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Top brokerage calls for Friday: Kotak downgrades Maruti Suzuki, DB positive on UPL, Gujarat Gas

Top brokerage calls for Friday: Kotak downgrades Maruti Suzuki, DB positive on UPL, Gujarat Gas

Top brokerage calls for Friday: Kotak downgrades Maruti Suzuki, DB positive on UPL, Gujarat Gas
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By CNBC-TV18 Mar 8, 2019 8:15:53 AM IST (Published)

Benchmark indices are likely to remain negative following Asian markets, which shuddered lower on Friday after the European Central Bank slashed its growth forecasts. Here are the top brokerage calls for today:

Indian shares are likely to remain negative following Asian markets, which shuddered lower on Friday after the European Central Bank slashed its growth forecasts, leaving investors fearing the worst for the global economy.

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On Wednesday, the Nifty50 closed at 11,058, up 5 points, and the BSE Sensex climbed 89 points to close at 36,725.
Kotak Institutional Equities downgraded Maruti Suzuki and cut its target to Rs 7,500 from Rs 7,600. Meanwhile, Nomura maintained a neutral call for ALkem Labs but cut its target price. Deutsche Bank, however, was positive on UPL and Gujarat Gas.
Here are the top brokerage calls for today:
Kotak Institutional Equities on Maruti Suzuki
- Downgraded to add from buy, target cut to Rs 7,500 From Rs 7,600 per share
- Domestic passenger vehicle industry is likely to grow in low single-digit
- Expect the company to gain market share, but cut its earnings per share (EPS) estimates by 4-9 percent for FY19-21
- Company to gain 290 bps market share over the next four years
Nomura on Alkem Labs
- Remain neutral call, target cut to Rs 1,965 From Rs 2,116 per share
- Factoring in impact Of competition in drug Mycophenolate Mofetil Suspension (MMS)
- MMS will likely contribute 16 percent to company's US revenues and 29 percent to net earnings in FY19
- Factoring in 52 percent and 20 percent decline in MMS sales for the company in FY20 & FY21, respectively
- MMS’ profitability is substantial, impact on net earnings is higher
Deutsche Bank on UPL
- Buy rating, target at Rs 970 from Rs 850 per share
- Valuation looks reasonable for FY21 estimate price to earnings ratio Of 12.8x
- Factor in 40 percent of the announced cost synergies Of $230 million from FY21 onwards
- Increase in FY21 estimate earnings per share is however only 2 percent
- Factor in likely restructuring costs in near-term to achieve guided synergy benefits
Deutsche Bank on Gujarat Gas
- Buy rating, target at Rs 160 per share
- NGT orders ceramic units in Morbi to shift to natural gas
- Company the primary beneficiary, Petronet LNG to benefit too
- More Action against air pollution favors natural gas consumption
- Every 1 mmscmd additional gas sales volume leads to a 20 percent increase in company's earnings
Deutsche Bank on ICICI Prudential Life
- Buy Rating, target at Rs 440 per share
- Growth trajectory strengthening, risk-reward favourable
- February was the second successive month of double-digit growth with annual premium equivalent growing at 14.5 percent year-on-year.
- FY20 to benefit from a low base; equity sentiment uptick as also a growth positive
- Margin expansion should continue
Macquarie on ABB
- PowerGrid business is to be vertically demerged into a separate company and subsequently listed
- Weak sector outlook will struggle to get the current lofty valuations
- The demerger would be incrementally negative as discovered valuations are likely to be lower
- Underperform rating, target cut to Rs 812 from Rs 967 per share
- Cut earnings estimates for next two years by 48-52 percent, primarily due to demerger
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