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Buy, Sell, Hold: Analysts are watching these 9 stocks and 1 sector today

Zee Entertainment, ITC, BHEL and UPL, among others are being tracked by analysts today

Zee Entertainment

Brokerage: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 565

The global research firm expects a subdued quarter for the company, led by the impact of goods and services tax (GST). Having said that, it expects a quick recovery in the second quarter. Further, BofA-ML also expects FMCG companies to curtail their spending on advertising and promotion in the first quarter, thus impacting the company’s revenues, which it expects to grow at 8 percent year on year in Q1.

Additionally, it expects the company to surprise on margin despite low revenue growth by controlling its expenses. It sees an earnings before interest, taxes, depreciation and amortisation (EBITDA) of 32 percent in Q1.

ITC

Brokerage: CLSA | Rating: Buy | Target: Rs 375


CLSA expects strong earnings growth for ITC along with a modest rise in capital expenditure over FY17-20. It expects the company to generate free cash flow at 14 percent CAGR over Fy17-20. The buy call for the stock is underpinned on a neutral final rate for GST, the report stated.

Brokerage: JPMorgan | Rating: Overweight | Target: Rs 350

The research firm sees free cash flows to be flat on the back of rising capex across all business divisions.

BHEL Stock trading tips

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 185


The global financial services firm forecasts a 12/50 percent revenue/net profit CAGR over FY17-20. It also cited the management’s expectation of recovery in orders in FY18 on the back of faster clearances.

Gujarat Gas

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 925


The research firm sees the recent underperformance in the stock as a chance to add position. It expects gas sales volume to pick up sharply from Q1 by 20 percent year on year to 6.4 mmscmd, along with sharp improvement in margins. The firm’s estimates are factoring in 69 percent earnings per share (EPS) CAGR over FY17-19. Further, it sees 12 new authorized areas to add over 0.6 mmscmd beyond FY20.

UPL

Brokerage: Deutsche Bank


Deutsche Bank highlighted that Brazil suspended another 37 fungicides after 63 in December. The products suspended, the firm said, include those manufactured by the company’s key competitors. It expects the suspension to support volume growth for the company in Brazil for the current fiscal.

Bank of Baroda

Brokerage: Nomura | Rating: Buy | Target: Rs 200


Nomura said that early recognition of stress and high NPA coverage imply lower profit and loss hit in FY18. The pre-provisioning operating profit (PPOP) outlook is better than its peers, the brokerage said. Unlike peers, there are positive net interest margin (NIM) catalysts in the current fiscal.

Fortis Health

Brokerage: Nomura | Rating: Reduce | Target: Rs 177


The brokerage said that its growth disappointed, while hospitals and diagnostics business performance lags peers. Further, it expects brownfield capacity additions to drive growth over three years. It is factoring in 16.3 percent CAGR over FY17-20 against 11 percent over FY14-17. Nomura also lowered sales estimates and EBITDA estimates as well. It could be an attractive acquisition target, given its pan-India presence, the report added.

UltraTech Cement

Brokerage: Citi | Rating: Buy | Target: Rs 5,000


Citi is incorporating the acquisition of JP Associates’ plants in its earnings. It lowered FY18-19 PAT by 35/12 percent on lower JP Associates’ utilization and EBITDA per tonne. It sees demand driven price rally yet to play out and said that the underperformance in the last month has provided a buying opportunity.

Axis Bank

Brokerage: JPMorgan | Rating: Overweight | Target: Rs 570


Continued underperformance presents an opportunity for long-term investors, the brokerage house said in its report. Incremental provisioning charge is minimal, it added. The bank is a preferred name within the high-NPL banks.

Property

Brokerage: CLSA


The brokerage house said that the progress of RERA was slow and many states are still awaiting a proper regulator. In Mumbai, it said, only 13 developers have received RERA registration yet. This slow progress may lead to sales in first half of FY18 being weaker than anticipated. The gains are likely to be visible later in the second half.
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