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Stock Analysis, IPO, Mutual Funds, Bonds & More

Cement, aviation stocks likely to shine

Going forward, estimates of banks and NBFCs could be at risk .

, ET Bureau|
Jun 13, 2019, 07.48 AM IST
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DHFL has been impacted by the liquidity crisis in the NBFC space.
Mumbai: Financial, consumer, graphite and select telecom companies were among the companies that saw the biggest cuts in target prices following their March quarter results. Cement and aviation companies saw the biggest increases in target price.

According to Bloomberg data of BSE 500 constituents which have at least five analysts tracking it, Phillip Carbon Black, CG Power, Dewan Housing Finance Corporation (DHFL), Jain Irrigation Systems, Sterlite Technologies, Yes Bank, Jubilant Life Sciences, Edelweiss Financial Services and Vodafone India saw consensus target prices being reduced by 18-40 per cent.

DHFL has been impacted by the liquidity crisis in the NBFC space while Yes Bank posted its firstever quarterly loss in the three months ended March on the back of higher provisions.

InterGlobe Aviation, which runs IndiGo, India’s largest airline by market share, saw consensus target price increasing 29 per cent to Rs 1,310.30 as the airline is seen benefiting from the shutdown of Jet Airways (India). SpiceJet also saw analysts turning more bullish on it as the carrier is also expected to be a beneficiary of troubles at Jet Airways. The consensus target price for SpiceJet has increased 37 per cent from April 1 to Rs 111.29 as of Tuesday.

“Cement companies saw increases in prices across the country in the March-April period accompanied by good volume growth. These prices and volume growth was expected to sustain post elections, which is why consensus target prices have been increased for them. Jet's trouble has benefited the other two airlines as they are likely to see less competition and higher load factor,” said Deepak Jasani, head of retail research at HDFC Securities.

Going forward, estimates of banks and NBFCs could be at risk if slippages continue at the same pace as in the recent past, said Jasani. “Over-leveraged companies will continue to face pressure as they could have difficulty in servicing debt. There may be some ripple effect of this on banks and NBFCs because of that.”

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