BROKERAGE RADAR

IDFC Securities on Bank of Baroda
Downgrade to Neutral from Outperform; Cut TP to Rs 130 from Rs 180; Potential Downside 4%
Believe BoB is in for a de-rating with merger announcement
Integration issues and higher NPLs post-merger are key concerns
Proforma numbers of merged entity indicate no material change in financial parameters
Based on CMP, post-merger shares will be 19% higher than BoB’s current shares

JPMorgan on PSU Bank Merger
Merger of Bank of Baroda, Dena and Vijaya Bank an incremental positive for the sector
Immediate share price action should be negative for BoB, given further integration risks
Additional provisioning requirements is likely negative for BoB’s incremental earnings outlook

CLSA on PSU Bank Merger
Bank of Baroda to acquire to smaller PSUs; Not a material dilution of the franchise
Deal valuation may be at a tad discount to BoB
Risk from clean-up post-merger announcement; Synergy could take 1-2 years
PSU consolidation is a long-term positive but a near-term overhang

UBS on PSU Bank Merger
Big overhang is behind; See no major impact over medium term
Believe this merger would be different from a SBI merger
Tier-1 of merged entity similar to BOB, while Provision Coverage Ratio bit lower
Believe merger would offer operating cost and cross sell synergies over medium term

Citi on PSU Bank Merger
Merger neutral for Bank of Baroda
Strong financials of Vijaya Bank could offset weak financials of Dena
Cultural issues significant, technology not as much

Kotak on Bajaj Auto
Maintain Sell; Raise TP to Rs 2,700 from Rs 2,500; Potential Downside 5.5%
Rupee depreciation to aid margins but medium-term concerns stay
INR depreciation to improve EBITDA margin as well as competitiveness in export markets
Retain Sell due to deterioration in profitability and absence of scooters in portfolio

HSBC on Titan
Maintain Buy; Cut TP to Rs 1,050 from Rs 1,100; Potential Upside 27%
Correction due to wavering revenue growth guidance and fear of regulations amid growing CAD
Positives: good studded jewellery promotion, low base in Q3 and own scheme to spur growth
Valuation remains compelling post current sell-off

PhillipCapital on Jubilant Foodworks
Maintain Buy with TP of Rs 1780; Potential Upside 31.5%
Believe Jubilant is poised to deliver strong Q2FY19
Channel checks suggest 18%+ SSSG in July-August 2018
Expect 44%/59% rise in EBITDA/Net Profit in Q2

CLSA on Hindustan Unilever
Maintain Outperform with TP of Rs 1,950; Potential Upside 22%
Management commentary pre-quarter close remains positive
Increase in crude and INR depreciation to be offset by lower palm oil prices and price hikes
Outlook for demand remains fairly positive; May get further fillip from pre-election spending

Macquarie on Hindustan Unilever
Maintain Outperform with TP of Rs 1,870; Potential Upside 17%
Price increases to offset margin pressure due to INR depreciation
No incremental competitive intensity in Laundry care
GST-related rationalization and cost savings continue to boost margin

BoFAML on Hindustan Unilever
Maintain Buy with TP of Rs 1,900; Potential Upside 18.5%
Healthy volumes and better profitability to mark stable Q2
Steady compounder with strong execution capability
Expect healthy 18% EPS CAGR to back premium valuations
Recent correction offers attractive buying opportunity

UBS on Indian Pharma
Pharma stock valuations towards the high end of 10 year average
Rupee weakening likely to translate to earnings upgrades
Emerging Market exposure is a negative
Cipla remains top pick; Also like Sun Pharma

Macquarie on YES Bank
Maintain Outperform with TP of Rs 425; Potential Upside 33%
Mgt. expects divergence to be benign
Not alarmed about pace of growth; Lending done to quality customers
25% growth sustainable without equity capital raising