Top brokerage calls for June 26: UBS cautious on global and Indian market, Citi Research bullish on gas and tyre sectors

SUMMARY

Indian benchmark indices are likely to open lower on Wednesday following negative sentiment in the global markets. Among brokerages, Citi Research remained bullish on the tyre and gas sector while slightly cautious on the cement sector. UBS believes that there could be a mild global recession given the trade war and global growth. Meanwhile, other brokerages are bullish on Sun Pharma, SBI Life Insurance and PI Industries. Here are the top brokerage calls for Wednesday:

By Mousumi Paul Jun 26, 2019 8:38:38 AM IST (Published)

1. Deutsche Bank on SBI Life Insurance: The brokerage believes that the management sounded confident in achieving higher growth in FY20. It also expects the value of new business (VoNB) margin to expand by 100 basis points in FY20.

2. Credit Suisse on PI Industries: The research house is confident that the headwinds seen in the agrochem markets are on account of the weather. However, it believes that the company will continue to remain free cash flow positive.

3. UBS on Global Markets: UBS believes that the current trade conflict could push the global equities down by 20 percent. It also said that there may be chances of facing mild 'global recession', similar to the Eurozone crisis in the 1980s.

4. UBS on Indian Market: It said that the monsoon affects around 5 percent of India's Gross Value Added. The brokerage remains 'overweight' on consumer discretionary and 'neutral' on consumer staples.

5. Citi Research on Cement Sector: The brokerage firm said that the cement volume pullback is likely to be temporary. It reiterated 'buy' call on UltraTech Cement, ACC, Ambuja Cement and Dalmia Bharat.

6. Citi Research on Gas Sector: It said that the petronet LNG should see a sequential uptick in volumes. The research house is bullish more on city gas distribution companies like Gujarat Gas and IGL.

7. Citi Research on Tyre Companies: The brokerage said that countervailing duty on Chinese tyre imports indicate that the government is supporting the industry.

8. Citi Research on TVS Motor: It cut the gross margin estimates for higher raw material prices, and EPS estimates by 2-6 percent for FY20-22.

9. CLSA on Sun Pharmaceuticals: The research house believes that de-focus on tail brands is leading to the slowing growth. However, it said that the strong India positioning is a key positive.