These are Monday's biggest brokerage calls: ITC, realty stocks and more

SUMMARY

Indian benchmark indices BSE Sensex and NSE’s Nifty 50 are expected to extend losses on Monday after several budget proposals, including a lack of action on long-term capital gain (LTCG) tax and hike in customs duty, spooked investors. Selloffs in global markets amid fears of coronavirus in China may also weigh on Indian equities. Among brokerages, Credit Suisse, JPMorgan downgraded ITC and cut its target price post-tax hike in the budget. Here are the top brokerage calls for the day.

By CNBC-TV18Feb 3, 2020 8:16:08 AM IST (Published)

BofAML on Budget 2020: The budget has no major stimulus, said the brokerage, adding that the focus will move back to Fed and earnings. MSCI India should continue to move with EMs, it noted.

Morgan Stanley on Realty: As per the brokerage, new direct tax regime and tax extensions for affordable housing should help demand. Dividend distribution tax (DDT) removal should result in 2-5 percent higher cash with companies, it added.

Credit Suisse on ITC: The brokerage downgraded the stock to 'neutral' with target cut to Rs 225 per share from Rs 330 earlier due to a sharp increase in cigarette taxes in the budget.

JPMorgan on ITC: The brokerage downgraded the stock to 'neutral' from 'overweight' and cut its target to Rs 235 per share. The tax hike would impact volume growth and weigh on stock multiples.

Credit Suisse on Budget 2020: According to the brokerage, a lack of policies to target stress in realty and financial services may disappoint the market. It added that growth may remain subdued for longer than market expectations.

Credit Suisse on health sector: The brokerage said that the budget was marginally negative for the pharma sector.

CLSA on Budget: Budget 2020 had no big changes. As per the brokerage, high dividend yield was likely winner but tax hike a concern for ITC.

CLSA on Infra: The brokerage said that the government’s off-budget funding could help beat targets. It had 'buy' calls on builders like L&T, JK Infra, NCC, Sadbhav, and IRB.

CLSA on Power: Closing non-compliant thermal plants will improve demand for NTPC’s power, said the broekrage. It added that LIC IPO plan could be a blessing in disguise for NTPC and PowerGrid.

Nomura on Budget: The brokerage suggests avoiding meaningful exposure to PSUs in the current slow-growth environment. It was 'overweight' on selective financials but removed ICICI Prudential from its model portfolio.