Top brokerage calls for August 26: Nomura upgrades India to 'overweight'; Jefferies cautious on financials

SUMMARY

Indian shares are set for a strong start on Monday after finance minister Nirmala Sitharaman announced a series of measures to revive the economy and encourage investment, including withdrawal of foreign portfolio investor (FPI) tax surcharge and capital infusion in PSU banks. However, a broader selloff in global markets likely to cap gains. Among brokerages, Nomura upgraded India to 'overweight', while Jefferies is cautious on financials. Here are the top brokerage calls for Monday:

By CNBC-TV18Aug 26, 2019 7:59:29 AM IST (Published)

Nomura India strategy: The brokerage upgraded India to 'overweight' on positive local developments amid rising global uncertainty. Reform measures and sectoral incentives could provide a much-needed booster shot, it said, adding that H2CY19 recovery is expected.

Jefferies India strategy: Several measures announced by finance minister Nirmala Sitharaman for higher economic growth including a few for autos, it noted, adding that no goods and services tax (GST) rate cut a disappointment particularly for 2-wheelers. The brokerage is overall cautious on financials.

Credit Suisse on Cipla: The brokerage maintained 'neutral' call on the stock but cut its target to Rs 445 per share from Rs 515 earlier. It also reduced the company's FY20/FY21 EPS estimates by 10 percent/14 percent factoring in lower US sales and profits in estimates.

Morgan Stanley India strategy: India's underperformance on a year-to-date basis to emerging markets may reverse in the weeks ahead, the brokerage said, adding that from a portfolio perspective, they like financials, consumer discretionary and industrials.

Credit Suisse on Metropolis Health: The brokerage initiated coverage on the stock with a 'neutral' call and target at Rs 1,000 per share. Low entry barriers and ramp-up of e-pharmacies can impact growth, while key risks are e-pharmacies ramping up in diagnostics, government price caps.

Macquarie on auto sector: According to the brokerage, steps to improve liquidity and lower auto loan rates should benefit all segments and the measures will have a small positive impact on the near-term demand.