Here’s how Nomura, Morgan Stanley rate several stocks
Nomura on Motherson Sumi:
Q2 below estimates; at a cyclical low.
BUY call, target cut to Rs 197 from Rs 249/share.
Rising content per car to drive India business; ramp-up of new plants key.
Lower EBITDA estimate by 9-11 percent For FY19-21.
FY19-21 EPS Estimate Cut By 15 percent.
Expect domestic margin to bounce back to 18.6 percent.
Valuation attractive given 22 percent EPS CAGR over FY18-21.
Nomura on NBCC:
Execution improves, margin disappoints.
NEUTRAL call, target at Rs 82/share.
Pick-up in core PMC business gives comfort on 30-35 percent revenue growth guidance.
Softening core EBITDA margin a concern.
Overall beat at the PAT level is driven by higher other income.
Morgan Stanley on M&M:
OVERWEIGHT call, target at Rs 1,063/share.
New launch costs hit margin.
S101 launch to drive growth.
2019 should be solid off a low base.
Morgan Stanley on Future Retail:
OVERWEIGHT call, target at Rs 745/share.
Operating performance was in line with our estimate.
Earnings growth 4 percent below estimate on higher interest costs.
Key positive is strong big bazaar SSSG for Q2.
Management sees strong festive season sales.
Morgan Stanley on Apollo Hospitals:
Q2 beat driven by volumes
OVERWEIGHT call, target at Rs 1,544/share.
Sweating its hospital assets to drive up EBITDA growth.
Growth in SAP and narrowing of losses should help re-rate the stock.
Nomura on M&M:
Q2 in-line; rural outlook remains positive.
New launches to drive further growth.
BUY call, target cut to Rs 982 from Rs 1,071/share.
Valuations at 9.6x FY20e look attractive.
Morgan Stanley on UltraTech:
NCLAT approves resolution plan for Binani Cement.
OVERWEIGHT call, target at Rs 4,954/share.
Binani deal is earnings-dilutive in the near term.
Operational efficiency and expansion potential medium-term positives.
Implied Binani deal value is $173/tonne.
Net debt will rise to $3.3 billion and net debt/EBITDA to 2.4x.