The brokerage was optimistic on the stock and said that the business model was far from being ‘broken’. Post note ban, the company returned among the best portfolio performance among peers, it said.
On the business’ front, across the cycle, return on equity of 17 percent with 24-25 percent growth is sustainable. Credit Suisse also sees visibility of 24-25 percent growth for multiple years. The earnings per share (EPS) estimates for the company have now been hiked up 1-3 percent upon tweaks in the operational expenditure.
Adani Ports
Brokerage: CLSA
CLSA observed that Adani Ports delivered an all round Q4 beat led by 14 percent year on year traffic growth. The strong volume growth in the company validates the thesis of new ports being the drivers of growth, it said in its report. Going forward, it expects the firm to deliver 54 percent growth in Port EBITDA over FY16-19. On the stock-specific front, the company choosing to unwind USD 551 million in group loans is helping the stock re-rate.
Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 295
The global brokerage said that the balance sheet clean-up was a key positive. The good Q4 result was driven by 14 percent growth in cargo volume, it said. Going forward, it forecast 12 percent CAGR in revenue and 13 percent CAGR in EBITDA over FY17-19. Improvement in trade flows driving higher volume is a key upside risk, while any financial support to group entities is a key downside risk, the report added.
Brokerage: BofA ML | Rating: Buy | Target: Rs 401
The brokerage believes that the current valuation seemed attractive for EPS CAGR of 21 percent and FY19 ROE of 18.5 percent. It also increased its FY17-19 EPS by 8 percent.
Bharat Forge
Brokerage: CLSA | Rating: Buy | Target: Rs 1,300
The Q4 results being better than the expectations was led by better topline growth, CLSA observed. It is seeing a turn around in the operating performance and foresees strong 35 percent EPS CAGR over FY17-20. However, valuations at 32 times FY18 and 23 times FY19 PE look expensive, it said.
Lupin
Brokerage: Lupin | Rating: Buy | Target: Rs 1,350
CLSA termed the company’s March quarter performance to be in line with its estimates, but the outlook for current fiscal was muted, it said. The brokerage house has a cautious outlook, which is driving the 18 percent cut in EPS. Going ahead, it expects a challenging FY18 due to competition and regulatory pressure in the US.
Brokerage: Citi | Rating: Buy | Target: Rs 1,630
The global financial services firm cut FY18/19 EPS estimate by 6.7/9.3 percent and sees delay in FY19 launches. Citi lowered target PE to 25 times to factor in the US pricing pressure.
Brokerage: Nomura | Rating: Buy | Target: Rs 1,491
Nomura sees new launches to remain the key for countering the US sales drop.
Brokerage: JPMorgan | Rating: Neutral | Target: Rs 1,275
The global investment bank sees margin pressure and regulatory newsflow being the key risks in the near term.
Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 1,329
The investment bank believes that weak US led the Q4 miss in earnings. It is now adjusting for higher research and development and one-offs.
Brokerage: Goldman Sachs | Rating: Neutral | Target: Rs 1,360
The brokerage house sees balanced risk reward in the stock. Having said that, it cut 2017-19 EBITDA estimates by 9 percent on slower topline trends.
Dish TV
Brokerage: CLSA | Rating: Buy | Target: Rs 112
CLSA believes that prolonged demonetisation hit the firm, but the D2H merger was a positive. It said that revenue missed estimates by 7 percent due to lower subscription revenue. Lower revenue & EBITDA estimates were by 4-9% led by 3% cut in ARPU assumptions, the brokerage said in its report.
Brokerage: Citi | Rating: Buy | Target: Rs 110
The company may see short-term pain given disappointing operating performance, it said in the report. D2H Merger an GST are positive catalysts for the stock, the report added.
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 135
GST as well as merger Synergies will Drive Stock Performance, it said in the report.
Brokerage: Credit Suisse | Rating: Outperform | Target: Rs 100
The brokerage observed that Dish TV had very weak Q4 as ARPU collapsed. For the stock to have an upside, GST as well as benefits from the synergy are needed, it said.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 115
The brokerage is keeping faith in the stock owing to GST and merger synergies. It recommends that investors utilise any weakness to buy the stock
[“Source-ndtv”]
