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Top brokerage calls for August 27: HSBC upgrades BHEL to 'buy'; Credit Suisse prefers HCL Tech, Tech Mahindra in IT space

Updated : 2019-08-27 08:00:40

Indian shares are set for a positive start on Tuesday on the twin effect of RBI approving transfer of Rs 1.76 lakh crore surplus to the government, and finance minister Nirmala Sitharaman announcing a slew of measures to revive the economy. Meanwhile, Asian stocks tracked US shares which rose on the signs Sino-US trade hostilities might be easing. Here are the top brokerage calls for Tuesday:

<strong>HSBC on BHEL:</strong> The brokerage upgraded the stock to 'buy' but cut its target to Rs 60 per share from Rs 62 earlier. The brokerage said it continues to see near-term weakness in business fundamentals. Downside risks include a continued increase in receivables and lower margins, it added.
HSBC on BHEL: The brokerage upgraded the stock to 'buy' but cut its target to Rs 60 per share from Rs 62 earlier. The brokerage said it continues to see near-term weakness in business fundamentals. Downside risks include a continued increase in receivables and lower margins, it added.
<strong>Credit Suisse on IT Companies:</strong> 2019 has seen earnings downgrades for Indian IT, a stark contrast to 2018, the brokerage noted. It added that Infosys and Tech Mahindra have seen the sharpest EPS cuts in 2019. Rupee weakness may not help much; prefer HCL Tech, Tech Mahindra and L&T Info, it said.
Credit Suisse on IT Companies: 2019 has seen earnings downgrades for Indian IT, a stark contrast to 2018, the brokerage noted. It added that Infosys and Tech Mahindra have seen the sharpest EPS cuts in 2019. Rupee weakness may not help much; prefer HCL Tech, Tech Mahindra and L&T Info, it said.
<strong>Credit Suisse on RBI Dividend:</strong> This year's extra transfer will mostly be used to offset weak tax collections, the brokerage said, adding that the transfer should improve comfort on fiscal targets. No further sizeable transfer above net profits in future years, Credit Suisse noted.
Credit Suisse on RBI Dividend: This year's extra transfer will mostly be used to offset weak tax collections, the brokerage said, adding that the transfer should improve comfort on fiscal targets. No further sizeable transfer above net profits in future years, Credit Suisse noted.
<strong>Morgan Stanley on RBI Dividend:</strong> The government could intend to use the enhanced transfer to help meet the fiscal deficit, the brokerage noted. It will be interesting to track the government’s follow-up measures to support growth, however, a big fiscal stimulus is still a low-probability event, it added.
Morgan Stanley on RBI Dividend: The government could intend to use the enhanced transfer to help meet the fiscal deficit, the brokerage noted. It will be interesting to track the government’s follow-up measures to support growth, however, a big fiscal stimulus is still a low-probability event, it added.
<strong>Nomura on RBI Dividend</strong>: The dividend transfer will help the government achieve a 3.3 percent fiscal deficit target, the brokerage said. It also added that the Bimal Jalan Committee suggested a conservative economic capital framework.
Nomura on RBI Dividend: The dividend transfer will help the government achieve a 3.3 percent fiscal deficit target, the brokerage said. It also added that the Bimal Jalan Committee suggested a conservative economic capital framework.
<strong>Citi on RBI Dividend:</strong> According to the brokerage, the hope of a fiscal stimulus from this windfall should keep equities buoyant in the near term. It added that the windfall may be higher if the government decided to ask for another interim dividend.
Citi on RBI Dividend: According to the brokerage, the hope of a fiscal stimulus from this windfall should keep equities buoyant in the near term. It added that the windfall may be higher if the government decided to ask for another interim dividend.
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