While retaining buy rating with increased target price at Rs 780 (from Rs 750 earlier) on Aurobindo Pharma, Jefferies said the company has launched 3 products in Q1FY18, driving a 5 percent FY18 EPS upgrade.
The research firm has adjusted its EPS for the recent launches & raised FY18-19 EPS by 5-2 percent, saying the launches also underscore company’s R&D quality and improve confidence for other key launches including Renvela tabs.
Aurobindo’s deeper, better quality filings and cost leadership position it well to overcome the US pricing challenge, it said.
FY18 has seen the two key investor concerns on Aurobindo – R&D quality and lack of significant launches – getting addressed.
Deutsche Bank believes NTPC is at an inflection point of stepping up commissioning from 2 to 5-6 GW per annum.
It believes capitalisation doubling in FY18 & FY19 should improve return on equity by 200 bps and expects capitalisation cycle to be strong in FY18/19.
The brokerage house has cut consolidated & standalone EPS by 7/6 percent and 8/8 percent, respectively. It also reduced capacity addition by 4/3 percent and reduced renewable energy capacity by 50-60 percent.
Deutsche forecast 5.4/8.5 GW capacity in FY18/19, leading to 15 percent EPS CAGR over FY17-20.
Credit Suisse has maintained outperform rating on the stock, saying loan waiver is a non-issue for the company.
After recently visiting company’s operations in the Vidarbha region in Central India—one of the worst affected regions on collections post demonetisation, its takeaway is that the peak of collections pain is behind us, with numbers improving week-on-week.
News flow on loan waivers should have negligible/nil impact on the business, according to the research house. Fresh loans are disbursed only to fully current borrower groups.
“We continue to see value in the Bharat Financial. While there could be 1-2 quarters of further high provisioning, this is well known to the markets. Looking beyond, we believe that the stock should re-rate as fresh slippages stay in check and growth/profitability improve,” it said.
Morgan Stanley feels Vedanta’s favorable commodity exposure and robust volume growth bode well for earnings and cash flows.
It believes Hindalco should gain from a positive outlook for aluminum and deleveraging focus. Valuations are supportive as well. The research house remains overweight on both and prefers Vedanta.