Broker Radar for March 22

Check out the stock commentaries and recommendations from brokerage houses.

Mar 22, 2019 08:03 IST India Infoline News Service

HSBC on Indian Aviation
  • Domestic traffic growth slowest as fares seem to have moved north, denting demand. Load factor down despite capacity (seats) growth.
  • SpiceJet leasing Jet’s plane means capacity would remain which could accelerate competition and bring yield under pressure.
Citi maintained ‘Neutral’ on Vodafone Idea with a TP of Rs39
  • Attractive rights issue pricing to ensure successful capital raise.
  • Steep discount to drive healthy minority participation. Continue to have a neutral rating as uncertainties still remain.
CLSA maintained ‘Sell’ on Vodafone Idea with a TP of Rs27.
  • Rights issue at a steep discount resulting in huge dilution.
  • Rights issue to help fund interest and capex spend in the near term.
  • Further capital infusion will likely be needed beyond 2020-21.
Jefferies maintained ‘Buy’ on Maruti Suzuki with a TP of Rs7,600.
  • Suzuki and Toyota expanded the partnership to new areas including the supply of Ciaz & Ertiga to Toyota India.
  • Access to Toyota's technology will be key to Maruti's long-term prospects, particularly in EVs.
  • This means concessions by Maruti’s crown jewel in various forms which investors need to factor.
CLSA downgraded to ‘Sell’ from ‘Underperform’ on Kansai Nerolac; cut a TP to Rs385 from Rs450.
  • Demand headwinds as the auto sector reels under pressure.
  • Weak macroeconomic environment raises concern over decorative demand.
  • Concern over margin with a rise in crude, though strong rupee and price hikes are positive.
CLSA maintained ‘Buy’ on ICICI Prudential; hiked a TP to Rs450 from Rs430. Protection to be the largest contributor to VNB by 2020-21. VNB volatility will be significantly lower than premium volatility. Lift VNB estimates for FY20-21 based on higher premiums and wider margins.

Jefferies on Finolex Cables downgraded to ‘Hold’ from ‘Buy’; maintained a TP at Rs525. Positives seem priced in, post sharp rally. Cautious on a tepid ramp-up in 'New Products. Expect revenue and net profit to grow at a compounded annual growth rate of 14% and 12% respectively over FY18-21.

Nomura on Maruti Suzuki: Global collaboration between Toyota and Suzuki deeper and wider than expected. Key benefit is the availability of hybrid technology in India without making much investment. Will become more relevant in India as emission norms tighten to BS-6 in 2020. The agreement should be win-win for both Maruti Suzuki and Toyota in India.

Source: Media reports

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