 30 years of age, and ~80% were from tier 2 and tier 3 towns.

ICICI bank

Maintain ‘buy’ on LIC Housing Finance with TP of Rs 525

By segmenting borrowers based on their CIBIL score, irrespective of the category of employment, LICHF aims to cater to a larger borrower base.

This move is in tune with the demand for larger spaces and affordability, and good traction for loans in the ticket size of Rs 5-20m.

Analyst Corner: Maintain ‘buy’ on HDFC Bank, target price Rs 1,800

Lifting of RBI restrictions on new credit card sourcing before festive season augurs well: The RBI has partially lifted the restrictions placed on HDFCB in Dec’20 and allowed the bank to source new credit cards.

HDFC bank

Maintain ‘buy’ on Petronet with a fair value of Rs 310

The company’s return profile remains strong, with ROE/ROCE at 25–26%/21–23% over FY21–24E. We maintain 'buy'. As highlighted in its annual report, the company is embarking on a major diversification journey, which we

The stock trades at 9.2x FY23E EPS of Rs 23.3 and 5.3x FY23E EV/Ebitda. We value PLNG on DCF to arrive at a fair value of Rs 310.

Hindustan Unilever Rating: Buy – Long-term drivers of growth are strong

Demand outlook healthy; earnings could compound at 14-15% over the next 10 years; ‘Buy’ retained with TP of `3,280

APL Apollo Tubes rating – Buy: Higher utilisation likely to boost bottomline

PAT CAGR of 35% expected over FY21-24e; initiated coverage with ‘Buy’ rating and target price of Rs 2,065

Steady capacity addition, increase in penetration, and gains from unorganised players are expected to improve market share from current levels (~50%).

Analyst Corner| Exide Industries: Maintain ‘buy’ with TP of Rs 235

The said consideration would be paid through a) 87m shares in HDFC Life at a price of Rs 685/sh and b) the balance in the form of cash of rs 7.26b.

excide

Analyst Corner: ‘Buy’ on L&T Technology with TP of Rs 4,530 per share

The management has increased its focus on scaling up large accounts along with large deals, which will drive growth. It sees scope for margin improvement, led by a further offshore shift.

Analyst Corner: ‘Buy’ on Godrej Consumer with target price of Rs 1,250

The sales momentum is also leading to increased asset turns. Consequently, ROCE seems poised to cross 20% levels for the first time in a decade, after languishing in the mid-teens for most of this period.

Given this performance, the ongoing momentum over the past 15 months is a healthy development.

Expect Muthoot Fin to deliver 15% loan growth

Post this equity infusion, MUTH's stake in Belstar Microfinance will reduce to 57.9%, and MAJ Invest, Augusta Investments, and Arum Holdings will hold 10%, 4.6%, and 13.8% stake, respectively.

Larsen & Toubro Rating: Buy – Preferred pick to play any capex upcycle

Fundamentals are sound; firm is poised for strong earnings momentum once order inflows pick up; ‘Buy’ retained with TP of `1,950

State Bank of India rating – Buy: Asset quality boosts earnings outlook

GNPAs down 43% over past 3 years; 14% CAGR in PPOP estimated over FY21-23e; ‘Buy’ retained with TP of Rs 600

SBIN remains among our top Buys in the Banking space with a TP of Rs 600 (1.4x FY23e ABV+Rs 190 from subsidiaries/JVs).

Analyst Corner – Cadila Healthcare: ‘Buy’ with combined TP of Rs 670/share

We arrive at an NPV of ~Rs 12/share for the opportunity arising from the Covid-19 vaccine. We continue to value CDH’s base business at 25x its 12-month forward earnings to arrive at our TP of Rs 658.

We arrive at a combined TP of Rs 670/share. We maintain ‘buy’ rating.

Vodafone Idea Rating ‘Neutral’; net debt at Rs 1.9 lakh crore

Highlights from the management commentary: VIL is focusing on investments in 16 priority circles, which contribute 94% of revenue. Focus on high ARPU subscribers: It aims to scale up higher ARPU subscriber programmes in partn

The significant amount of cash required to service its debt, leaves limited upside opportunity for equity holders, despite the high operating leverage opportunity from any source of ARPU increase.

Analyst Corner – ONGC: Maintain ‘buy’, capex guidance for FY22 at Rs 295bn

The management has guided for gas production potentially at 24.7bcm for FY22, while gas production would be lower than earlier guided at 27bcm for FY23.

Tata Steel Rating: neutral – Pricing boosted Ebitda to record high

Profitability in Europe is likely to improve; Ebitda for FY22/23e up 16%; TP raised to Rs 1,565; ‘Neutral’ retained given valuations

Tata Steel

Analyst Corner: Upgrade BoB rating to ‘buy’ with revised TP of Rs 100

Asset quality trends were stable sequentially in a challenging environment, with fresh slippage at Rs 51.3 billion (annualized slippage rate of 3.1%).

Bank of Baroda

Analyst Corner – Bandhan Bank: Maintain ‘neutral’ with TP of Rs 330

Overall, asset quality remains uncertain, and we estimate credit costs to remain elevated at 5.5% of loans for FY22 (similar to FY21 levels).

Maintain ‘neutral’ on Bandhan Bank with revised TP of ₹330

The restructured book increased sharply to ~₹53b (6.6% of total AUM). SMA loans surged to 21%, while a large portion of the SMA overdue in Assam was eligible for a relief package. As a result, LGDs would remain controlled.

On the asset quality front, slippage stood elevated at ₹16.8b (annualised slippage ratio of ~9%).

Maintain ‘buy’ on LIC Housing Finance with Rs 525 TP

It delivered a healthy loan growth in Home loans. However, LAP and developer book growth has slowed down. Collection efficiency improved to 98% in Jun’21.

This move is in tune with the demand for larger spaces and affordability, and good traction for loans in the ticket size of Rs 5-20m.
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