Top brokerage calls for August 1: CLSA, HSBC bullish on ZEE; Credit Suisse, Morgan Stanley cut price target for Eicher Motors

SUMMARY

Indian shares are set to start August on a weak note, tracking sluggish Asian stocks, following US Federal Reserve chairman Jerome Powell's fresh comments on global slowdown, coupled with simmering US trade tensions. On Wednesday, the Fed suggested that policymakers were not embarking on a new cycle of rate-cutting after it trimmed interest rates by 25 basis points. Among brokerages, CLSA and HSBC were bullish on Zee, while Credit Suisse and Morgan Stanley cut the price target for Eicher Motors. Here are the top brokerage calls for Thursday:

By CNBC-TV18Aug 1, 2019 8:18:18 AM IST (Published)

CLSA on Zee Entertainment: The brokerage has 'buy' call on the stock with a target of Rs 515 per share. Stake sale to allay near-term concerns but management continuity remains critical, CLSA said, adding that the deal will lower promoter holding to 25 percent and a further 8-18 percent stake sale is likely.

HSBC on Zee Entertainment: The brokerage is bullish on the stock with a target of Rs 434. The transaction should help promoters pare debt but the possibility of getting a strategic investor on board looks bleak, HSBC said.

Credit Suisse on Eicher Motors: The brokerage has a 'hold' rating on the stock but reduced its target to Rs 15,200 from Rs 19,900 earlier. Margin continues to trend down, it said, adding that the company should focus on distribution expansion for revival.

CLSA on Eicher Motors: The brokerage has an 'outperform' rating on the stock with target cut to Rs 19,000 from Rs 21,000 per share. Gross-profit-per-vehicle for Royal Enfield has been flattish in recent quarters but its near-term outlook remains weak given depressed auto demand, CLSA added.

Morgan Stanley on Eicher Motors: The brokerage has an 'equal-weight' call on the stock but slashed its target to Rs 17,052 from Rs 21,331 per share. Regulation-driven price hikes have led to a sharp slowdown in volumes and BS-VI is the next headwind, the brokerage said.

CLSA on UPL: The brokerage maintains 'buy' call on the stock but cut its target to Rs 720 per share from Rs 813 earlier. The company is on track to benefit from Arysta Synergies, the brokerage added.

Nomura on Ashok Leyland: The brokerage has a 'neutral' call on the stock with a target of Rs 91 per share. Await more clarity on demand outlook, product mix, and pricing action, the brokerage said, adding that M&HCV demand outlook continues to worsen further.