BROKERAGE RADAR

Nomura on Cochin Shipyard
Initiate Buy with TP of Rs 534; Potential Upside 28%
See strong medium-term visibility from defence orders and ship repair ramp-up
Expect Revenue/EBITDA CAGR of 15%/18% over FY18-21
See an addressable defence opportunity worth Rs 1.15 lakh crore over next five years
Expect Cochin to bag Rs 24,400 crore of orders extending revenue visibility well until FY30

HDFC Securities on HG Infra
Initiate Buy with TP of Rs 386; Potential Upside 61.5%
Further pickup in NHAI orders in H2 to address longevity concerns on earnings up-cycle
Positives: healthy balance sheet, stable working capital cycle and entry into HAM
Sub-contracting projects to boost margins
Expect Order Book/Revenue/Net Profit to grow at a CAGR of 32%/35%/38% over FY18-20

Edelweiss on ITC
Upgrade to Buy from Hold; Raise TP to Rs 405 from Rs 328; Potential Upside 31%
Expect cyclical improvement in volume trajectory
Cigg. EBIT growth riding structural levers - limited cess hike & ban of e-cigarettes
Believe ITC’s other businesses too are ripe for re-rating

Credit Suisse on FMCG
Britannia: Downgrade to Neutral from Outperform; Raise TP to Rs 6,900 from Rs 6,000; Potential Upside 9%
HUL: Downgrade to Neutral from Outperform; Cut TP to Rs 1,770 from Rs 1,850; Potential Upside 7%
Last stock move has taken valuations to unprecedented territory
Downgrade Britannia and HUL as there is no scope for earnings upgrades and see margin risks in FY20
Prefer Dabur, Nestle and Colgate

Deutsche Bank on Grasim Industries
Maintain Buy with TP of Rs 1430; Potential Upside 40%
Robust earnings growth outlook not yet discounted
Expect margins to remain strong based on global demand-supply dynamics
Volume growth should also improve substantially as VSF capacity is expanding

Jefferies on GAIL (India)
Maintain Buy with TP of Rs 450; Potential Upside 25%
See robust earnings outlook with strong momentum in LPG/Petchem
Winter may bring materially higher trading EBIT
Most of the segments should fare better in coming quarters skewing EPS risks to the upside

Citi on ICICI Bank
Maintain Buy with TP of Rs 390; Potential Upside 19%
Focusing on delivering growth in risk-adjusted operating profit
Bank minimising exposure to riskier loans while aiming for 15% consol. RoE by June 2020
Believe that NPA recognition is in last leg and focus will shift to recoveries

Macquarie on Graphite India
Maintain Outperform with TP of Rs 1,410; Potential Upside 41%
Needle coke market to remain tight and restrict GE supply
Mgmt. confident it can pass on cost pressures
Increasing comfort on longevity of current up-cycle and prudent capital allocation to re-rate stock

CLSA on Media
Expect digital ad revenue to jump 4xled by explosive growth of digital video
Print ad share will be hit hard but TV ad revenue will continue to grow
Zee Entertainment is set up for success in both TV and digital