Analyst Calls: Edelweiss, BHEL, AIA Engineering
Credit Suisse has cut target price on Edelweiss Financial Services to Rs 135 from Rs 155
The domestic stock market on Friday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 31.50 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.
• Credit Suisse has cut target price on Edelweiss Financial Services to Rs 135 from Rs 155, and retained neutral rating. Edelweiss' second quarter profit declined 80 per cent from year ago, reflecting funding market stress and high capital market leverage, said Credit Suisse. The brokerage has cut earnings per share estimates by 2-12 per cent to factor in loan book and margin contraction, and cyclical slowdown in the advisory business, although its medium-term outlook remains intact. The stock ended up 5 per cent at Rs 128.20 on Thursday.
• Kotak Institutional Equities has downgraded BHEL to sell from reduce and cut fair value to Rs 46 from Rs 56. The linkage between BHEL’s cash profits and cash flows has broken over the past one year, said KIE. Diversification beyond the power segment is not significant to overcome pressures of weak commercial terms and cash flow profile of BHEL’s power customers, the brokerage said. The stock ended down 1.4 per cent at Rs 53.8 on Thursday.
• Nomura has downgraded AIA Engineering to neutral from buy and lowered target price to Rs 1,895 from Rs 1,970. The management has cut its volume guidance and attributed it to uncertain outlook perceived by miners, said Nomura. The brokerage has turned cautious on the stock as clarity is yet to emerge on the duration of the mining slowdown. Nomura has cut operating profit estimates for FY21 and FY22 by 17-19 per cent but has cut EPS estimates by only 7-8 per cent on lower tax rates. The stock ended down 3.2 per cent at Rs 1,641 on Thursday.