Top brokerage calls for August 29: Citi initiates 'buy' on Polycab; Morgan Stanley bullish on Oberoi Realty, Cement sector

SUMMARY

Indian shares are likely to open lower on Thursday, tracking weak Asian stocks, as intensifying US-China frictions are likely to weigh on investor sentiment. On Wednesday, Indian benchmark indices the Sensex and the Nifty50 ended lower due to heavy losses in metals, energy, banking and auto stocks. Among brokerages, Morgan Stanley is positive on Oberoi Realty and Cement sector but bearish on RBL Bank, while, Credit Suisse has maintained 'outperform' on IndiGo. Here are the top brokerage calls for Thursday:

By CNBC-TV18Aug 29, 2019 7:54:25 AM IST (Published)

Credit Suisse on IndiGo: The brokerage maintained 'outperform' on the stock with a target of Rs 1,900 per share. The brokerage maintained a positive view as it feels several factors can drive further upside, and flat industry capacity and strong yields could benefit the company.

HSBC On Grasim: The brokerage has a 'buy' call on the stock but has cut its target to Rs 790 per share from Rs 910 earlier.

Citi Research on Polycab: The brokerage initiated a 'buy' call on the stock with a target price of Rs 736 per share. The brokerage expects return on equity of 18 percent over FY19-21. The target price is supported by EPS CAGR of 15 percent over FY19-21, it added.

Morgan Stanley on Oberoi Realty: The brokerage is 'overweight' on the stock with a target of Rs 633 per share. The brokerage believes that the short-term valuation is much more compelling, and the share price will rise in absolute terms over the next 60 days. Borivali and Worli malls will likely be operational by November 2020 and December 2021, it added.

Morgan Stanley on RBL Bank: The brokerage maintained 'underweight' on RBL Bank with a target price of Rs 400 per share due to concerns related to asset quality. The brokerage believes that the key to track would be clarity on time and timing of capital raising.

Jefferies on SBI: The brokerage remained bullish on the stock with a target price at Rs 370 per share. The brokerage believes that the valuations are below the historical average and seem attractive. Expect the bank to grow its market share but at lower NIMs and fee, added the brokerage.

CLSA on India Strategy: CLSA believes that the weak activity could be erased with the actions from government and the RBI. The brokerage further said that the contraction in auto volumes and credit growth deepened. Government seems to be adopting a more interventionist approach to revive growth, added the brokerage.

Morgan Stanley on Cement: The brokerage expects cement industry demand growth to slow to 4 percent in FY20. It believes that the prices will correct over coming quarters, and that the valuations could find support because of better relative profitability.