Brokerage: CLSA | Rating: Outperform | Target: Rs 1,310
CLSA said that the strong cash flow generation, driven by top US products is a key positive for the company. Meanwhile, a sharp decline in Japan margins is a key negative. Further, it has cut FY18-19 earnings per share by 2 percent.
Brokerage: CLSA | Rating: Buy
The brokerage highlighted that the merger with Shriram Transport will be near neutral for the bank as its return on equity (RoE) will expand. For IDFC, a new structure may take the holding company discount less relevant.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 421.33
The global research firm said that the company is a beneficiary of unfolding global biosimilar opportunity. It sees EM monetisation to gain ground in 2017, while EU and US monetisation is seen in 2018 and 2019, respectively. Having said that, FY18 could be challenging for earnings.
Brokerage: Citi | Rating: Buy | Target: Rs 405
Citi highlighted that the inspection by the French regulator on non-compliance adds some uncertainty.
Brokerage: Morgan Stanley | Rating: Equalweight | Target: Rs 475
The research firm said that the company was steadily ramping up its portfolio with new project acquisitions. Meanwhile, it also observed that its balance sheet was stretched with near gearing at 171 percent.
Brokerage: JPMorgan | Rating: Neutral | Target: Rs 1,310
JPMorgan observed that the stock was pricing in positive equity value for Reliance Jio. For the company, tariff plans and low price handset are key focus areas.
(Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)
Financials
Brokerage: CLSA
CLSA expects small private banks and housing finance companies to report healthy growth. Furthermore, private banks and State Bank of India’s (SBI) profit could be stable, but other PSUs may report a sharp fall. It also expects smaller private banks to lead with over 25 percent year on year profit growth.
Going forward, asset quality and provisions may drive volatility in profit against the backdrop of large upgrades. A 10 percent change in provisions can impact its profit estimates by 19 percent.
Telecom
Brokerage: CLSA
The channel checks point to an aggressive 4G feature phone launch by Reliance Jio. The telecom major’s target market for a new offer would be 150 million feature phone users. Its channel checks also suggest that Jio’s offers could end, implying a relief for incumbents.
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