Buy, Sell, Hold: 2 stocks are in focus on April 20, 2018

IndusInd Bank and TCS are on analysts’ radar today.

IndusInd Bank

Citigroup: Target Rs2180

Citi maintains a buy call on IndusInd Bank post Q4 results but raised its 12-month target price to Rs2180 from Rs2060 earlier.

Higher CASA ratio and the recent MCLR increase should help net interest margins or NIMs. The loan growth remains strong. However, slippages rose due to divergence. Fee income growth was muted due to a high base of retail third-party fees.

Nomura: Target Rs 1950

Nomura maintains a buy rating on IndusInd Bank post Q4 results with a target price of Rs1950. The March quarter’s net profit missed marginally due to lower growth in income fees. However, we saw a steady performance on all metrics.

The asset quality remains stable as there were no major issues from divergence. Going forward, completion of the merger would be the next stock catalyst.

Axis Capital

Axis Capital maintains a buy call on IndusInd Bank post Q4 results with a target price of Rs2060. The March quarter’s results were largely in line with estimates led by superior growth in advances and stable margins.

The financial year 2016-17 net divergence was minuscule. But, the loan growth remains strong at 28 percent; growth in vehicle segment too picked up. The domestic brokerage firm is still watchful on the developments on the acquisitions front.

Brokerage: Jefferies | Rating: Hold | Target: Raised to Rs 1,690

The global research firm observed that high divergence led to 6.4% slippage ratio. Further, it said that it seems the entire corporate slippage came from divergences in FY17.

Brokerage: UBS | Rating: Neutral | Target: Rs 1,950

UBS observed that Q4 results were largely in-line with expectations as net profit grew by 27% YoY. Further, it expects limited upside from current valuations as NPL risk still exists.

Brokerage: PhillipCap | Rating: Buy | Target: Raised to Rs 2,050.

The brokerage expects the bank to continue reporting strong performance led by robust advances, margin. Growth in consumer financing loans will gain momentum. Adjusted RoA may remain strong, driven by earnings CAGR Of 23% in FY18-20.

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 2,100

Deutsche Bank said that minor blips are not concerning, while the growth story is intact. It expects fee growth to accelerate again to 20 percent as the base effect wears off.

TCS

Brokerage: CLSA | Rating: Reiterate Buy | Target: Raised to Rs 3,700 from Rs 3,250

The global brokerage house said that Q4 revenues beat estimates sharply. It has upgraded the FY20 revenue and EPS estimates by 1 percent. It also expects the firm to maintain payout ratios. The target multiple has been raised to 21 times one year forward PE.

Brokerage: Nomura | Rating: Maintain reduce

Nomura said that the firm had strong beat on revenues due to ramp-up in large deals in the UK. The company has seen a marginal increase in effective tax rate to 24-25 percent in FY19 against 24.1 percent in FY18.

Brokerage: Kotak Securities | Rating: Maintain reduce | Target: Raised to Rs 3,100

Kotak Securities said that the firm had reported strong 2% CC growth powered by large deals. It also expects a better FY19 & forecasts CC revenue growth of 9.2%. The firm also said that it is justifying current valuation, which requires baking in of USD 2.1 billion of incremental revenue in FY19. It also raised EPS estimates by 4-6 percent largely due to change in the rupee-dollar forecast.

Brokerage: Jefferies | Rating: Maintain Hold | Target: Raised to Rs 3,200

Jefferies observed that Q4 revenue was ahead of expectations in $ terms. It is building in 8.5-10% CC growth Over FY19-21 Vs 6.7% reported In FY18. Most of the improved outlook is already priced into the stock price, it said, adding that most of the improved outlook is already priced into the stock. It is also building in flattish margin over FY18-21.

Two days Free Trials and best services packages for dealing in Stock market click here to get >> Stock Market Tips One Missed call on @9644405056