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Buy, Sell, Hold: 3 stocks and 1 event are on analysts’ radar today

PSU bank recap, Infosys and Asian Paints, among others, are being tracked by investors on Wednesday.

Brokerage: Nomura

The global broking firm said that the move was a game changer and expects re-rating in PSU banks. In fact, the package takes care of all requirements in one stroke, it added. The infusion is highly dilutive, but very positive for FY19 adjusted books. Though it is positively surprised by the quantum of recap, it said that the recap still managed to match its estimates of capital needs for both NPA provisioning and growth. Among stocks, it expects the highest positive impact on Punjab National Bank as it is more sensitive to capital availability than State Bank of India or Bank of Baroda.

Brokerage: Morgan Stanley

Morgan Stanley gave a double upgrade to SBI to overweight and highlighted that this was the first overweight since 2011. It also upgraded PNB, ICICI Bank and Axis Bank to overweight, while Bank of Baroda was upgraded to equal-weight.

Brokerage: Macquarie

Macquarie said that recapitalisation would likely further compress risk premiums. Along with this, it said, structural reforms in the banks need to be followed soon. A bold measure, it added, is that this is a first step towards solving a vexed issue. STOCK INTRADAY TIPS

Zee Ent

Brokerage: CLSA | Rating: Buy | Target: Rs 660

CLSA said that the company’s results showed a positive surprise in ad revenues despite GST disruption. It expects this revenue to accelerate in the second half of FY18. The management also maintains its mid-teens guidance for domestic subscription growth. It also forecast the company to deliver 21 percent earnings CAGR over FY17-20.

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 610

The research firm expects a rebound in both ad & subscription revenue in H2. The valuation at 18x FY19E EV/EBITDA is undemanding. The firm also trimmed FY18 & FY19 EBITDA estimates by 7 percent & 5 percent, respectively.

Brokerage: Macquarie | Rating: Outperform | Target: Rs 615

The global broking firm said that there is an upside risk to margin estimates of 31.5 percent in FY19 and FY20. It estimates a robust 20 percent EPS CAGR over FY17-20.


Brokerage: Morgan Stanley | Rating: Equal-weight | Target: Rs 980

Morgan Stanley said that the revenue headwind was offset by resilient margins and that P/E rerating was some time away. The brokerage also said that the revenue growth guidance cut is a negative, but valuations provided a support.

Brokerage: Macquarie | Rating: Outperform | Target: Rs 1,070

The global broking firm said that valuation gap between the company and TCS will narrow when a clarity on CEO emerges. Having said that, it raised EPS estimates by 2.2 percent for FY18 and sees FY18 EBIT margin in the midway of 23-25 percent guidance.

Brokerage: CLSA | Rating: Buy | Target: Rs 1,100

CLSA highlighted that the company has begun to bring costs back under control and that it is returning to basics with focus on execution and cost control. It tweaked earnings upwards from margin execution and said that the valuation is inexpensive at 13 times FY19.

Asian Paints

Brokerage: Macquarie | Rating: Neutral | Target: Rs 1,100

The brokerage house highlighted that volume growth was returning after GST-led disruption in the first quarter. It also said that margin recovered back, aired by lower other expenses. In the near term, raw material could keep the pressure on margins. It is advising investors with long term horizon to add stock on dips.

Brokerage: Morgan Stanley | Rating: Overweight | Target: Raised to Rs 1,400

Morgan Stanley said that a recovery was underway and that domestic business could benefit from acceleration in discretionary consumption growth. It cut FY18-20 EPS estimates by 2-5 percent and is projecting 19 percent earnings CAGR for FY17-20.


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Nifty could slip towards 9,900; 3 stocks which could give up to 11% return

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:

Arvind Ltd: SELL| Target Rs345| Stop Loss Rs410| Return 11%

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The market breadth was in favour of the advances with 957 stocks advancing while 668 declined and 383 remained unchanged. On the other hand, in the BSE, 1176 stocks advanced and 888 declined and 108 remained unchanged.

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.

The top Nifty gainers included Mahindra & Mahindra and Aurobindo Pharma which were up 1.7 percent each followed by UPL, Yes Bank and Zee Entertainment.

The top Nifty losers included IOC and BPCL which fell 2 percent each followed by HPCL, Tata Motors and NTPC.

The most active Nifty stocks included IDBI bank which jumped over 3 percent while JP Associates zoomed over 10 percent after Rakesh Jhunjhunwala…

HDFC Sec retains sell on Bharti Infratel, reduces target to Rs 310 despite 22% fall in last 2 months

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.

It further said the key reason for the de-rating is instant loss of tenancies on merger of Vodafone-Idea and impact of Reliance Communications and Aircel businesses’ scaling down.

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