HDFC, Tech Mahindra, and KPIT Tech, among others, are being tracked by analysts on Tuesday.

HDFC

Brokerage: CLSA | Rating: Buy | Target: Rs 2,200

The global research firm said that an uptick in lending activity will lead growth & RoE. But, a rise in interest rates is a potential risk to spreads. The risk, it said, is due to rise in rates which can be mitigated by a hike in corporate lending rates.

Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 2,260

Motilal Oswal said that the company’s AUM growth continues to surprise; spreads stable QoQ. Further, it said that the company reported a steady quarter, with core PBT up 13 percent year on year. It observed that the firm has continued to surprise positively on the opex front. Retail loan growth impressive, despite intense competition & high base.

Tech Mahindra

Brokerage: CLSA | Rating: Sell | Target: Raised to Rs 500

CLSA said that Q3 results were ahead of expectation despite drag in Telecom, BFSI. It has upgraded margin estimates by 30-90 basis points, which is driving FY19/20 EPS upgrades. It also observed that the company’s margin expansion comes at cost of delayed wage hikes, persistent redundancies.

Brokerage: Motilal | Rating: Buy | Target: Rs 700

Motilal Oswal said that the firm put up a good show on profitability; visibility on further improvement remains strong. Further, it felt that opinion of a re-rating has only grown stronger after Q3.

Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 720

Credit Suisse said that FY19 P/E was reasonable at 15x with estimated 16% EBIT CAGR over FY18-20. Further, enterprise business was solidly poised and should be a beneficiary of a cyclical tailwind. It also said that Q3 is demonstrating that turnaround is well on track.

Inox Leisure

Brokerage: CLSA | Rating: Buy | Target: Rs 330

CLSA reported that the screen addition was slower and is still awaiting e-tax exemption clarity. Further, the content pipeline for the current quarter appears to be strong. But it has downgraded FY18/19 EPS estimates by 13/6 percent.

Emami

Brokerage: Citi | Rating: Buy | Target: Rs 1,270

Citi said that the company’s Q3 missed expectations on account of subdued topline performance. Meanwhile, wholesale is yet to fully normalize, coupled with pressures in CSD. Rural recovery & efforts on sales & distribution needed for volume rebound, it said.

Orient Cement

Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 179

Motilal Oswal said that the firm’s dismal performance was due to weak realization. Further, JP Associates’ asset acquisition would help co-raise capacity by 38%. It values the company at EV/tonne of USD 86 on FY20 estimates.

KPIT Tech

Brokerage: Axis Cap

The brokerage house values Birlasoft merger as neutral for the company. It added that deal values Birlasoft at par with KPIT despite strong growth.

Autos

Brokerage: CLSA

CLSA said that sequential trends strong in trucks but a tad weak in PVs/2-wheelers, adding that passenger vehicle (PV) volumes grew at a modest 5% yoy. It also expects PVs/2-wheelers to grow 10%/14% yoy in fy18 & trucks, 3%. For FY19, it is factoring in 10% industry growth. For M&HCVs, it sees 3 percent year on year growth in FY18, but sees upside risk if current volumes sustain.

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