Analyst Calls: Maruti Suzuki, Tech Mahindra, Petronet, Astral Poly Technik

Good morning!

The domestic stock market on Thursday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 45.50 points higher this morning, signalling a good start for Dalal Street.

As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks.

• Maybank Kim Eng Securities has maintained sell rating on Maruti Suzuki India with a target price of Rs 4299. Domestic and export demand for cars fell sharply in the second quarter and continues to pose downside risk to earnings, said Maybank Kim Eng. The stock has risen the past one month on market hope for better sales in the festive season but the brokerage said it is doubtful, and the earnings beat in the second quarter was driven only by an income tax cut. The brokerage has retained sell rating as valuation is stretched. The stock ended down 2.1 per cent at Rs 7554.20 on Wednesday.

• HSBC has maintained buy rating on Tech Mahindra with a target price of Rs 800. Most IT companies have alluded to stronger growth and a positive outlook for telecoms IT demand, said HSBC. This is positive reinforcement to overall growth in spend by the sector, which should benefit Tech Mahindra, the brokerage said. Tech Mahindra recently announced a large deal with AT&T andmore could be in the pipeline, said HSBC. The stock ended flat at Rs 754.55 on Wednesday.


• Kotak Institutional Equities has retained add rating on Carborundum Universal and revised fair value to Rs 325 from Rs 335. Carborundum Universal continues to focus on internals (cost and capex controls, expanding distribution network, and developing new markets) as demand slowdown continues to take toll, said Kotak Institutional. Such slowdown and other market changes (compliant Chinese capacities, US-China trade war) should yield a stronger Carborundum Universal over time, said Kotak Institutional. The stock ended up 2 per cent at Rs 308.30 on Wednesday.

• Citigroup has maintained buy rating on Petronet LNG and revised target price to Rs 335 from Rs 305. The company's EBITDA in Q2 was 9 per cent above estimates on significantly higher-than-expected Dahej volumes, said Citigroup. The company has again announced an interim dividend of Rs 5.5/ share, which is encouraging given some concerns on payouts due to inorganic capex plans, said Citigroup. The stock ended up 2.2 per cent at Rs 285.35 on Wednesday.

• CLSA has retained outperform rating on Astral Poly Technik with a target price of Rs 1305. The near-term transition in adhesives distribution will have a long-term positive impact in terms of both revenue and margin expansion, said CLSA. The piping segment will likely grow rapidly over the next few years, it said. Valuations are not cheap but 22 per cent EPS CAGR over FY19-FY22 partially justifies high valuations, said CLSA. The stock ended down 0.9 per cent at Rs 1113.70 on Wednesday.