BROKERAGE RADAR

Deutsche Bank on REC
Maintain Buy with TP of Rs 155
Book value impact negative but coverage ratios improve
Loan growth steady at 16%; Share of renewables picking up
Expect sharply lower credit costs in FY19 as coverage ratios now comfortable

Citi on Jindal Steel & Power
Maintain Buy; Cut TP to Rs 400 from Rs 401; Potential Upside 71%
FY18 annual report shows growth in cash flow; Debt pay-down started
Favorable steel market dynamics to help capacity ramp-up
Valuations are still very attractive

CLSA on PVR
Maintain Buy; Raise TP to Rs 1690 from Rs 1450; Potential Upside 22.5%
Deal with ticketing aggregators reassures multiplexes’ bargaining power
Acquisition of SPI Cinemas fortifies southern India presence
Raise valuation multiple as uncertainty around F&B prices is now waning

Macquarie on KEC International
Maintain Outperform with TP of Rs 443; Potential Upside 51%
Beneficiary of 100% railway electrification by FY22
KEC’s market share in railway electrification stands at above 40%
Estimate 7% upside risk to order inflow estimate over FY19-21

CLSA on Indian Pharma
Improving fundamentals and FX drive outperformance
Still see certain levers for the rally to sustain
Positives: low correlation to electoral outcomes, underweight position in FII portfolios and potential earnings upgrade in near term
Like Sun Pharma for its specialty focus in US and good execution in key specialty products
Cipla is well placed to grow its US business and has strong domestic portfolio
Downgrade Cadila Healthcare to Outperform from Buy on valuations

Citi on India Paints
Remain positive on revenue growth prospects of Indian paints industry
Negatives: weak INR & price hardening of raw materials
Think paint Co. would take price hikes in Oct./Nov.
Could see downside risks to earnings if cost push sustains or price hikes are delayed