Credit Suisse has upgraded Aurobindo to Outperform from Neutral rating with a target price at Rs 750 per share as the stock is attractive for low valuations at 13x FY19 EP
TVS Motor CompanyBrokerage – Citi | Rating – Sell | Target | Rs 700
Citi has a Sell call on TVS Motor with a target price at Rs 700 per share as it feels margin expansion may be limited given aggressive price competition in a scooter.
Ntorq launch should aid in volume growth and the company could gain market share over next few months, it said.
Brokerage – Credit Suisse | Rating – Outperform | Target -Rs 750
Credit Suisse has upgraded Aurobindo to Outperform from Neutral rating with a target price at Rs 750 per share as the stock is attractive for low valuations at 13x FY19 EPS.
The company should benefit from volume gains as large players exit high competition products, it believes.
It has cut EPS estimates by 5.3/1.8 percent for 2018/19 due to a one-off in Q3FY18 & lower US sales.
“Unit IV observations are milder than expected and has low chance of escalation. There are no repeat observations from the April 2017 inspection by USFDA and there are no observations related to out of specification,” Credit Suisse said.
Unit IV accounts for 25 percent of pending ANDAs for the company. The resolution could come within six months, it feels.
Dr Reddy’s Labs
Brokerage – Nomura | Rating – Buy | Target – Rs 3,238
“DFN 02 could be transformational for proprietary product business. The company is expected to fule proprietary migraine drug DFN 02 In 3 Months,” Nomura said while retaining Buy call on the stock with a target price of Rs 3,238 per share.
Stock trades at 20-30 percent discount to peers, it feels.
Brokerage – Nomura | Rating – Buy | Target – Rs 383
KNR is the lowest bidder in Tamil Nadu for a project worth Rs 1,020 crore.
Nomura sees further upside to order inflows if company secures contiguous NHAI projects.
Brokerage – Macquarie
Macquarie expects auto industry to sustain healthy growth in 2018.
Maruti Suzuki is the top pick given its market-leading growth and Eicher Motors is the preferred pick amongst 2-wheelers as Royal Enfield is set for highest volume & PAT CAGR over FY18-20.
“We have outperformed call on Maruti Suzuki, Eicher Motors, Tata Motors, Hero MotoCorp and M&M while we have underperformed rating on TVS Motor, Ashok Leyland and Bajaj Auto.”
In auto component space, the research house prefers Motherson Sumi and has, outperform call on Ceat.
Brokerage – Credit Suisse
Credit Suisse believes a strong pick-up in volume is an indication of a pick-up in the economy. Early festive season helped tractors & 2-wheelers in February while passenger vehicle industry growth continued to disappoint, it said.
The research house has the Neutral call on Maruti Suzuki, Bajaj Auto and Hero MotoCorp with a target price of Rs 9,800, Rs 2,940 and Rs 3,560 per share, respectively.
“We have Outperform call on M&M, Tata Motors & Escorts with target price at Rs 940, Rs 560 & Rs 1,040. We have to Underperform call on Ashok Leyland, TVS Motor & Eicher Motors with target price at Rs 103, Rs 510 & Rs 23,500 per share.”
Brokerage – Morgan Stanley
Direct impact on metals from potential import restriction from US may be limited but the key to watch would be the risk of countermeasures by other countries, Morgan Stanley said.
Indian steel and aluminum exports to the US are less than 1 percent of production and are 5 percent of total production, respectively.
Potential increase in steel imports into India is unlikely, according to the research house.
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