Why foreign brokerages are bullish on SBI, TechM and HDFC Bank
1/7
Fundamental Calls
Cement companies remain a comfortable bet, but their strong June quarter show cannot be extrapolated, said CLSA which also like telecom stock Bharti Airtel as an investment bet. Here is a look at individual; stocks and sectors, which have seen fresh commentary by foreign brokerages:
(Text inputs by Foreign Brokerages)
(Text inputs by Foreign Brokerages)
2/7
CLSA on Telecom
>Divergent trends in reported and active subs, data subs and low MNP
>Remains positive on Jio and Bharti Airtel
>Reliance Jio has gained 44m active subscribers, Bharti Airtel and Vodafone Idea have lost 20m/68m subscribers
>Subscribers have given up existing numbers and are using Jio for voice
>3G/4G penetration is now at 50% for the sector
>Jio leads with 52% share among 3G/4G users, Bharti’s share has been stable at 23%
>Remains positive on Jio and Bharti Airtel
>Reliance Jio has gained 44m active subscribers, Bharti Airtel and Vodafone Idea have lost 20m/68m subscribers
>Subscribers have given up existing numbers and are using Jio for voice
>3G/4G penetration is now at 50% for the sector
>Jio leads with 52% share among 3G/4G users, Bharti’s share has been stable at 23%
3/7
CLSA on Cement
>1QFY20 unit Ebitda at a multi-quarter high despite volume pressure.
>Industry is going through heightened volatility, which was partially reflected in 1QFY20
>Volume declined, while sector profitability was close to an all-time high
>Recent correction in energy prices is yet to reflect in sector margins
>Believes Q1 profitability cannot be extrapolated, but YoY comps remain comfortable ahead
>Bullish on Ambuja, Ramco and UltraTech
>Industry is going through heightened volatility, which was partially reflected in 1QFY20
>Volume declined, while sector profitability was close to an all-time high
>Recent correction in energy prices is yet to reflect in sector margins
>Believes Q1 profitability cannot be extrapolated, but YoY comps remain comfortable ahead
>Bullish on Ambuja, Ramco and UltraTech
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4/7
Macquarie on HDFC Bank
>Maintains Outperform , Target at Rs 2820/share
>HDFC Bank is top picks in the sector
>Company has 5-pronged strategy to stay ahead of peers
>No equity capital raising in the foreseeable future
>HDFC Bank is top picks in the sector
>Company has 5-pronged strategy to stay ahead of peers
>No equity capital raising in the foreseeable future
5/7
Macquarie on MGL
>Upgrade from Neutral to Outperform
>Target for MGL at Rs 950/share vs Rs 815/share
>Expects robust FCF generation over next 3 years
>Robust FCF + net cash = higher dividends ahead?
>Target for MGL at Rs 950/share vs Rs 815/share
>Expects robust FCF generation over next 3 years
>Robust FCF + net cash = higher dividends ahead?
6/7
HSBC on SBI
>Maintains BUY, Target at Rs 400/share.
>SBI has seen a hesitant re-rating
>Gradually improvement seen in financial performance
>See Enhanced RoE & quality of earnings ahead
>SBI has seen a hesitant re-rating
>Gradually improvement seen in financial performance
>See Enhanced RoE & quality of earnings ahead
7/7
Goldman on Tech Mahindra
>Maintains BUY, Target at Rs 907/share
>Tech M Valuation at 10.9X vs. last 10-yr avg of 13.5x
>Expects EPS growth of 12% from FY19-22E
>Management confident of single-digit growth in Telecom vertical
>Tech M Valuation at 10.9X vs. last 10-yr avg of 13.5x
>Expects EPS growth of 12% from FY19-22E
>Management confident of single-digit growth in Telecom vertical