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Top brokerage calls for Wednesday: CLSA retains 'buy' on Infosys, HSBC bullish on RIL, Dabur

Top brokerage calls for Wednesday: CLSA retains 'buy' on Infosys, HSBC bullish on RIL, Dabur

Top brokerage calls for Wednesday: CLSA retains 'buy' on Infosys, HSBC bullish on RIL, Dabur
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By CNBC-TV18 Apr 10, 2019 8:05:05 AM IST (Published)

Among brokerages, Jefferies prefers Maruti Suzuki in the auto space, while CLSA retains 'buy' rating on Infosys. HSBC is bullish on Reliance Industries and Dabur.

Indian Indices are likely to open in red on Wednesday, tracking subdued Asian peers, ahead of March-quarter earnings beginning this week. The International Monetary Fund (IMF) cut India’s growth forecast by 20 basis points to 7.3 percent for the current financial year, citing National Accounts Statistics data, which IMF said indicated softer underlying momentum. Asian shares fell as IMF lowered its global growth outlook and tensions over tariffs between the United States and Europe escalated.

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On Tuesday, the market managed to gain momentum in the last hour of trade to ended near the day's high. The BSE Sensex gained 238.69 points at 38,939.22 while the Nifty 50 rose 67.50 points to 11,672
Among brokerages, Jefferies picked Maruti Suzuki in the auto space, while CLSA retained 'buy' rating on Infosys. HSBC was bullish on Reliance Industries and Dabur. Nomura picked Lupin, Dr Reddy’s, Apollo Hospitals, and Glenmark in the pharma sector.
Here's are top brokerage calls for Wednesday:
Jefferies on Autos
- Q4 wholesale volume growth trends have been weak
- Weak economies of scale, higher discounts will hurt margin and profit
- Expect some more cuts post earnings across OEMs
- Investor focus is likely to be on retail trends
- Investor may focus on dealer inventory levels and BS-VI pre-buying
- Maruti remains our preferred pick
CLSA on Infosys
- Retain buy rating, target at Rs 930 per share
- Forecast 2 percent constant currency QoQ growth in Q4, a 30 bps margin slip
- May see another $2 bn booking quarter making this its strongest close in 6 yrs
- Should see a 3.6 percent exit rate into FY20 and inspire 9-11 percent constant currency YoY revenue growth guidance
- Inability to hold margin at 22-24 percent in FY20 would belie inherent margin resilience
- Poised to become the fastest growing large it services firm in FY20
- Margin to slip 30 bps due to forex headwinds and investments
- Margin pressure from supply crunch to be offset by operating leverage
HSBC on Dabur
- Buy call, target at Rs 480 per share
- Core focus is ayurveda and natural products, which is a rising trend
- Its competitive strategy prioritises volume growth
- Consumers willing to switch to natural products if introduced by their trusted brand
- Majority are willing to pay a premium, which should bring company significant benefits
HSBC on Reliance Industries
- Buy call, target at Rs 1,500 per share
- One of the largest companies in the organised retail market
- It’s the fastest-growing player in the grocery segment
- Forecast the grocery business to grow at a 22 percent CAGR over the next three years
(Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
Nomura on Pharma
- Expect revenue growth at 11 percent YoY in Q4
- EBITDA and net earnings are likely to record growth of 17 percent and 8 percent, respectively
- Expect revenue, EBITDA and net earnings growth at 14 percent, 30 percent and 29 percent, respectively
- Lupin, IPCA and Apollo Hospitals could see investors’ interest in the near term
- Top picks for the sector are Lupin, Dr Reddy’s, Apollo Hospitals and Glenmark
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