Buy, Sell, Hold: 2 stocks and 3 sector are being tracked by investors today
ICICI Pru, Natco and OMCs, among others, are on the radar of analysts on Wednesday.
Brokerage: CLSA | Rating: Buy | Target: Rs 560
CLSA said that the stock is among its top picks in the sector and it sees RoEV of 17-19 percent in FY18-20. It also said that the company is well capitalised with a solvency ratio of 290%. In fact, a cut in dividend payout would improve EV growth. The research firm also sees a healthy growth in premiums at 24 percent CAGR for FY17-20. Going forward, an improvement in mix and better persistency ratio will drive growth.
Brokerage: Haitong | Rating: Buy | Target: Rs 1,150
The brokerage house said that near-term catalysts include Hepatitis C franchise in India or rest of the world along with launch of gCopaxone. It projects PAT CAGR of 28 percent over three years.
Banks
Brokerage: Nomura
Nomura said that banks are not a growth story, but it still sees value after underperformance. Among them, it sees value in corporate banks and has a buy rating on five stocks. The broking firm believes that the sector will be closer to the end of NPA recognition cycle in FY18 and provisioning could remain elevated going into the next fiscal. It prefers ICICI or Axis Bank to PSU banks.
OMCs
Brokerage: JPMorgan
The global research firm said that the excise duty cut decision by the government was welcome and should help reverse its recent underperformance. Further, it believes that a material expansion in marketing margins are unlikely and should remain stable. Additionally, a hike in global crude prices could bring some concerns again. In fact, it had anticipated the government to intervene had crude prices breached USD 60 per barrel. In the sector, IOC remains its top pick, while it is underweight on HPCL.
Market Strategy
Brokerage: CLSA
The research firm highlighted that a cut in auto fuel taxes to impact government revenues by 16 bps of GDP on a yearly basis. In fact, revenue reduction and uncertainties with respect to GST collections could raise fiscal concerns. Meanwhile, the FPI sentiment on the equity could be weak until corporate earnings recovery sets in. going forward, it expects market performance to be subdued until the year end and long term optimism on housing-led recovery is intact. It replaced State Bank of India with HDFC Bank in its model portfolio.
