BROKERAGE RADAR

IDFC Securities on GST Changes
Expect boost to consumption demand propelled by a fall in prices
Companies will pass on lower GST rate and thereby not see benefit in form of margins
Sectors which saw tax rate cut have big share of unorganised players
Move should help them come under tax net
Expect paint companies, P&G hygiene, footwear manufacturers, Whirlpool, Dixon, Havells, Voltas and select hotels to be key beneficiaries

Kotak Securities on GST Changes
GST rate cuts should be meaningful earnings kicker for paints companies
Indirect benefits market share gains and premiumisation to boost earnings
ITC: No revision would normally be seen as a positive
United Spirits: Could bounce back on non-inclusion of ENA

 Kotak Securities on Asian Paints
Maintain Reduce; Raise TP to Rs 1,275 from Rs 1,100
GST rate cut - definitive kicker to earnings growth for paints companies
Expect higher volume growth as pricing gap versus unorganized segment reduces
Expect likely acceleration in pace of premiumization
Raise volume, realization and margin assumptions

ICICIDirect on ABB India
Initiate Buy with TP of Rs 1,400
Capex in power T&D, smart grid solutions, railways gives strong visibility
Industry solutions, renewables, E-cars to bring new growth opportunities
Positives: strong competencies and technology leadership, proven expertise in execution, healthy b/s and large anticipated capex spends
Expect Revenue/EBITDA/Net Profit to grow at a CAGR of 14%/20.5%/21% over CY17- 19
ABB trades at premium multiples due to its strong technical capabilities

Angel Broking on Yes Bank
Initiate Buy with TP of Rs 435
CASA growth and rating improvement to support NIM
Expect asset quality to improve and minimal impact of stress resolution
Expect YES Bank’s advances to grow at a CAGR of 32% over FY18-20
YES trades attractive valuations considering growth prospects

Kotak Securities on CDSL
Initiate Buy with TP of Rs 320
Repeat business in multiple offerings provides stability to operating income
Strong operating activities and limited capex to keep FCF strong
Positives: stable growth in annual issuer charges, increased market traction, higher number of IPO and inflow in MFs
Expect Revenue/EBITDA/EPS to grow at a CAGR of 11%/11%/10% over FY18-20

IDFC Securities on UPL
Maintain Outperformer with TP of Rs 982
Positive on Arysta transaction on the back of potential meaningful upsides
Deal valued at 9.9x EV/EBITDA, excluding synergies
Expect significant cost/revenue synergies
Significant performa cash flows to take care of leverage ratio

CLSA on UPL
Maintain Buy with TP of Rs 940
Arysta acquisition offers scale benefits and discovery capabilities
Complementary portfolio; UPL to get scale benefits
Acquisition valued at 10x EV/EBITDA and is EPS accretive

UBS on Petronet LNG
Upgrade to Buy from Sell; Raised TP to Rs 245 from Rs 235
Strong LNG imports driving the short-term outlook
Lower utilisation due to higher regas capacity additions is priced in
Strong utilisation rates and a 5% increase in regas tariffs to drive FY19 earnings
Triggers: Mundra terminal delay and Kochi-Mangalore pipeline commissioning

IDFC Securities on HDFC Bank
Maintain Outperformer with TP of Rs 2,515
Margins and asset quality were soft in Q1
Pressure on NIMs driven by lower yields and higher cost of funds
Key Reasons For Miss: higher than expected agri-slippage and decline in NIMs
Expect these to improve through the year

Goldman Sachs on HDFC Bank
Maintain Buy; Raise TP to Rs 2,613 from Rs 2,487
In-line core operating profit growth
Positives: Efficiency gains, strong fee income and robust retail lending growth
Negatives: marginal blip in asset quality and slower growth in NII
Expect NIMs to improve significantly in H2FY19

Macquarie on Bajaj Auto
Maintain Neutral with TP of Rs 2,800
Reported lower-than-expected margins and net profit in Q1
Cut in prices hurting profitability
Struggling to balance growth and profitability
Exports growth to continue in the near-term

Deutsche Bank on Bajaj Auto
Maintain Hold with TP of Rs 3,000
Q1 operating results below es