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CLSA retains sell rating on Union Bank, Titan

“Union Bank is focusing on recoveries, and its ability to deliver here is key, else estimates for FY17 may see downsides,” said CLSA.

, ET Bureau|
Updated: Nov 05, 2016, 02.35 PM IST
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CLSA retained its ‘sell’ rating on Titan’s stock with a target price of Rs 300.
CLSA retained its ‘sell’ rating on Titan’s stock with a target price of Rs 300.
Mumbai: CLSA India has retained sell ratings on Titan Company and Union Bank following their quarterly results. Here’s what the brokerage said:

Union Bank: CLSA retained its ‘sell’ recommendation on the lender citing low return on assets and higher stress loans even as it rolled forward the target price to Rs 120 from Rs 115 earlier. The brokerage firm that higher credit costs pulled down the bank’s September quarter net profit by 73% to Rs 1,800 crore from the same period last year. CLSA said the key disappointing factor was slippages which at 5% were high.

“The bank is focusing on recoveries, and its ability to deliver here is key, else estimates for FY17 may see downsides,” said CLSA.

Titan: CLSA retained its ‘sell’ rating on the company’s stock with a target price of Rs 300. The brokerage firm said that the company has faced multiple headwinds on regulations as well as on demand environment and that some of these would likely continue in the near term. Final rate under Goods and Services Tax remains a very important event to watch out for, said CLSA.

The government has not yet firmed up the rate but it could be more than the current rate of 2%, it said. Commenting on the second quarter results of Titan, CLSA said that the company reported lacklustre revenues in the September quarter and the EBITDA which rose 42% from the same period a year ago was just in line with expectation.

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