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Motilal Oswal

Articles By Motilal Oswal

577 Articles

Analyst Corner: Maintain ‘buy’ on Hindustan Unilever with TP of Rs 2,780

Prediction of a normal monsoon, good Rabi harvest, favourably timed kharif sowing, and MNREGA provide prospective support as well. The modern trade (MT) channel was affected.

Analyst Corner: Maintain ‘buy’ on SBI with target price of Rs 530

On a segmental basis, the Corporate segment has reported profits after four years of consecutive losses. On the other hand, Retail PBT has declined 48% YoY, impacted by pandemic-led provisions.

This is primarily attributable to >95% of unsecured credit being offered to government/PSU employees and ~41% of corporate loans being offered to PSUs / govt. undertakings.

Eicher Motors rating – Buy: Performance in line with estimates

New products will be vital to growth; FY22e EPS cut by 7% due to Covid wave and inflation; ‘Buy’ maintained

EPS by 7%, accounting for the COVID impact on volumes and commodity inflation, while maintaining FY23e earnings estimates. Maintain Buy, with TP of Rs 3,200 (Mar’23 SOTP).

Analyst Corner: Maintain ‘buy’ on Coal India with TP of Rs 180

Offtake growth in May 2021 comes on the back of: a) a 15% rise in coal-based generation (based on initial data from POSOCO), amid a 7% rise in overall power demand, and b) re-stocking of inventory at power plants (up 5 mt MoM

CIL, coal india

Analyst Corner: Colgate downgraded to ‘neutral’ with TP of Rs 1,700

Notably, certain factors that led to the positive margin surprise in 4QFY21 and the full-year FY21 — resulting in all-time high EBITDA margins — are not sustainable.

Jindal Steel & Power rating – Buy: Deal improves growth outlook for steel business

Debt level to go down; stock valuation is attractive; ‘Buy’ retained with TP of Rs 539

Motilal Oswal maintains ‘Buy’ rating on ICICI Securities with TP of Rs 650

C/I ratio declined 200bp QoQ and 17pp YoY to 40%. The management has guided at near term C/I ratio above these levels. The lending book grew 37% QoQ to Rs 25.7b.

Distribution revenue was up 22% YoY to Rs 1.41b (QoQ not strictly comparable due to seasonality).

Bandhan Bank Rating: Neutral – In a position to better growth trajectory

Collections have seen strong improvement; ‘Neutral’ retained with TP of Rs 370

Collection trends in the total portfolio improved to ~96%.

Analyst Corner: ‘Neutral’ on Dr Reddy’s; firm gets rights for 250m doses of Sputnik

Dr Reddy’s (DRRD) has exclusive marketing and distribution rights for the first 250m doses of Sputnik V vaccines in India.

dr reddy

IPCA Labs: Reiterate ‘buy’, target price at Rs 2,480

Superior execution, market share gains to drive growth in DF. While doctors have resumed their clinics, partly on account of having received their vaccinations, patient footfall is yet to return to normal levels.

Coromandel International: ‘Buy’ with TP of Rs 1,030

Overall fertilizer industry volumes grew 8% YoY in FY21 on the back of 19% volume growth in MOP; NPKS and SSP volumes grew 17% each for FY21.

To be sure, the sample is heavily stacked in favour of well-performing IT companies, but others haven’t done too badly either.

Britannia Industries Rating: buy-Attractive investment prospects on offer

Strong structural outlook; second Covid wave could boost FY22 EPS; valuations are inexpensive; TP up to Rs 4,575; ‘Buy’ maintained

BRIT’s FY21e revenue of ~$1.8 bn is a fraction of this addressable market.

DMART: ‘Neutral’ rating with TP of Rs 2,878

Recovery trends steady until the second Covid-19 wave hit DMART published its Mar’21 performance, which offers a positive trend before the second Covid wave once again impacted performance.

Reiterate ‘buy’ on SAIL; expect volumes to post 9% CAGR

SAIL, in a press release, informed that it has reduced its gross debt by Rs 161 billion (30%) in FY21 to Rs 353 billion (excluding lease liabilities).

SAIL

Maruti Suzuki: Expect ~30% volume growth in FY22E

We expect ~30% volume growth in FY22E and positive evolution of margin. We see 27% upside at our TP of Rs 8,700/share. MSIL is our top auto pick.

Demand for passenger vehicles was stronger than expected once Covid-related lockdown restrictions were lifted due to shift in preference towards personal mobility.

Divi’s Labs Rating ‘Buy’; Generic API molecules boost outlook

Product offerings and better asset utilisation to drive EPS CAGR of 38% over FY20-23; Buy retained with Rs 4,530 TP

Various factors augur well for our expectation of a 21% sales CAGR to Rs 8 bn over FY20–23.

Steel Authority of India Rating: Buy-Stock best bet on higher steel prices

FY22/23e Ebitda up 34/37%; TP revised to Rs 104; valuations attractive; ‘Buy’ retained

We are raising our FY22e/FY23e Ebitda estimate by 34%/37% and TP by 28% on expectation of higher realisation and volumes. The stock trades at 4.2x FY22e EV/Ebitda, a 25-30% discount to peers TATA and JSTL.

Bharti Airtel: Assign 10x EV/EBITDA to India biz

This deal should also incorporate lease agreements and the sites in these regions. This transaction is expected to be completed by end-FY22.

We value Bharti on an SOTP basis. We assign 10x EV/ebitda to the India business and 6x to the Africa business in FY23E to reach Rs 720/share.

Analyst Corner| HCL: Maintain ‘Buy’; higher exposure to IMS, cloud benefits

HCL remains one the most attractive stocks in our coverage, trading at 15x FY23E P/E (38%/26% discount to TCS /Infosys), despite delivering 20% earnings growth in FY21 YTD.

hcl

SBI Cards and Payments Services rating: Buy; Motilal Oswal says valuations have turned attractive

Growth momentum is likely to accelerate; earnings CAGR of 47% is estimated over FY21-23; upgraded to ‘Buy’

We expect outstanding credit card/spends CAGR of 22%/27% over FY21-23e for the industry. The same for SBICARD would be higher at 27%/32% CAGR.

Maintain ‘neutral’ on Bajaj Auto, target price Rs 3,875

On the core business side, we expect strength in the export markets to continue, especially since the Africa business would see the benefit of higher crude oil prices (with a lag).

Orient Electric rating – Buy: Earnings don’t reflect value of business

Margins likely to converge with its peers; coverage initiated with ‘Buy’ and TP of Rs 350

Endurance Tech rating- Buy: Firm’s the best play on the 2W industry

It has several levers to grow faster than industry; ‘Buy’ retained with TP of Rs 1,750

Endurance Tech rating- Buy: Firm’s the best play on the 2W industry

Analyst Corner: Retain ‘buy’ on V-Mart, TP increased to Rs 3,500

In the last one-year, the Apparel retail sector has been one of the worst hit and is still operating below pre-COVID levels, raising concerns of a permanent business impairment risk to retailers.

v mart

InfoEdge holds 18.4% stake in Zomato, maintain ‘neutral’

Apart from early deliveries (online shopping), exclusive deals, and video/audio content, food delivery is another angle for entry into the prime ecosystem.

Food delivery is through a tab built-in the flagship Amazon app, visible only to customers who are located in the delivery regions.

UPL: Maintain ‘neutral’ view with a target price of Rs 631/share

The pact allows UPL access to key markets prior to the patent expiry and to commercialise Rynaxypyr Active: FMC’s leading insecticide. According to the agreement, UPL will toll manufacture and supply Rynaxypyr to FMC in Ind

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