ith maintaining high conviction outperform rating on L&T and target of Rs 1,417 per share, Macquarie said profit in Q1 was in-line with consensus, but 12 percent ahead of its estimates.
Key story was sharp uptick in domestic revenue growth especially infrastructure business, it said. L&T is set for significant earning upgrades for FY18/19 and the stock is compelling at 19x FY19 earnings with uptick in infra investments.
JPMorgan | Rating – Overweight | Target Rs 1,925
While retaining overweight call on L&T with a target price of Rs 1,925, JPMorgan said June quarter order inflow dip was predictable.
The company has to bag big defence & Mumbai urban infra orders to meet the guidance. The research house expects neutral to positive impact of Q1 earnings on stock performance.
Credit Suisse | Rating – Outperform | Target Rs 1,373
Credit Suisse said the only silver lining in the Q1 was domestic execution. The research house has maintained outperform rating on the stock but slashed target price to Rs 1,330 from Rs 1,373 following cut in FY18/FY19 EPS estimates by 4.7 percent on lower profitability.
Bank of America Merrill Lynch | Rating – Buy | Target Rs 1,322
Bank of America Merrill Lynch has maintained buy call on the stock with a target price of Rs 1,322, saying Q1 surprised positively on strong domestic execution. Large order backlog & execution pick-up would help meet FY18 guidance, it feels.
Jefferies | Rating – Buy | Target Rs 1,533
Jefferies has also retained its buy rating on L&T, with 32 percent upside to target price of Rs 1,533. It said order pipeline of USD 50 billion should help co meet the full year guidance and macro tailwinds needed for the next leg of upside.
LIC Housing Finance
Deutsche Bank | Rating – Hold | Target Rs 650
Deutsche Bank has hold rating on LIC Housing Finance, with a target price of Rs 650. At 2.4x FY19 price-to-book value, the stock is fairly valued, it feels.
First quarter marked revival in mortgage disbursement growing at 16.6 percent YoY, it said. The research house has trimmed FY18 EPS estimates by 3 percent on 5 bps lower NIM expectations.
CLSA | Rating – Buy | Target Rs 860
CLSA has reitrated its buy rating on the stock with increased target price at Rs 860 from Rs 810, but cut earnings estimates by 2-3 percent.
Slippages mostly in corporate & home loans, partly due to demonetisation, he said, adding the key Positive was the uptick in disbursement growth. The brokerage house still expects a healthy 16 percent CAGR & an return on equity of 19 percent over FY17-20.
Morgan Stanley | Rating – Overweight | Target Rs 750
Morgan Stanley has overweight call with a target price Rs 750 on LIC Housing Finance, saying NIM pressures appeared to be surfacing faster than it had expected.
NII growth was at 11 percent YoY but 6 percent below its estimate, Morgan Stanley said.
CLSA | Rating – Buy | Target Rs 186
CLSA has buy call on NTPC with a target price of Rs 186, saying project commissioning raised hopes.
Regulated equity was up 5 percent and PAT was muted by planned shutdown & wage hike. The research house is unlikely to see retirement of company’s low-cost plants until FY21.
Nomura | Rating – Buy | Target Rs 200
While maintaining buy call with an unchanged target of Rs 200, Nomura said it expects FY17-19 normalised EBITDA/EPS CAGR at 19/16 percent.
JPMorgan | Rating – Overweight | Target Rs 185
JPMorgan has overweight call on NTPC, with a target price of Rs 185.
Jefferies | Rating – Hold | Target Rs 176
Jefferies has maintained hold rating on India Cements, with a target price of Rs 176.
Q1 net income slipped due to lower volumes, muted realisation growth, and volumes impacted due to weak demand in southern markets, it said.
Jefferies said it would watch out for volumes growth in Q2 & revisit estimates.
The research house prefers Dalmia Cement in the cement space.
Credit Suisse | Rating – Outperform | Target Rs 1,500
Credit Suisse has maintained outperform rating on the stock with a target price of Rs 1,500.
Biggest risk to a sustained turnaround is a stepping up in irrational competition, it feels.