Analyst Calls: Mindtree, Divi's Labs, HDFC Bank, M&M, Info Edge

Good morning!

The domestic stock market on Tuesday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 29 points higher this morning, signalling a good start for Dalal Street.

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


Emkay Global has retained sell rating on Mindtree with a target price of Rs 650. FY20 will be a significant year of transition for the company under the new leadership and could remain volatile, said Emkay. FY20/CY19 is a relatively difficult growth year for the sector with June 2019 results only adding to the lingering concerns, said Emkay. Recent INR depreciation and weakness in other sectors continue to provide support to tech stocks in the near term despite increasing macro concerns, said Emkay. Shares of Mindtree ended down 0.3 per cent at Rs 706.35 on Monday.

Phillip Capital has maintained buy rating on Divi's Labs with a target price of Rs 1,850. The brokerage estimates that Divi's will deliver 21 per cent earning CAGR over FY20 22. Moreover, the structural opportunities like – robust pharma outsourcing and upward shift in cost curve as well as supply disruption in China could pose an upside risk to estimates, said Phillip Capital. Shares of Divi's Laboratories ended up 3.1 per cent at Rs 1,620.55 on Monday.

Elara Capital has upgraded rating on HDFC Bank to accumulate from reduce with a target price of Rs 2,437. HDFC Bank has undergone an absolute price correction of 9 per cent in the past month post earnings announcement and now trades at 3.25 times one-year forward P/ABV vs its past 10-year average at 3.40 times, said Elara. The brokerage believes strong margin, coupled with higher-thanindustry credit growth, will aid return ratios. Shares of HDFC Bank ended up 4.3 per cent at Rs 2,255.95 on Monday.

Reliance Securities has maintained buy rating on Mahindra & Mahindra with a target price of Rs 650. The brokerage has retained buy rating considering expected improvement in rural demand and attractive valuation. The new XUV300 would drive M&M’s overall volume and profitability, said Reliance Secs. Its success may compensate for slowdown in other segments, it said. Shares of M&M ended up 2.1 per cent at Rs 544.30 on Monday.

IIFL has maintained add rating on Info Edge and raised target price to Rs 2,200. Management suggested that the momentum in IT hiring seen in FY19 is continuing this year as well, said IIFL. Info Edge's higher ad spends in FY20 versus FY19 would continue, as it invests aggressively to gain volume share in Jeevansathi and focus on brand building in Naukri, said IIFL. While Naukri has seen continuous pick-up in growth, sustained growth and better margins in 99Acres could help sustain valuations, said IIFL. Shares of Info Edge ended down 1.7 per cent at Rs 1,906.35 on Monday.