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Analyst Calls: Glenmark Pharma, Hindalco, AIA Engineering, Century Plyboards

Good morning!

The domestic stock market on Friday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 42.50 points higher this morning, signalling a good start for Dalal Street.

As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks.

Emkay Global has upgraded Century Plyboards to buy from hold but cut target price to Rs 167 from Rs 193. Century Plyboards’ June quarter result was ahead of estimates, said Emkay. The brokerage expects profits to grow at a CAGR of 14 per cent over FY19-21. Concerns of lower margins in its Plywood segment are factored in as the stock has corrected by 23 per cent after fourth quarter result, said Emkay. The stock ended down 1.7 per cent at Rs 132 on Wednesday.

Nomura has retained buy rating on AIA Engineering and increased target price to Rs 1,970 from Rs 1,965. While guidance has been cut owing to an incident at a major Brazilian miner, the brokerage continues to be positive on the stock as AIA is favourably placed for long-term volume growth relative to peers, despite near-term Brazil headwinds, said Nomura. Successful trial of mill liner product in Africa adds to volume visibility, said Nomura. The stock ended up 3.1 per cent at Rs 1,700.60 on Wednesday.

Phillip Capital has maintained sell rating on ITD Cementation India and cut target price to Rs 60 from Rs 90. The brokerage said it has always viewed ITD as an inconsistent performer, with very few instances of two successive quarters in its history, where it hadn’t disappointed either on revenue or margins front. The descoping of Bangalore metro and low share of marine orders means ITD Cementation will not report more than 10 per cent margins — a significant departure from its earlier guidance, the brokerage said. The stock ended up 0.85 per cent at Rs 71.6 on Wednesday.

CLSA has maintained sell rating on Glenmark Pharmaceuticals and cut target price to Rs 350 from Rs 500. The consensus is underestimating the margin pressure from the muted revenue growth and high R&D spend, said CLSA. The brokerage expects weak revenue growth along with a high R&D spend phase to keep margin subdued. CLSA has cut FY20-FY21 EPS estimate by 15-18 per cent. The stock ended down 7.9 per cent at Rs 383.90 on Wednesday.

HSBC has maintained buy rating on Hindalco Industries with a target price of Rs 270. The rising contribution from Novelis, potential merger with Aleris and expectation of recovery in aluminium prices makes Hindalco a compelling investment case, said HSBC. The company is currently trading at a multi-year low forward EV/EBITDA of 5 times providing further downside protection, said HSBC. The stock ended up 2.5 per cent at Rs 80.70 on Wednesday.

Source: Economic Times