Tuesday, 26 September 2017

Buy, Sell, Hold: 7 stocks and 2 sectors are on analysts’ radar today

Titan, Hero Moto and financials, among others, are being tracked by investors on Tuesday.

NSE stock tipsAdani Trans

Brokerage: Edelweiss Sec | Rating: Initiate coverage with buy | Target: Rs 154

The brokerage house expects operating profit and net profit to grow at CAGR of 19 and 36 percent, respectively, over FY17-19. It also said that domestic transmission, debt recast and additional leveraging will drive economy and synergy benefits.


Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 625

The global financial services firm observed that Q2 demand could be subdued due to advancement of purchase in Q1 due to GST. Further, it said that sustaining high proportion of exchanges is creating a tailwind. In fact, it expects the stock to take a breather for the short term. Jubilant Food & Titan are the top picks in the consumer discretionary space, it added. NSE STOCK TIPS

Coal India

Brokerage: Nomura | Rating: Neutral | Target: Lowered to Rs 260

Nomura observed that the earnings risk is quantified, while coal price revision is imperative. Further, no revision in non-coking coal prices is key downside risk to the stock. It also cut FY18-19 EPS by 16%/10%. Meanwhile, FY18-19 Normalised EPS is At 2-3% below mean consensus.

Hero Moto

Brokerage: UBS | Rating: Upgrade to Buy | Target: Raised to Rs 4,750

The research firm said that double-digit volume growth over FY17-19 to drive a re-rating. It raised FY18 2-wheeler industry sales growth forecast from 10% to 12%. At the target, stock could trade at 23 times FY19, in line with average for domestic auto OEMs.

Century Ply

Brokerage: IIFL Sec | Rating: Buy | Target: Rs 330

IIFL expects the company to record strong 20/18/15% Rev/EBITDA/PAT CAGR over FY17-19. In fact, FY18 margin is likely to decline owing to high core & face veneer prices in international markets.

Avenue Supermarts

Brokerage: Goldman Sachs | Rating: Initiate with Buy call | Target: Rs 1586

The global investment bank added the stock to high conviction list. Its 12-month target implies an upside of 53 percent.


Brokerage: CLSA

The brokerage house said that implementation of Saubhagya scheme is a challenge. Further, it believes that India needs on-ground political will and viable business models for discoms. CLSA remains defensive on power and has a buy call on utilities.


Brokerage: Macquarie

The research firm maintains cautious stance on entire sector banks, NBFCs and insurance. It prefers playing the value unlocking in insurance via holding companies such as ICICI Bank and HDFC. HDFC Bank & YES Bank are its top picks in the sector.

Monday, 25 September 2017

As India readies for big $7 bn infra push; these 12 stocks likely to benefit the most

Here is a list of stocks recommended by various experts which are likely to benefit the most from govt’s decision to introduce fiscal stimulus:

free stock trails tipsJust when everything was going right for the Modi-led government, growth pangs was not something which they had in mind. The economy which was crowned as the fastest growing economy in the world suffered sharp fall in growth rate which hit a 3-year low in June quarter.

Some amount of slowdown was expected especially after demonetisation and implementations of the goods & the services tax, but nobody hoped that the growth rate will fall from 9 percent in 2016 to 5.7 percent in 2017.

D-Street is abuzz with news of a big stimulus package which could be as big as USD 7.7 billion, Reuters reported last week.

The extra spending was estimated to widen the fiscal deficit for the financial year ending next March to 3.7 percent of GDP from a budgeted target of 3.2 percent.

“Stimulus can potentially increase the central government’s fiscal deficit to 3.5-3.7 percent of GDP in FY18, from the budgeted 3.2 percent target (3.5 percent of GDP achieved in FY17), depending on the size of the stimulus (0.3-0.5 percent of GDP),” Deutsche Bank said in a report.

This would be a setback to the fiscal consolidation momentum that was endured through the past few years. To counter any pessimism on D-Street, the government should clarify that this is a just one-off measure to counter slowdown cause by demonetisation and GST.

The extra money will be spent more on bank recapitalisations, rural jobs programme and rural housing to boost growth in Asia’s third-largest economy. Free Stock trails tips

“The India’s GDP growth unpredictably slowed in the first quarter of FY18 at 5.7 percent. With the government facing a host of criticism from the various stakeholder, the rescue effort to boost the economy trajectory has uplifted a sentiment as it prepares to stimulate the economy through the packaged offering,” Dinesh Rohira, Founder & CEO, 5nance.com.

“Despite an enfolded roadmap on the table, the probability of government stimulating through affordable housing has raised confidence set-up in the Indian economy,” he said.

However, any policy measure is unlikely to derail expectations of Modi government 2.0. The next general elections are scheduled in 2019. Fiscal slippage risks will naturally make the RBI more cautious and defensive regarding their monetary policy stance and probably mark an end to the ongoing rate cutting cycle, suggest experts.

“Modi government is always known to take some bold steps. BJP claims that the process may increase job opportunities and will help in increasing the GDP. After demonetization and GST massacre the next is a stimulus package,” Ritesh Ashar – Chief Strategy Officer, KIFS Trade Capital told Moneycontrol.

“The stimulus package seems to be a positive step as it will directly affect housing, Infrastructure companies & allied industries. The government was not particularly worried about the headline GDP growth number, which slowed to 5.7 per cent in the first quarter of FY18. Rather than growth, job creation is a priority for the government,” he said.

We have compiled a list of stocks recommended by various experts which are likely to benefit the most from govt’s decision to introduce fiscal stimulus:

Brokerage Firm: Axis Direct

Ramco Cement

After consolidating its position as a premium retail brand in South India, the company has planned for expansion in Eastern India, to completed by FY19; capacity addition in East India to reduce dependency on South Indian market.

A Strong brand with premium pricing in its home markets of Tamil Nadu (TN) and Kerala enables it to command highest EBIDTA/tonne in the industry.

Already excess clinker capacity in TN would enable Ramco to expand its capacity by just adding grinding units. No significant capacity additions by peers in the industry to help Ramco improve its pricing power in near future.

Supreme Industries

Around 12 percent volume growth led by (1) government initiatives – increased spending on irrigation, water supply, focus to double farmer income, etc. (2) affordable housing for all, and (3) increasing share of business for organized players due to confluence of GST, RERA and demonization is expected in FY18.

Supreme Industries is an investment idea with an investment horizon of over 3-5 year because of consistent growth (~15 percent p.a.), sustainable margin trajectory, RoCE focus, strong FCF generation leading to debt-free status by FY19, and regular dividend payout.

Kajaria Ceramics

The management is intending to improve the share of high value-added vitrified tiles thereby enhancing the realizations and margins.

Kajaria Ceramics would be a big beneficiary of the shift from unorganized to the organized sector in post GST scenario. Commissioning of brownfield and greenfield capacity expansion in FY18 is expected to benefit from a rise in demand from the revival of real estate sector following the push for affordable housing segment.

CanFin Homes

South India based housing finance company predominantly focused on salaried class and growing at upwards of 30 percent per annum. CanFin Homes has a well-capitalized balance sheet to support the exemplary growth trajectory.

It has reduced its dependence on bank borrowings; enhanced borrowings from debt markets have helped reduce the cost of funds. CanFin homes to be a Big beneficiary of the push for affordable housing on the back of higher growth, NIM expansion and stable cost.

Gruh Finance

Steadily growing loan book with the contained cost of funds; the company operates solely in affordable housing segment and has marked the presence in rural areas especially western parts of India with expansion plans to other geographies.

Gruh Fin. has best in class return ratios along with efficient use of capital. Strong loan book growth with 30 percent plus RoEs to help the company benefit from the push in affordable housing segment.

Government is also working on an idea which is being actively considered is to free up large land held by PSU which is mostly in the prime localities of the city could lead to a boost to the sector and also a booster to PSU Companies.

Analyst: Dinesh Rohira, Founder & CEO, 5nance.com

Housing Finance Segment: - DHFL, PNB Housing, GIC Housing

Affordable housing finance is set to be a Rs. 6 trillion business in next 7 years and, it anticipates that about 25 million demand for housing is expected to come from medium-income & lower-income group in the same period.

A combined afford from the government through stimulus policy & strong regulatory ease coupled with rising urbanization & changing lifestyle, the growth predictability in housing finance segment remain intact for the selected stock.

Similarly, DHLF, PNB Housing and, GIC housing reported a considerable growth in net profit for the Q1FY18 at 29 percent, 93 percent and, 25 percent respectively.

The company also witnessed substantial growth in loan book, while its gross non-preforming asset remaining flat. The niche offering from this company is further expected to boost the ticket-size as it focuses to penetrate in the urban & semi-urban market in an effort to realise the government’s vision for affordable housing by 2022.

Cement Segment: - UltraTech Cement, Grasim Industries

Despite a muted growth in a cement sector on the backdrop of poor infrastructure development, the sector is expected to witness growth as government focuses to improve infrastructure coupled with housing program in its stimulus policy to drive the economy growth.

Current cement industry has a total capacity of 435 million tonnes per annum, while it utilizes only 280 MT for meeting the domestic demand, thus providing a scope for growth in medium-term.

Although facing a headwind on the backdrop of destocking in the value-chain from GST regime, UltraTech Cement & Grasim Industries reported a rise in net profit for the Q1FY18 at 9.5 percent and 9.4 percent respectively.

The company also witnessed a considerable growth in volume over the same period. UltraTech Cement also completed the acquisition of cement plants from Jaiprakash & Jaypee cement which is expected to enhance the volume growth, while Grasim is also planning to outline investment plan to expand its capacity

Paints & Ply: - Berger Paints, Century Plyboards

The companies under home improvement are also the ultimate beneficiary of this policy development. The boost in the housing sector will certainly ease at improving the company’s margin over a medium-term after a long halted growth.

Analyst: Ritesh Ashar – Chief Strategy Officer, KIFS Trade Capital

L&T Finance

L&T Finance is amongst the top 5 NBFC present in the market available at lower valuations. The market cap of L&T Finance is higher than all listed public sector bank except State Bank of India.

LTFH has a housing finance book of INR125b with a diversified product suite, comprising home loans, LAP, construction finance and LRD. Home loans and LAP constitute 60 percent of the overall book, while corporate loans account for the remaining. LTFH entered the 2W financing business via the acquisition of Family credit.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Friday, 22 September 2017

New Listing: Reliance Home Finance locked at 5% upper circuit; opens at Rs 107.2

The company had been hived off from Reliance Capital and investors had received one share of Reliance Home Finance for every share of Reliance Capital held.

stock nifty trading tipsShares of Reliance Home Finance made its debut on the exchanges on Friday, trading at Rs 107.2 in the opening tick on the NSE. The stock was locked in the upper circuit.

The stock traded with volumes of 6.24 lakh shares on the National Stock Exchange.

The company was hived off from the umbrella of Reliance Capital with September 6 as record date. As part of the process, investors must have received one share of Reliance Home Finance for every share of Reliance Capital held.

The move is expected to unlock value for the existing shareholders of the firm, Reliance Capital said in a statement. STOCK NIFTY FREE TIPS

After the demerger, Reliance Capital will continue to hold a 51 percent stake in Reliance Home Finance.

The transfer was earlier approved by an overwhelming majority of 99.59 per cent votes in favour of the scheme of arrangement at the Tribunal-convened general shareholders meeting held in July.

Reliance Home Finance, a 100 per cent subsidiary of Reliance Capital, provides a wide range of loan solutions like home loan, loan against property, construction finance and affordable housing loans. It has assets under management of Rs 13,022 crore as of June 30, 2017.

At 10:04 hrs Reliance Home Finance was quoting at Rs 109.20, on the BSE.

Tuesday, 19 September 2017

Buy, Sell, Hold: 3 stocks and 4 sectors are being tracked by analysts today

HDFC, Somany and pharma, among others, are on the radar of investors on Tuesday.

commodity trading tipsHDFC

Brokerage: JPMorgan | Rating: Overweight | Target: Hiked to Rs 1,975

The global research firm expects steady earnings growth and minimal asset quality risk. Further, it also expects earnings per share (EPS) to growh at 15 percenr CAGR over 3 years. It values HDFC Life At Rs 55,000 crore, implying price/embedded value of 4.4x (FY17). It views HDFC as a defensive stock.


Brokerage: Nomura | Rating: Buy | Target: Hiked to Rs 880

The global broking firm sees a potential upside of 45 percent in the stock and believe that US launches and out-licensing deals will positively impact earnings. Further, it said that approval of four key drugs will add USD 50 million with EPS impact of Rs 9 per share in FY19. It also said that the out-licensing will generate upfront payments of more than USD 100 million.

Somany Ceramic

Brokerage: IIFL Sec| Target: Rs 967

The brokerage house has initiated coverage on the stock with a potential upside of 20 percent. it expects revenue growth to bounce back to 18 percent in FY19 and sees acceleration in tile segment & ramp-up of brownfield capacity. it also expects consistent strong performance, healthy balance sheet and low leverage. Commodity Trading Tips


Brokerage: Goldman Sachs

The global investment bank observed that the sector continues to underperform and new launches are the key to this. Further, it said that the stock is still not pricing in a bear or stress case. It likes Aurobindo due to continued momentum in product launches and valuations. Meanwhile, it has a sell on Cipla as it does not see disproportionate growth from the US.


Brokerage: IIFL

IIFL said that digitization will help Zee and Sun. Further, it expects EPS to grow at CAGR of 23/16 percent for Zee/Sun over FY17-20. It sees Zee’s total revenue to grow 6%/17%/14% for FY18/19/20, while Sun’s total revenue could grow 9%/21%/16% for FY18/19/20. Having said that, Dish TV could face a bigger threat from 4G/FTTH and feels there is a need to reinvent.

Oil Marketing Cos

Brokerage: Morgan Stanley

Morgan Stanley has turned more bullish on gas utilities as it sees a multi-year growth cycle ahead. This view, it said, bodes well for oil refiners as well. In this sector, the research firm’s key picks include Reliance Industries, IOC, Petronet LNG, GAIL and BPCL. It also highlighted that OMCs have the balance sheet, scale and an intent to support gas in many ways. In fact, it estimates gas to replace half of fuel oil consumption in the industries by 2021.

On oil and gas companies, the company also sees OMCs as key enablers in raising India’s gas demand by 50 percent by FY22. It added that the OMCs were leading and have the capability to support USD 30 billion gas investment need.

Banking Sector

Brokerage: CLSA

The global research firm said that loan growth remains moderate with limited capex activity. Further, it said that private banks are seeing potential for market share gains from PSU banks. Retail continues to drive growth across banks, but share of unsecured lending is rising and said that lowering interest on savings deposits can bring down funding cost by over 15 bps.

Monday, 18 September 2017

Buy, Sell, Hold: 8 stocks and 1 sector on analysts’ radar today

TCS, Infosys, Wipro and among others being tracked by investors on Monday.

Free trails trading tipsTCS

Brokerage: Goldman Sachs | Rating: Neutral | Target: Rs 2,232

The global brokerage house raised estimates for earnings per share for FY18/19/20 by 1/3/4 percent.


Brokerage: Goldman Sachs | Rating: Upgrade to Neutral from Sell | Target: Rs 799

Goldman Sachs said that the stock looks fairly valued at the current levels.


Brokerage: Goldman Sachs | Rating: Downgrade to Sell from Neutral | Target: Rs 238

The research firm said that it sees EPS growing at CAGR of 3 percent over FY17-20. Further, it believes that headwinds for the stock could be an underperformance in quarterly earnings and market share loss.

Petronet LNG

Brokerage: Jefferies | Rating: Buy | Target: Raised to Rs 280

The global research firm said that the EPS could grow at a CAGR of 13 percent over FY17-21, while the utilization from its Kochi unit may rise to 11/29/39 percent in FY19/20/21.

Tata Motors

Brokerage: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 515

The global research firm said that the second half of this fiscal could improve on new product launches and change in the hedging policy. The company could also see production ramp up to be quicker in the future. Free Trails trading tips


Brokerage: CLSA | Rating: Buy | target: Rs 560

CLSA said that ICICI Pru was among its top picks in the sector and sees RoEV of 17-19 percent in FY18-20. The company is also well capitalized with a solvency ratio of 290 percent. A cut in dividend payout, it added, would improve the EV growth.

Crompton Cons

Brokerage: CLSA | Rating: Buy | Target: Rs 270

CLSA expects pumps biz to post 16% revenue CAGR over FY17-19 and sees agricultural pumps to be a large opportunity. Moreover, a focus on go-to market capability and EESL orders could support growth and a successful execution could lead to a re-rating of stock.


Brokerage: CLSA | Rating: Buy | Target: Rs 380

CLSA highlighted that the bank expects NPL addition to be sharply lower in FY18, while the retail loans could drive 15-16 percent growth in domestic loans. It sees a rerating potential once asset quality concerns abate.


Brokerage: Credit Suisse

Credit Suisse said that overall power demand remains weak. Meanwhile, the month of August was better at 8 percent but it has not sustained in September. It also highlighted that the power market remained strongly in surplus, while all India PLF is still well below 60 percent. This figure could remain below 70 percent till FY22.

Friday, 15 September 2017

Buy, Sell, Hold: 7 stocks and 1 sector are on analysts’ radar today

ICICI Pru, Voltas and Idea, among others are on the radar of investors on Friday.

stock market free tipsICICI Pru

Brokerage: CLSA | Rating: Buy | Target: Rs 560

The global research firm said that ICICI Pru was among its top picks in the financials space. Further, it said that the firm was focusing on growth with better profitability and said that India offered strong macro growth drivers for life insurance. Going forward, it sees healthy growth premiums and a cut in dividend payout will improve EV growth.


Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 565

Morgan Stanley said that IASI divestment transaction has no implications on the company’s existing relationship with UTC. Further, it added that the company’s exit signals risk to its estimates, but is not material to overall earnings. Stock market free tips


Brokerage: BofAML | Rating: Neutral | Target:

Bank of America Merrill Lynch said that domestic presents growth opportunity on current base with rural electrification. It also said that the company expects MEP margins to trend up to 7%; may take 3-5 years in their view.

Brokerage: Buy | Rating: Buy | Target: Rs 660

With legacy projects behind, the management expects 5-6% EBIT in the near term. It further said that the stock was trading near its peak multiple which may sustain.


Brokerage: UBS | Rating: Sell | Target: Rs 73

The brokerage house said that Mumbai-Ahmedabad bullet train opportunity is too small and too far. The contract implies Rs 10-11 billion annual revenue — 3% of FY18 revenue estimates.


Brokerage: HSBC | Rating: Reduce | Target: Rs 77

HSBC said that the company’s standalone tower assets sale could be at a discount. While leverage remains a concern, it sees net debt/EBITDA for 2018 at 6.4 times. It also said that benefits of synergy from merger with Vodafone is a key medium-term catalyst for the firm.

Power Grid

Brokerage: Jefferies | Rating: Hold | Target: Rs 200

Jefferies said that the company’s weak bid pipeline points to medium-term risk and believes that the company is a gradual re-rating case.

Tata Communications

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 790

Minority shareholders will benefit if VSNL land is demerged, the report added. Further, the land parcel is valued at Rs 289 and the target will be hiked to Rs 1,071 if the land demerger goes through.


Brokerage: Macquarie

The global research firm said that the sector’s FY18 dollar revenue growth may be same or below FY17. It likes Hexaware and L&T infotech from midcap space.

Tuesday, 12 September 2017

Buy, Sell, Hold: 10 stocks and 1 event are on investors’ radar

Tata Steel, IndusInd Bank, and ICICI Bank, among others are being tracked by investors today.

stock free tipsTata Steel

Brokerage: PhillipCap | Rating: Buy

The brokerage firm said that RAA nod from pension regulators is a positive for the stock and this final approval was the last key milestone for pension resolution. Further, it expects Thyssen JV to be announced soon post after this approval.

Brokerage: HSBC | Rating: Buy | Target: Rs 750

HSBC said that the approval of Registrar Accreditation Agreement now paves the way for merger with Thyssenkrupp. In fact, this merger will consolidate European steel industries further. The merger could help unlock synergies, it added. indian stock tips

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 741

The global research firm said that the pension issue is resolved and the focus now shifts to the potential JV with Thyssenkrupp. The merger will be a positive for both companies, it added.

Axis Bank

Brokerage: Edelweiss Securities

The brokerage observed that the bank had strong retail loan book growth and expects corporate loan growth to recover. Further, it said that the lender had stable asset quality and NPA issues have bottomed out. It recommends holding from a long term perspective.


Brokerage: Edelweiss Sec | Rating: Hold

The brokerage observed that the stock was maintaining a minor drawdown in its upward move. It saw crucial supports at Rs 1,780 / Rs 1,750.


Brokerage: Edelweiss Sec

The brokerage said that continued traction on retail loans & corp book recovery augur well for the stock. It expects margin to improve due to improving liability and asset mix. Additionally, it said that the asset quality was stable and is expected to improve. In fact, the bank is an interesting value unlocking play. It sees major resistance at Rs 320, while crucial support is seen at Rs 290.

Kotak Mahindra Bank

Brokerage: Edelweiss Sec

Edelweiss Securities said that the bank had among the best underwriting standards in the banking industry. The medium term trend for the lender is up and momentum oscillators have turned bullish. Moreover, its price pattern suggests that it can move towards Rs 1,200 in the medium term.

Deccan Cements

Brokerage: ICICI Securities | Target: Rs 700-725

ICICI Securities sees sales and EBITDA growing at a CAGR Of 9.9% & 21.4% over FY17-19. It has assigned an EV/EBITDA multiple Of 6.5-6.7x For FY19.

Cochin Shipyard

Brokerage: ICICI Sec | Rating: Buy | Target: Rs 725

It expects revenue, EBITDA & PAT CAGR of 14.2%, 13.3% & 10.5% For FY17-19. It values the company at 25x FY19 EPS of Rs 29.

IndusInd Bank

Brokerage: UBS | Rating: Neutral | Target: Rs 1,800

UBS sees merger with Bharat Financial Inclusion to be EPS accretive by FY19-20. The neutral rating is due to existence of NPL risks from mid-corp segment.

Brokerage: Macquarie | Rating: Outperform | Target: Rs 1,625

The global research firm said that the Bharat Fin merger could increase bank’s RoA by 9 bps and the merger could increase the bank’s MFI exposure to 10 percent of loans. Having said that, it does not expect a boost to CASA ratio from the merger.

Brokerage: IDFC Securities | Rating: Overweight | Target: Rs 1,725

IDFC believes that the merger will be capital accretive, positive on RoE and RoA on FY18/19. It expect swap ratio of 1.6-1.7 shares of Bharat Fin for every share of IndusInd Bank.

IndusInd Bank-Bharat Fin

Brokerage: Deutsche Bank

The bank sees an imminent deal between the two entities, which could be a positive. It added that long-term effects are immense as IndusInd becomes a dominant player in MFI space.


Brokerage: Jefferies | Rating: Assume coverage at buy | Target: Rs 1,320

Jefferies likes the company’s execution on product innovation & steady distribution expansion. Volume growth, rise in margin should underpin 16.7% EPS CAGR in FY17-20.

Coal India

Brokerage: Morgan Stanley | Target: Underweight | Target: Rs 221

Morgan Stanley said that a volume growth recovery is likely and is factored in its estimates. It said that units were expected to raise inventory to normalised levels in coming months and any potential increase in the cost vs guidance key for stock performance.