Brokerage: Citi | Rating: Buy | Target: Rs 380
The global financial services firm expects cigarette volumes for the company to grow at 3.5-4 percent over the next three years. Meanwhile, it expects cigarette prices to see modest declines between 1 and 5 percent depending on the price point GST. It is forecasting over 15 percent earnings before interest, taxes, depreciation and amortisation (EBITDA) CAGR over FY17-20 and this rise, it said, should drive a re-rating of the stock.
Brokerage: CLSA | Rating: Buy
CLSA’s channel checks indicate that the company has reduced prices of cigarettes by 1-2 percent. It added that the company may have cut prices in states with higher value added tax (VAT). After this cut, retail prices are now in line with states having low VAT, it said, adding that further cuts are less likely now.
Brokerage: Credit Suisse | Rating: Outperform | Target: Rs 2,060
Credit Suisse is placing its bet on the stock due to domestic pick up and steady profitability across segments. It expects the company to benefit from the ongoing public infrastructure demand and a pick-up in private industrial capex.
On the company’s Q1 results, it believes the numbers could be strong on better execution and profitability of EPC business. The inflows, it believes could be flat year on year and expects 7 percent year on year growth in FY18.
The domestic execution is also likely to see a pick-up over FY17-20 due to healthy order backlog. Having said that, it is building over Rs 9 per share loss from Hyderabad Metro over FY19-20.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 588.
The global research firm highlighted that JLR posted 5 percent year on year growth in global wholesales in June against 2 percent year on year growth in May. Further, it expects new models, better mix and receding forex losses should drive earnings. Having said that, a key risk to the stock is the underlying industry slowdown.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 575
The brokerage observed that Land Rover drove the growth in June dispatches. Further, it expects growth to improve from July as sale of Range Rover Velar begins. Meanwhile, sales of Jaguar increased 16 percent yoy on the back of strong growth in F-Pace and XF sales. Later in the day, Jaguar E-Pace SUV will be unveiled and it expects sales to start in Q4. JLR sales volume and discount trends are the key risks to the stock.
Brokerage: Goldman Sachs | Rating: Sell
Giving a preview into the Q1 results for the IT bellwether, Goldman Sachs expects a sequential revenue growth of 1.7 percemt at USD 2612 million, while dollar constant currency growth of 6.8 percent is seen as well.
Sequentially, it expects EBIT margin to decline by 120 bps on visa charges in the first quarter. It also feels that delayed wage hikes will negatively impact EBIT margin by 160 basis points. The research firm sees a downward reaction to the stock on any disappointment on guidance and buyback.
Brokerage: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 436
BofAML expects the company to channelise the Indian operations cash flows towards repayment of debt. A negative impact from Africa could reduce as it is showing improvement in profit before tax and EBITDA. Meanwhile, it said that Africa’s contribution to revenue/EBITDA to decline to 20%/13% by FY20
Oil and gas
Brokerage: Credit Suisse
The research firm believes that a slowdown in industrial fuel and petcoke sales masked the robust transport demand in June. The diesel demand, meanwhile, is the strongest in fourteen months despite weak freight. It is positive on OMCs in the long term despite near term headwinds.