Stock Market

Analyst Calls: NTPC, Escorts, Quess Corp, IndusInd Bank

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Good morning! The domestic stock market on Monday showed early signs of a possible breakout from its consolidation range.

And Nifty futures on Singapore traded 6 points lower this morning, signalling a weak start for Dalal Street. As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks. • Nomura has initiated coverage on KEC International with a target price of Rs 388.

KEC International (KEC) has demonstrated strong EPS growth of 32 per cent (FY15-19) on improving EBITDA margins; however, the Street has lately been concerned about KEC’s flattish prospects in domestic power transmission - distribution and the recent rise in its working capital levels, said Nomura.

The firm expects revenue growth to be driven by the Railways and revival in global T-D over FY20-22.

The stock ended up 1.6 per cent at Rs 289.75 on Friday. • ICICI Securities has maintained buy rating on NTPC with a target price of Rs 165.

NTPC has underperformed the Nifty by 17 per cent over the last six months despite a 17 per cent adjusted profit growth in first half of FY20, which is in-line with full year estimates and has partly recovered the underperformance in the first quarter of FY20, said ICICI Securities.

Although the government has not announced the list of companies or sectors which will be considered by the government to reduce stake in, the overhang of the proposal has weighed in on shares of NTPC despite core business performance remaining strong, said ICICI Securities.

The stock ended up 1 per cent at Rs 115.60 on Friday. • Reliance Securities has a buy rating on Escortswith a target price of Rs 925.

Favourable monsoons in Escorts’ key markets of North and Central zone would support its strong outperformance in tractor industry in second half of FY20, said Reliance Securities.

Further, favourable geographical mix, strong marketing and distribution strategy would aid Escorts to improve tractor volumes going forward, said Reliance Securities.

The stock ended up 3.3 per cent at Rs 617.50 on Friday. • IIFL has a buy rating on Quess Corp with a target price of Rs 740.

The brokerage considers the recent correction in Quess Corp’s shares —without any deterioration in earnings outlook — a buying opportunity.

While the issuance of fresh shares to Thomas Cook shareholders may lead to near-term selling pressure, the brokerage expects steady improvement in financials to support the stock over time.

Quess continues to outperform TeamLease on most key parameters, yet trades at a large valuation discount, said IIFL.

The stock ended up 1.2 per cent at Rs 479.05 on Friday. • Edelweiss has maintained buy rating on IndusInd Bank with a target price of Rs 1793.

Bharat Financial’s integration and leveraging its distribution will boost IndusInd’s profitability metrics, said Edelweiss-.Portfolio growth, though lower than historical trend, will be built on superior mix while sustaining the NIM and high-fee profile.

Despite concerns on exposure to stressed groups, it will deliver reasonable and sustainable earnings growth.

The stock ended up 3.1 per cent at Rs 1486.95 on Friday.




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