Analyst Calls: HCL Tech, Bajaj Finance, Tata Steel, Cipla

stock market 4-getty

The domestic stock market on Friday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 7.50 points higher this morning, signalling a tepid start for Dalal Street.

As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks.

Investec Securities has retained buy on HCL Technologies and trimmed target price to Rs 1,205 from Rs 1,240. The company reported a solid beat on revenue in the June quarter, said Investec. It now appears that revenue growth could well be ahead of the guided range of 14-16 per cent in constant currency. Margins are likely to be at the lower end of guidance of 18.5-19.5 per cent, it said. Consequently the stock is likely to see consensus downgrades, said Investec. Shares of HCL Technologies ended up 6.4 per cent at Rs 1,088 on Thursday.

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Kotak Institutional Equities has maintained add rating on JK Lakshmi Cement and revised fair value to Rs 355 from Rs 432. The company’s Ebitda in the June quarter was above estimates on strong realisations, said Kotak. Commissioning of the thermal power plant and the grinding unit should aid in cost control in FY2020-21, said Kotak. The brokerage has increased net debt estimate for FY2021.Shares of JK Lakshmi ended down 0.7 per cent at Rs 330.15 on Thursday.

Prabhudas Lilladher has initiated coverage on Bajaj FinanceNSE 2.55 % with a target price of Rs 3,860. The brokerage has initiated coverage given the company’s formidable franchise in consumer financing, strong growth momentum in rural finance and expected uptick in mortgage business post spin off in step down subsidiary. The brokerage expects premium valuations to sustain given ROA and ROE of 3.7 per cent/20.1 per cent, lower ALM risk and strong retail presence in consumer segment. Shares of Bajaj Finance ended up 2.1 per cent at Rs 3,335.95 on Thursday.

CLSA has retained sell rating on Tata SteelNSE -1.37 % and cut target price to Rs 320 from Rs 395. The brokerage has cut FY20 earnings by 22 per cent and said its FY20-21 EPS estimates are 31-40 per cent below Street estimates. Tata has cut down its capex for FY20 by 25 per cent, which is prudent given margin pressure, said CLSA. Even after the sharp fall, the stock trades at a 50 per cent premium to global peers on a one-year forward consensus EV/Ebitda despite much higher leverage, said CLSA. Shares of Tata Steel ended down 3.8 per cent at Rs 367.40 on Thursday.

HSBC has maintained buy rating on CiplaNSE -3.69 % but cut target price to Rs 580 from Rs 600. The brokerage remains positive on Cipla’s stable outlook in the US and other focus markets as short-term disruptions should eventually normalise. Post first quarter result, HSBC has made adjustments in sales across markets and costs in-line with the current outlook which lead to a 3-5 per cent cut in FY20-22 EPS estimates. Shares of Cipla ended down 3 per cent at Rs 503.30 on Thursday.