HomeMarket NewsStocks NewsTop brokerage calls for May 16: CLSA cuts TP of Jubilant FoodWorks, Lupin, Deutsche Bank bullish on Tata Chemicals

Top brokerage calls for May 16: CLSA cuts TP of Jubilant FoodWorks, Lupin, Deutsche Bank bullish on Tata Chemicals

Among brokerages, CLSA maintained 'buy' call on Jubilant FoodWorks but cut its target to Rs 1,500. For Lupin, the brokerage had a 'sell' rating and cut the stock's target to Rs 700 per share.

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By CNBC-TV18 May 16, 2019, 8:26:15 AM IST (Published)

Top brokerage calls for May 16: CLSA cuts TP of Jubilant FoodWorks, Lupin, Deutsche Bank bullish on Tata Chemicals
The Indian indices are likely to open on a flat note on Thursday as trade worries eased on reports that the US President Donald Trump is planning to delay tariffs on auto imports, providing much-needed relief to markets.


Asian shares remained steady with MSCI’s broadest index of Asia-Pacific shares outside Japan trading flat and both Australia and South Korea little changed. Meanwhile, Japan’s Nikkei fell 0.6 percent, with banks hurt by weak earnings.

On Wednesday, benchmark indices ended lower in a volatile trade led by a fall in banks, auto, and metal stocks. The Sensex ended 204 points lower at 37,115, while Nifty was down 65 points at 11,157.

Among brokerages, CLSA maintained 'buy' call on Jubilant FoodWorks but cut its target to Rs 1,500. For Lupin, the brokerage had a 'sell' rating and cut the stock's target to Rs 700 per share. CLSA maintained outperform on Motherson Sumi. Deutsche Bank had a 'buy' rating for Tata Chemicals and 'hold' for Tata Global post-merger announcement.

Here are the top brokerage calls for today:

CLSA on Jubilant FoodWorks

- Same-store growth misses but a higher margin and other income drive earnings

- Same-store growth of 6 percent much lower than our forecast

- Mid-single digit same-store growth raises concerns of a slowdown and heightened competition

- Company’s outlook remains positive on its long-term opportunities

- Cut EPS estimates for FY20-21 by 7-11 percent

- Maintain buy call, target cut to Rs 1,500 from Rs 1,600 per share

CLSA on Lupin

- Sell rating, target cut to Rs 700 from Rs 730 per share

- Turnaround some time away and contingent on timely US approvals

- Q4 results below estimates due to lower-than-expected US revenue

- US sales up 23 percent QoQ, led by Ranexa launch

- US FDA compliance issues could be resolved more towards H2FY20

- A turnaround in operations is still some time away

- Cut FY20-21 EPS estimates by 6-14 percent on higher tax rate guidance

CLSA on Motherson Sumi

- Maintain outperform, target cut to Rs 135 from Rs 150 per share

- Macro pressures hurt, but PE is at 9-year low versus peers

- Cut FY20-21 EPS estimates by 15-16 percent on lower topline and margin

- Escalation of trade wars a key risk

Deutsche Bank on Tata Chemicals

- Buy rating, target raised to Rs 715 from Rs 695 per share

- De-merger unlocks consumer business valuation; buy on 30 percent upside potential

- Transaction EV of Rs 5,800 crore is 10 percent higher than what we had built into target

Deutsche Bank on Tata Global

- Hold rating, target at Rs 240 per share

- Merger of consumer products business of Tata Chemicals into company positive for long term

- Like the merger for the strong brand value of Tata Salt

- Strong distribution capabilities can be leveraged by combined business

- Do not see much margin accretion

- Merger would lead to pre-tax synergies of 2-3 percent

10 things you need to know before the opening bell on May 16

Top stocks to watch out for on May 16: Jet Airways, Lupin, Tata Chemicals, J&K Bank