These are Tuesday's biggest brokerage calls: Kotak Mahindra Bank, IndiGo and more

SUMMARY

Indian shares are set for a tepid start on Tuesday after the International Monetary Fund (IMF) cut the country's gross domestic product (GDP) forecast to below 5 percent. Asian equities are also trading lower as the IMF cut its global growth forecast for the current year to 3.3 percent. The Dalal Street will closely track shares of Kotak Mahindra Bank and Federal Bank post their third-quarter results. Here are the top brokerage calls for Tuesday:

By CNBC-TV18Jan 21, 2020 9:02:34 AM IST (Updated)

Credit Suisse on Kotak Mahindra Bank: The global brokerage has cut estimates for the bank by 5-7 percent as Kotak Mahindra Bank remains cautious on growth outlook. Credit Suisse has maintained a 'neutral' stance on the stock at a target price of Rs 1,450 per share.

Citi on Federal Bank: The brokerage has 'buy' rating on Federal Bank and raised its target price to Rs 110 per share afgter the bank's third quarter results results on Monday. While slippages remain high, they were predominantly from know sources, it said.

Nomura on Kotak Mahindra Bank: The brokerage has reduced its price target on the stock to Rs 1,600 per share from a previous target of Rs 1,650 as expectation of high growth and low credit costs not sustainable. The disappointment has led to earnings forecast cut of 6-9 percent, Nomura said.

CLSA on GAIL: Rising gas volumes and reforms are potential triggers for GAIL in 2020, says the brokerage while maintaining 'buy' stance at a target price of Rs 180 per share. CLSA expects the inclusion of gas in GST.

Kotak Institutional Equities on Federal Bank: The domestic brokerage expects earnings compound annual growth rate of 25 percent over FY19-22 for Federal Bank, its top midcap 'buy' idea with a target price of Rs 120 per scrip.

Citi on IndiGo: The brokerage expects IndiGo to report a fairly strong quarter with revenues up 24 percent YoY. Citi has maintained a 'neutral' stance on the stock at a target price of Rs 1,700 per share as the required increase in fares to offset fuel costs is not very high.

Jefferies on Federal Bank: The brokerage has cut its FY20 earnings estimate for Federal Bank by 0.5-2 percent after the bank announced its Q3 earnings on Monday. Jefferies has set a target price of Rs 120 per share, maintaining its 'buy' stance.

Jefferies on Kotak Mahindra Bank: The brokerage has reduced its target price on the stock at Rs 1,375 (from Rs 1,380 per share) with 'underperform' stance as Jefferies expects 24 percent earnings per share (EPS) compound annual growth rate for Kotak Mahindra Bank over FY19-22. Valuations look steep at current levels, it said.

PhllipCap on Kotak Mahindra Bank: The brokerage has maintained 'neutral' stance at a target price of Rs 1,660 per share as the bank remains cautious given unfavourable risk return matrix.

Citi on Kotak Mahindra Bank: The brokerage expects the company to maintain its conservative stance in lending and has lowered FY20 and FY21 profit estimates by 4 percent. The target price is at Rs 1,860 per share with 'neutral' stance.

IDFC Securities on Kotak Mahindra Bank: Given the share's rich valuation, slowing growth remains a key monitorable, says IDFC Securities. It has maintained 'outperform' stance given Kotak Mahindra Bank's superior asset quality and high profitability.