Top brokerage calls for September 18: Credit Suisse downgrades Britannia, Pidilite; CLSA cautious on autos

SUMMARY

Indian shares are likely to open in green on Wednesday as falling crude oil prices eased inflationary and trade deficit concerns. Global markets traded mixed amid caution ahead of the US Federal Reserve’s monetary policy decision later today. Among brokerages, CLSA is bullish on GAIL, while Credit Suisse downraged Britannia and Pidilite. Here are the top brokerage calls for Wednesday:

By CNBC-TV18Sept 18, 2019 8:39:01 AM IST (Updated)

Credit Suisse on FMCG: The brokerage said that this is the worst slowdown for the sector in 15 years and there's no quick fix. It downgraded Britannia to 'neutral' and Pidilite to 'underperform' and also cut the target prices for both these companies. It prefers Nestle, Dabur, and Colgate in the sector.

CLSA on auto: The brokerage remains cautious on the sector on weak demand and regulatory pressures. Demand pick-up in balance part of the festive season is crucial, it added. The brokerage has negative stock ratings on 70 percent of its Indian auto coverage.

CLSA on GAIL: The brokerage has a 'buy' call on the stock with a target at Rs 165 per share. The gas-trading hub should pave the way for the inclusion of natural gas in the goods and services tax (GST) regime, the brokerage said, adding that second half of FY20 should be better for the company than the first half.

Credit Suisse on Dr Reddy's: The brokerage has an 'outperform' call on the stock with a target at Rs 3,055 per share. It said that the company's launch momentum is strong in the US and it has multiple option values from China injectable opportunity.

Citi on Bharti Airtel: The brokerage has a 'buy' rating on the stock but cut its target to Rs 400 per share from Rs 405 earlier. The brokerage said that the company is its only 'buy' in the telecom sector as a diversified revenue stream has held it in good stead.

Citi on AU Small Finance Bank: The brokerage is bullish on the stock with a target at Rs 720 per share. It expects the asset quality of vehicle financing segment to be largely stable, and sees used vehicle, MSME as other large segments offering growth.