Broker Radar for August 13

CLSA on IPCA:

Maintained ‘Sell’; raised price target to Rs600 from Rs560

Strong revenue, but weak margins in June quarter.

Sales and margin guidance for the current financial year is achievable.

Delay in resolution of US sites not factored in current valuations.

Macquarie on NCC:

Maintained ‘Buy’ with a price target of Rs177.

Handsome beat all round.

Current order book gives strong revenue visibility.

Await revenue and margin guidance details.

Deutsche Bank on Aditya Birta Capital:

Maintained ‘Buy’; cut price target to Rs190 from Rs195.

Growth mixed even as margins improve.

Life Insurance continues to see strong improvement.

NBFC, AMC growth slows but margins rally.

One of the strong plays on India's financialization and formalization themes.

BofAML on Indian Oil Corp:

Maintained ‘Buy’ with a price target of Rs210.

June quarter was supported by massive inventory gains.

Strong headline marketing Ebitda.

Significant increase in core run rate needed.

ONGC stake sale overhang receding; sale by Government of India could still happen in the current financial year.

IDBI Capital on PVR:

Maintained ‘Buy’ with a price target of Rs1,406.

PVR to acquire of SPI Cinemas to strengthens presence in Southern market.

PVR has paid premium valuation, but EV/screen similar to DT Cinemas acquisition.

SPI’s operating metrics and operating margin TDA margin better than that of PVR.

Recent deals with Bookmyshow and PayTM to support internal accruals.

PVR’s FY18 EPS to increase by 2.3% post deal.

Macquarie on SBI:

Maintained ‘Neutral’ with a price target of Rs281.

June quarter review: Loss again, but hope refuses to die.

Key negative was large slippages outside the watchlist and weak loan growth.

Sanctity of stressed asset guidance a big question mark.

Key positive was improvement in the provision coverage ratio.

Deutsche Bank on SBI:

Maintained ‘Buy’; raised price target to Rs365 from Rs330.

High MTM and credit provisioning impact earnings.

Slippages still elevated, but strong recoveries aid NPL reduction.

Expect earnings recovery from the current quarter.

BofAML on Coal India:

Maintained ‘Buy’ with a price target of Rs335.

Ebitda and net profit in-line with estimates.

Profitability rises despite sales mix deterioration.

Strong volume outlook on power growth and restocking.

Coal India’ coal is cheaper and preferred source vs imports.

Goldman Sachs on Coal India:

Maintained ‘Neutral’; cut price target to Rs290 from Rs293.

Net profit miss largely driven by lower revenues and higher employee costs.

FSA volumes higher due to higher coal supply to power plants, leading to lower e-auction sales.

Maintain Neutral as risk-reward for the stock to be balanced.

Deutsche Bank on Hindalco:

Maintained ‘Buy’ with a price target of Rs280.

June quarter’s operating performance in line.

Higher realization reduced by higher transfer prices for alumina.

Improving product mix to drive earnings.

JPMorgan on Hindalco:

Maintained ‘Overweight’ with a price target of Rs355.

Combined with Utkal, a strong quarter.

Copper volume down but strong by-product aid; volume ramp up to improve further.

Remains well placed across the chain with attractive valuations.

JPMorgan On Gail (India):

Maintained ‘Neutral’; raised price target to Rs360 from Rs330.

Strong crude drove record marketing Ebitda.

Petchem recovery a positive; key disappointment was in LPG segment.

Potential near-term catalyst is tariff hikes.

CLSA on GAIL (India):

Maintained ‘Buy’; raised price target to Rs435 from Rs405.

June quarter beat on all fronts.

U.S. LNG drives sharply higher gas trading profits and lower opex.

All segments outperform other than gas transmission.

Gas in GST, tariff hike, curb on petcoke use and more city gas wins are triggers in the second half of the current financial year.

Axis Capital on Sun TV:

Maintained ‘Buy’ with a price target of Rs1,200; implying a potential upside of 45 percent from the last regular trade.

Earnings beat on IPL.

Ad revenue growth remains strong; dependence on TN cluster has declined.

Subscription revenue growth trend – full benefits from Arasu yet to come in.

Sun TV intends to increase the payout going ahead.

IDFC Securities on Sun TV:

Maintained ‘Outperform’; cut price target to Rs979 from Rs1,124.

June quarter beat on all fronts.

Strong IPL performance; promoters capping their salary at 2017-18 levels.

Cut estimates to factor in entry in new markets and launch of flanking channels.

Deutsche Bank on Voltas:

Maintained ‘Hold’; raised price target to Rs500 from Rs490.

Strong outcome in a tough environment.

Projects business strong.

Worst not over for cooling business; expect margin decline.

Cooling business valuations look high, but at discount to peers.

CLSA on Voltas:

Maintained ‘Sell’; raised price target to Rs480 from Rs460.

Weak June quarter: AC disappoint; hope shifts to festive season.

AC market shift on faster move towards inverter ACs.

With AC business trading at high valuation, stock not ready for any negative surprises.

Deutsche Bank on Indraprastha Gas:

Maintained ‘Buy’ with a price target of Rs320.

Strong June quarter results driven by robust volume growth.

Fuel oil ban in NCR to revive PNG growth.

Margins to improve on price hike taken in May.

CLSA on Indraprastha Gas:

Maintain Buy.

Miss on margins offset by much stronger volume growth.

Strong growth across segments; Industrial/commercial segment surprises.

Margins to improve further after recent out-of-turn hike in end-May’18.

CLSA on Aurobindo Pharma:

Maintained ‘Underperform’; raised price target to Rs640 from Rs630.

June quarter’s net profit missed estimate due to weak margins.

Margins impacted by provisioning for product recalls and higher input costs.

U.S. still has high base challenge.

CLSA on Dr Lal PathLabs:

Maintained ‘Buy’ with a price target of Rs1,320.

In-line sales; 50 basis points beat on Ebitda margin.

Third-consecutive quarter of above 25% volume growth.

Competitive intensity remains stable.

Volumes likely to continue moving from unorganised to organised.

Daily Intraday Cash Tips