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4 Sensex stocks where top brokerages maintained buy ratings post Q1 results

TCS gave hope, but Infosys shocked, which dragged the market lower. RIL managed to hold the market, but poor numbers from HUL led to a kneejerk reaction.

, ET Online|
Jul 20, 2016, 01.50 AM IST
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TCS gave hope, but Infosys shocked, which dragged the market lower. RIL managed to hold the market, but poor numbers from HUL led to a kneejerk reaction.
TCS gave hope, but Infosys shocked, which dragged the market lower. RIL managed to hold the market, but poor numbers from HUL led to a kneejerk reaction.
NEW DELHI: The June quarter earnings season started on a mixed note last week and this has started to reflect in the benchmark indices as well, which have been moving in a narrow range after a blockbuster rally last week.

TCS gave hope, but Infosys delivered a shock, which dragged the market lower. Big boy Reliance Industries managed to hold the market, but poor numbers from HUL on Monday led to a kneejerk reaction.

Global brokerage firms remained mixed in their ratings of companies that have come out with their quarterly numbers so far. However, top brokerages CLSA and Nomura have maintained buy ratings on the following Sensex stocks.

HUL: Buy | Target price Rs 1,037

Nomura maintained a buy rating on HUL post June quarter results with a 12-month target price of Rs 1,037. The volume growth at 4 per cent was below consensus and below Nomura's expectation of 5 per cent.

The environment remains challenging where market growth has slowed down. The softness in demand is most visible in Maharashtra, AP, and Karnataka. The company continues to see trends of premiumisation in the market, said the Nomura note.

RIL: Buy | Target price Rs 1,350

CLSA maintained a buy rating on RIL post-June quarter results with a 12-month target price of Rs 1,350. Net profit grew 16 per cent, which was ahead of consensus driven by a large beat in refining.

Jio is in the final stage of optimising its network and nearing launch, said the CLSA note. RIL is planning to start new projects worth $35 billion in the next six months which could be a key catalyst. "A $6 billion negative equity value for Jio suggests low expectations that could be beaten," said the note.

TCS: Buy | Target price Rs 3,000

CLSA maintained a buy rating on TCS post-June quarter results with a 12-month target price of Rs 3,000. Revenues were expectedly softer in Financial Services segment in the US, while it was surprisingly strong in the UK and Europe.

Declining attrition underscores sustainability. CLSA sees growth rebounding in previously troublesome areas. “Sustained client mining, Digital traction will improve growth momentum,” the CLSA note said.

Infosys: Outperform| Target price Rs 1,200

CLSA maintained an outperform rating on Infosys post Q1 results, but slashed its 12-month target price to Rs 1,200 from Rs 1,320 earlier.

There was a big revenue miss, and the guidance remains challenging despite a cut. The asking rate to meet guidance remains challenging at 2.9-3.8% CQGR, said the CLSA note.

The global brokerage firm slashed its dollar growth by 3 per cent in FY17 and FY17-19 EBIT margin by 50bps. The PE re-rating was largely in line with leaders TCS and Accenture will have to wait.

(Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)

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