Top brokerage calls for July 16: CLSA downgrades M&M; Credit Suisse positive on HDFC, LIC Housing

SUMMARY

Indian shares are likely to open little changed on Tuesday, tracking muted global cues, amid caution ahead of key June-quarter earnings and the US Federal Reserve meeting at the end of this month. Asian shares traded marginally higher ahead of US retail sales and corporate earnings. Among brokerage, CLSA downgraded M&M to 'sell and cut its price target. Credit Suisse recommended HDFC, LIC Housing, and M&M Finance among NBFCs. Here are the top brokerage calls for Tuesday:

By CNBC-TV18Jul 16, 2019 8:11:55 AM IST (Updated)

CLSA on M&M: The brokerage downgraded the stock to 'sell' from 'underperform' and slashed its target to Rs 590 per share from Rs 690 earlier. It expects volumes and profit to fall 6 percent and 18 percent, respectively from FY19-21.

Jefferies on Autos: The brokerage said the auto down-cycle is in its 2nd to 4th quarter across segments. Jefferies downgraded Eicher Motors to 'hold' and upgraded M&M to 'buy'. It maintained an 'underperform' rating on Ashok Leyland and Bajaj Auto, and, a 'buy' on Maruti Suzuki.

Citi on Eicher Motors: The brokerage is bullish on the stock but cut its target to Rs 22,500 per share from Rs 22,800 earlier. It sees margin headwinds as we head into a cyclical downturn plus BS-VI transition.

Credit Suisse on Financial: DHFL's Q4 results highlighted the need for NBFC asset quality review, it said. The brokerage remained selective in NBFC space and prefers retail-oriented companies. HDFC, LIC Housing, and M&M Finance are top picks for Credit Suisse.

Credit Suisse on Steel: India's steel domestic supply growth continues to lag behind demand growth. The brokerage likes Tata Steel, JSW Steel, and JSPL in the sector, but expects more price hikes.

Citi on L&T Infotech: The brokerage has a 'buy' call on the stock but cut its target price to Rs 1,865 from Rs 2,010 earlier. It revised FY20-21 EPS estimates given a tougher demand environment.

Citi on Tata Steel: The brokerage maintained 'sell' call on the stock and says it has indicated liquidity issues in India and demand impact.