Analyst Calls: Somany Ceramics, M&M, Whirlpool, Motherson Sumi, IHCL
Emkay Global has maintained buy rating on Somany Ceramics with a revised target price of Rs 217.
The domestic stock market on Wednesday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 27 points lower this morning, signalling a weak 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 maintained buy rating on Somany Ceramics with a revised target price of Rs 217. Management does not expect much recovery in sales volumes as demand remains affected in Private and Builders segments, said Emkay. The company has incurred Rs 26.18 crore in exceptional loss after a broker defaulted on payments, said Emkay. The brokerage has reduced FY20/21 EPS by 17.5 per cent/25.6 per cent considering lower sales volumes, higher depreciation costs, and lower other income. Shares of Somany Ceramics ended up 0.7 per cent at Rs 184.75 on Monday.
• ICICI Securities has maintained hold rating on Tata Communications and revised target price to Rs 371 from Rs 311. Tata Communications' total contract value wins have been healthy at US$500 million driven by Growth Services, said ICICI Securities. The disappointment for the quarter was slower growth in Growth Services and lower margin in TCTS, while the management expects recovery in coming quarters and believes operating profit margin expansion will continue, it said. The brokerage has increased operating profit estimate by 1.4-1.5 per cent. Shares of Tata Communications ended down 1.2 per cent at Rs 367.75 on Monday.
• Citigroup has maintained neutral rating on Mahindra & Mahindra and revised target price to Rs 590 from Rs 570. While tractor volumes could see an uptick, M&M’s largely diesel utility vehicle portfolio could face downward pressure in BS-VI regime and amidst increased competition, said Citigroup.The brokerage has cut its auto volume estimates, resulting in 1-4 per cent cuts in revenue estimates over FY20-FY22. However, better margins results in operating profit increasing by 0-3 per cent (lower commodity costs). Earnings estimates are increased by 4-9 per cent, said Citigroup. Shares of Mhaindra & Mahindra ended down 0.9 per cent at Rs 574.95 on Monday.
• Jefferies has retained hold rating on Whirlpool of India with a revised target price of Rs 1970. The brokerage said it likes Whirlpool's strong positioning, business levers and balance-sheet, it remains circumspect about underlying industry risks such as rising competition (new entrants, expansion by incumbents), weak demand and tight liquidity. Volatility in key commodities and rupee are monitorables, said Jefferies. Shares of Whirlpool of India ended up 1.4 per cent at Rs 2227.50 on Monday.
• Nomura has maintained buy rating on Motherson Sumi Systems and raised target price to Rs 158 from Rs 131. The company's capital expenditure cycle is largely over in FY19 and healthy free cash flow is expected in FY20 and FY21, the brokerage said. Motherson Sumi is a play on strong volume growth expected in India's passenger vehicle industry and rising content per car, said Nomura. Globally, rising polymer usage and advanced mirror technology should continue to drive new order wins, said Nomura. New global commercial vehicle wiring harness opportunity with PKC's acquisition aids growth visibility, it said. Shares of Motherson Sumi Systems ended up 4.1 per cent at Rs 134.6 on Monday.
• Edelweiss has given a buy rating on Indian Hotels (IHCL) on the back of turning around of outlook and valuation and reporting highest-ever margin in the past decade, with a target price of Rs 197 per share. Edelweiss believes that this multiple will sustain given the sector’s improving outlook and focus on deleveraging balance sheet driven by increase in room addition through management contracts. Shares of Indian Hotels declined 1.8 per cent to Rs 146.50 on Monday.