Brokers' call on Cyclicals, Siemens & Jaiprakash Power

Go for Cyclicals: BNP Paribas

Erwin Sanft, Asian strategist at BNP Paribas, recommends investors to go ‘overweight’ on cyclicals, ‘equalweight’ on financials and ‘underweight’ on consumer and defensives in Asia for January to June period. Cyclicals are trading at historical lows versus defensives in the region.

Siemens to underperform: BoA

Bank of America Merrill Lynch (BoA ML) has initiated coverage on Siemens India with an ‘underperform’ rating and set the price target at `606. Key arguments for underperformance include a decline in orders from traditional sectors as lack of large orders reduce revenue visibility, launch of new products lower margins in FY12-14, higher overheads and forex variation negates impact of lower input costs.

Lap up Jaiprakash Power: Citi

Citi has increased the target price for Jaiprakash Power Venture from `48 to `51 per share after meeting the management. JP Power remains Citi’s top pick in electric utility sector along with Power Grid. Citi has raised net profit estimates by 16% & 14% for FY12 & FY13, respectively. Earnings have been hiked to take into account that Karcham Wangtoo is now a merchant power.