The Indian benchmark indices are likely to open on a negative note on Tuesday amid consolidation after hitting record highs in the previous session. Asian shares inched higher as investors paused for breath after a volatile Wall Street session, but deeper concerns about growth capped gains. At 7:20 AM, the SGX Nifty was trading 45 points lower at 12,072.

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On Monday, the indices ended at record closing highs, mainly led by a rally in auto stocks, after a decline in Q4 GDP increased prospects of a 50 basis-point rate cut by the Reserve Bank of India in the current fiscal year. The BSE Sensex rallied 553 points to 40,268, while the Nifty 50 added 166 points to close at 12,088.

Among brokerages, HSBC maintained 'hold' on Maruti, while, Nomura maintained 'buy' on M&M. UBS gave a 'sell' rating on HeroMoto Corp, Eicher Motors, and Bajaj Auto. For financials, Citi was bullish on IndusInd Bank. In the consumer sector, UBS picked ITC, Asian Paints, Godrej, Titan, and Britannia.

Here are the top brokerage calls for Tuesday:

HSBC on Maruti

- Maintain 'hold', target at Rs 7,200 per share

- Retail traction remains weak

- On a positive note, enquiries picked up post the national election results

- Quality and sustenance critical to justiFY current estimates

- Revise down volumes by 3.2 percent for FY20

UBS on Auto Sector

Nomura on M&M

- Maintain 'buy' call, target at Rs 827 per share

- Company will be ready with BS-6 vehicles before September 30

- Have been able to reduce upgradation cost to BS-6 at 50 percent of European levels

- Expect new launches and pre-buying to drive 15 percent UV growth in FY20

- With costs expected to rise 5-10 percent, it should lead to 8 percent decline in FY21 volumes

- Tractor industry is in a downcycle; see -5 percent/10 percent volume growth in FY20-21

HSBC on Manufacturing PMI

Citi on IndusInd Bank

- 'Buy' rating, target at Rs 1,980 per share

- The company expects growth in CV financing segment to remain healthy

- Bank expects to keep FY20 credit costs below 60 bps

- Bank expects Bharat Financial merger to get formal NCLT nod in a few weeks

UBS on Consumer Sector

- Q4 consumer sector volume growth at 6.4 percent YoY vs 9.9 percent in first 9 months of FY19

- Growth differential between rural and urban significantly narrowed in Q4

- Discretionary posted topline growth of 18.5 percent vs 6.3 percent by staples in Q4

- Available data points do not yet indicate a structural economic slowdown

- Demand in consumer staples could recover in a staggered fashion over 2019

- Top picks are ITC, Asian Paints, Godrej, Titan and Britannia

- ITC is a key call, given its earnings growth visibility and risk-reward skew

CLSA India Strategy

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