BROKERAGE RADAR

Deutsche Bank on JSW Steel
Maintain Buy; Raise TP to Rs 440 from Rs 390; Potential Upside 10%
Strong domestic demand to sustain robust spreads; Depreciating INR positive
Low inventory in China and winter capacity cuts should support robust spreads
Rising share of VAP to drive higher margins over FY18 – 20

Credit Suisse on Shriram Transport
Maintain Neutral; Cut TP to Rs 1,250 from Rs 1,500; Potential Upside 6%
Holding Co. of Shriram group admitted into bankruptcy process by NCLT
See high likelihood of corporate guarantees getting invoked
Expect higher credit cost and cut growth expectations
Maintain Neutral with a cautious stance

Deutsche Bank and Power Finance Corp
Maintain Buy with TP of Rs 110; Potential Upside 34%
Q1: Book value impacted, but NPLs now recognised and well provided for
Coverage ratios improve under Ind AS; Loan growth steady
NIMs could continue to remain under some stress

Citi on Cement Industry
Checks suggest average cement realizations to be flattish to higher QoQ during Q2
Would Buy into weakness in share prices as cement prices expected to rise
Expect Q2 EBITDA/tonne to likely be lower QoQ

Macquarie on United Spirits
Maintain Underperform with TP of Rs 443; Potential Downside 23%
Launch of McDowell’s No.1 Platinum whisky in UP could mean market share gains
Underperform rating based on significantly lower margin estimates
Negatives: reversal in input cost deflation, higher A&P spend and lower price hike in run-up to general elections

Citi on HDFC Standard Life
Maintain Sell with TP of Rs 380; Potential Downside 13%
New CEO appointment should ensure continuity
Padalkar has been associated since Aug 2008 and her elevation to ensure smooth transition
Maintain Sell rating on valuations expensive

Brokerages on CPI
Goldman Sachs
CPI inflation softens in line with expectations on lower food inflation
Expect moderation in inflation to be temporary
Headline inflation to rise to upper end of RBI’s target band by late 2018
Risks are tilted towards earlier rate hikes after sharp fall in INR
Deutsche Bank
Overall CPI outturn is definitely better than expectations
Expect positive trend to continue till the end of this calendar year
No need for RBI to hike the policy rate immediately
Will review rates outlook, post announcement on rupee stabilisation measures next week
Nomura
Inflation cools on food and base effects
Cautious in the near term owing to weakness in INR
Believe lower inflation trajectory and relaxed stance on monetary policy to reduce correlation between rates markets and FX over time
Edelweiss
Expect adjusted core inflation to continue to soften gradually
Core inflation could turn sticky if recent spike in crude oil prices and the INR depreciation persist
Expect food inflation to remain benign as global food prices continue to be subdued