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Stock Analysis, IPO, Mutual Funds, Bonds & More

10 stocks that saw the biggest change in their target prices

Corporate earnings growth revival remains elusive and investor sentiment is cautious.

, ET Bureau|
Updated: Nov 18, 2019, 10.10 AM IST
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Asset management companies, insurers and healthcare players are among the stocks that saw the biggest increase in consensus target prices after the September quarter results.
Analysts have been conservative about increasing their price targets on stocks these days given that corporate earnings growth revival continues to remain elusive and investor sentiment is turning cautious. At the same time, they have been prompt in cutting target prices at the slightest evidence of stress. Asset management companies, insurers and healthcare players are among the stocks that saw the biggest increase in consensus target prices after the September quarter results, while companies in banking, telecom and housing finance spaces saw the biggest cuts to target prices. ET takes a look at 10 stocks that have seen the biggest increases or cuts in target prices by analysts after the September quarter results.

HDFC ASSET MANAGEMENT COMPANY
The largest AMC in India reported a 79% jump in profit after tax at Rs 368.3 crore in the quarter ended September. The stock is trading at three times its issue price of Rs 1,100. While the AMC has seen one of the biggest target price increases in recent weeks, many believe the upside is limited. “HDFC AMC is the best placed to capitalise on the long-term growth opportunity in India’s mutual fund industry...But near-term upside is limited, given the recent re-rating,” said IIFL Securities in a note.

WHIRLPOOL OF INDIA
Analysts said Whirlpool’s second quarter results were ahead of estimates. “Q2FY20 was a robust quarter for Whirlpool, likely boosted by pre-festival sales in September 2019 as well,” the brokerage said. Whirlpool’s net profit rose 63.8% to Rs 128.7 crore in the September quarter. Though the consensus target price increased by 26% after September quarter results, analysts believe valuations are stretched at 40 times FY21 estimates.

MANAPPURAM FINANCE
The company’s consolidated profit jumped 82% in the September quarter to Rs 402.3 crore, which led to a 20% increase in consensus target price. “Pick-up in gold-loan in the coming quarters, higher gold prices and favourable regulatory environment will act as a positive catalyst. We believe that the company has the potential to deliver 20% plus RoE (return on equity) driven by RoA of 4% plus,” said IDBI Capital, retaining buy with a target price of Rs 195.

NARAYANA HRUDAYALAYA
Net profit of Narayana Hrudayalaya rose 233.80% to Rs 45.33 crore in the quarter ended September as against Rs 13.58 crore in the same quarter last year. “NARH remains the best-positioned hospital to benefit from the formalisation of large latent demand. The past three quarters have shown better execution and improved margins. Management has also said it is not looking at further capex,” said Jefferies in a note last week, retaining its buy rating and target price of Rs 340.

DR LAL PATHLABS
The company’s consolidated profit in the September quarter rose 41.4% at Rs 81 crore. “We believe that the long runway and good visibility on growth and high return on capital employed (RoCE) should continue to support premium multiples. We believe that the long runway and good visibility on growth and high RoCEs should continue to support premium multiples,” said Citigroup, raising its target price on the stock to Rs 1,700 from Rs 1,475.

INDIABULLS HOUSING FINANCE
Indiabulls Housing Finance reported over 32% decline in its consolidated net profit to Rs 702.18 crore in the September quarter. Morgan Stanley has cut its target price by 49% to Rs 210 as it continues to find the risk-reward unfavourable given the uncertainty on multiple counts and high stock volatility. “The stock has been and should remain volatile given numerous swing factors — news flow around the litigation outcome, asset quality, and funding access. We expect significant downside in our bear case,” said Morgan Stanley.

RBL BANK
RBL Bank’s net profit slumped 73% in the quarter ended September as bad loans weighed. Analysts do not rule out further negative surprises on the asset quality front. “The management has guided for almost similar slippages in the next quarter. Further surprises on asset quality cannot be ruled out given the high exposure to stressed corporate sectors like NFBCs, real estate, construction and power, and higher exposure to riskier credit card/ microfinance sector in a slowing economy,” said Ambit Capital, retaining its sell rating with a target price of Rs 269.

ZEE ENTERTAINMENT ENTERPRISES
Zee reported muted second quarter results. The company reported a 6.9% rise in net profit for the second quarter. “Material growth is likely to resume once demand from FMCG, auto, among others, revives...though the valuation is attractive now, resolution of promoter’s pledged shares remains key trigger for the stock,” said Edelweiss in a note. The brokerage has a buy rating on the stock with a target price of Rs 399.

MAHINDRA LOGISTICS
The company reported a decline of 41% in September quarter consolidated net profit at Rs 11.2 crore. “Plummeting auto volumes remain a near-term obstacle, but robust growth in non-Mahindra, non-auto and warehousing segments, and robust client addition are encouraging long-term developments,” said BOB Capital Markets in a post results note. The brokerage has maintained buy rating on the stock with a target price of Rs 460.

DISH TV INDIA
The DTH operator reported a consolidated loss of Rs 96.4 crore in September quarter. “DTH business may remain under pressure from NTO and also from cable operators led by Reliance. Stock is trading at 3.7 times EV/EBITDA which is a 60-70% discount to its historical average, making it attractive from an M&A perspective,” said HSBC, retaining hold rating and target price of Rs 34.

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