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Buy, Sell, Hold: 4 stocks and 1 sector are on analysts’ radar today

Tata Motors and BHEL, among others, are being tracked by analysts today.

Tata Motors

Brokerage: CLSA | Rating: Sell | Target: Rs 405

The brokerage house said that global luxury auto demand is softening, while it sees JLR gaining share. Further, it added, that it liked JLR’s strong pipeline, but remained concerned on its margin and India business. CLSA also sees further consensus downgrades ahead.

Petronet LNG

Brokerage: Citi | Rating: Buy | Target: Rs 541

The global financial services firm said that a possible purchase of 25 percent stake in Mundra’s LNG terminal to be a positive use of cash. A stake in Mundra LNG terminal may provide the company with a new avenue of growth, it added.

Further, it remains relatively immune to India’s broader LNG demand outlook. With GAIL’s Kochi-Mangalore pipeline under construction, it may see better utilisations from FY20. The company’s solid volume visibility & undemanding valuation make it a preferred pick, it added.

Mahindra & Mahindra

Brokerage: Credit Suisse | Rating: Overweight | Target: Rs 1,530

The research firm believes that farm loan waivers could further support tractor demand. It added that the states which waived loans so far account for more than 30 percent of total tractor volumes. This contribution, it says, will increase to 65 percent of total volumes if other states waive farm loans as well. It cited the instance of 2008 when waivers had improved tractor business CAGR to 21 percent.


Brokerage: JPMorgan | Rating: Underweight | Target: Rs 120

JPMorgan said that staff costs were likely to increase 20 percent in FY18 after wage settlement exercise. Further, it added, that diversification efforts have not produced very significant results. The company will have to win a very large share to sustain 8-9 percent growth in FY19. It does not see replacement of thermal plants as being a big catalyst.


Brokerage: Jefferies

The research firm said that steel remains a tolling business and input costs were a key driver of steel prices. It feels that iron ore prices will remain under pressure on weak fundamentals. Chinese stimulus appears to be fading & re-stocking cycle has ended, the brokerage house said. Meanwhile, domestic steel prices should fall more, while prices are still at 6-8 percent premium to anti-dumping duty.

Among players in the sector, it sees earnings before interest, taxes, depreciation and amortisation (EBITDA) growth for major players to be modest. At SAIL, free-cash-flow could lag pushing net debt higher, while on JSW Steel, the firm feels that consolidated margin expectations are too optimistic. A sharper than expected fall in coking coal costs is a key risk.


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A close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

The Nifty index Futures continued to slide lower for the second month in a row making it 10 percent decline from the record highs. Further, it has broken down from a broadening wedge pattern along with a close below the 200-DMA, affirming weakness dominant in the markets at the moment.

A sustained trade below 10,050 can accelerate the fall to levels of 9,930-9,700. However, a close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

Moreover, the relative strength index or the RSI has turned down from the neutral levels of 50 on two occasions in recent pullbacks suggesting further weakness in the coming trading sessions.

Here is the list of stocks which can give up to 11 percent return:

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The Indian markets on Friday morning were trading flat with the Nifty shedding 51 points or 0.49 percent  while the Sensex was down 178 points.

The Nifty PSU banking index was up 0.6 percent led by stocks like Syndicate Bank which jumped 5 percent followed by Allahabad Bank which gained over 3 percent. IDBI Bank and OBC were the other gainers. PNB gained 2.38 percent.

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The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

Bharti Infratel shares declined 1.5 percent to close at Rs 368 on Tuesday after HDFC Securities has reiterated its Sell rating on the stock with revised target price at Rs 310 (from Rs 387 per share) despite sharp fall in last two months. INDIAN STOCK TIPS

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

"Target price is based on 20x Dec-19E EPS (Rs 356) for business as usual (versus 24x earlier) less impact of Rs 60 per share from Vodafone-Idea merger (versus Rs 39 per share earlier) and likely acquisition of Vodafone-Idea stake in Indus at enterprise value of Rs 50 lakh per tower (+Rs 15 per share)," the research house said.

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