BROKERAGE RADAR
CLSA ON VOLTAS: ET NOW
* maintain sell, cut target to `305 from `345
* Demonetization to hurt earnings and risk derating
* Ban of high-denomination currency likely to exert pressure on UCP demand in near term
* Lack of clarity on transition impact of GST rollout, will create uncertain envt for next 2 qtrs
* cut FY17/18 EPS estimates by 2-5% with potential downside risks
GS ON VOLTAS: ET NOW
* maintain buy, target under review
* First Take: Weak EMP partly offset by strong UCP
* Co attributed decline in revenues to lower revenues in international projects
* EMP revenues fall attributed to slower-than-expected progress on some projects
* Domestic industrial environment remains challenging for capital equipment sales
DB ON IGL: ET NOW
* maintain hold, target at `720
* On track to deliver robust earnings growth, maintain Hold on valuation
* Forecast 17% CAGR in FY16-19 EPS, driven by 9.5% CAGR in volumes
* Well placed to benefit from lower domestic natural gas price
* Greater govt focus on increasing city gas sales to control air pollution in Delhi is positive
* Stock trading at 5-year highs with FY18E P/BV of 3.4x & P/E of 17x (three-year average of 13x)
GS ON IGL: ET NOW
* maintain sell, target at `625
* expect 10%/6% volume growth in FY17E/18E
* see realizations declining 2% QoQ based on price revisions at start of 3Q
* see risk/reward as unattractive due to demanding valuations
* share price already factors in 1QFY17 peak margins, high vol growth over longer term
MS ON BHARAT FINANCIAL: ET NOW
* maintain overweight, target at `1125
* Stock will likely continue to remain volatile in near term
* See demonetisation more as administrative hassle than structural threat to biz model
* impact on near-term biz, earnings will depend on pace at which normalcy in cash levels are restored
* Structurally current events could add further fillip as supply of credit from informal channels will weaken
* There could be a quarter or two of weakness; continue to like stock from medium-term perspective
HSBC ON BHEL: ET NOW
* Upgrade to Buy from Reduce; raise Target to `183 from `111
* Sustainable biz recovery is now visible; market could double in next 2-3 years
* Forecast market leader BHEL to report 97% EPS CAGR in FY17-19 on a low base
* New emission norms, govt's efforts to upgrade 34 GW of old capacity likely to kick-start recovery
* BHEL should benefit from a market rebound as well as an earnings recovery
* forecast BHEL to capture 60-65% of industry volumes thereby increasing visibility on earnings recovery
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