BROKERAGE RADAR

IDBI Capital on Mold-Tek Packaging
Initiate Buy with TP of Rs 322; Potential Upside 18%
In-Mold labelling and in-house backward operation integration key catalysts for future growth
Timely capacity addition to cater to growing demand
Strong foothold in paints and lube segment, entry in Food and FMCG to be revenue accretive
Expect Sales/EBITDA/Net Profit to grow at a CAGR of 21%/27%/31% over FY18-20

Kotak on City Union Bank
Downgrade to Reduce From Add; Raise TP to Rs 200 from Rs 190; Potential Upside 2%
Rise in stock price could be a due to receding concerns
Rising interest rates and inability to pass on the costs to lead to weaker NII growth
RoE contraction and valuation expansion do not bode well

UBS on Mahindra and Mahindra
Maintain Buy; Raise TP to Rs 1200 from Rs 1000; Potential Upside 27%
New SUV launch could drive re-rating
Expect tractor growth to remain robust
S201 a key potential trigger; Ford alliance a long-term positive

Deutsche Bank on Mahindra and Mahindra
Maintain Buy; Raise TP to Rs 1,050 from Rs 1,005; Potential Upside 11%
Marazzo pricing is right in middle of two largest selling models in the segment
Expect Marazzo to achieve monthly run-rate of 2500-3000/month in H2FY19
Mahindra planning a capacity of 8000-9000/month between Marazzo and S201

Citi on Mahindra and Mahindra
Maintain Buy with TP of Rs 1,060; Potential Upside 12%
UV growth continues to be modest; Market share soften
Tractors report a steady month
New SUV models critical; All eyes on Marazzo

Credit Suisse on Mindtree
Maintain Neutral with TP of Rs 925; Potential Downside 16%
Mgmt. re-iterated target of better-than-industry growth and continued margin expansion
Continued focus on larger deals; Near-term business momentum remains solid
Fundamentals look attractive for the medium term, but valuations leave no upside

Macquarie on Mindtree
Maintain Underperform with TP of Rs 820; Potential Downside 25%
High emphasis on platform-led delivery; Investments in digital to continue
EPS growth to be faster than revenue due to margin benefits
To improve payout ratio by a mix of dividends and buy-backs

Credit Suisse on CG Consumer
Maintain Outperform; Cut TP to Rs 320 from Rs 330; Potential Upside 28%
Near-term pain point is price-led competition in LED market
Go-to market changes are progressing; Overall process to take 18 months
Cut FY19-21 EPS estimates to factor in margin pressure in lighting business

Citi on Tata Motors
Maintain Buy with TP of Rs 410; Potential Upside 54%
Another strong month for commercial vehicle
UV sales reflects a better showing
Expect October growth to taper off to 5%

HSBC on Quess Corp
Maintain Buy with TP of Rs 1,400; Potential Upside 43%
Co. confident of growing at 20% organically and meeting 8% margin target in medium term
Co. to continue to make acquisitions in all segments except its People & Services business
Co. assumes flat pricing, driven by mix, which is too conservative

Kotak on BHEL
Maintain Reduce; Raise TP to Rs 89 from Rs 78; Potential Upside 9%
Expect EPS to grow meaningfully over FY18-21
Weak cash flow performance limits ability to ascribe value to incremental profits
Industry scenario to remain unrelenting

BofAML on Telecom
Vodafone-Idea may take 1-2 months for network integration to start
Believe communication from new Mgmt. on company strategy is key
Consider next 6-9 months as an opportunity for Airtel and Jio to grab market share
Expect Infratel to quantify tenancy cancellation number in upcoming quarter

Citi on Cement Sector
If construction ban stays for a prolonged period, then it would hurt cement volumes and pricing
Ultratech’s 20-25% volumes are from regions that are banned
ACC/Ambuja have 20/40% of their capacity in these regions
Shree Cement and Dalmia Bharat have negligible volumes from banned regions

Morgan Stanley on Cement
Earnings are at an inflection point
Saw price hikes in June ended quarter, which should sustain in H2FY19
Costs should see a modest near-term rise
Top Pick: ACC

Deutsche Bank Research on Indian Banks
Banks getting aggressive on rate hikes
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