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3 Stocks That Featured On Brokerages’ Radar

UBS initiates on Reliance Industries at ‘Sell’, with a target price of Rs 870 and a downside of 8.3 percent.



A sculpture of a bull stands as an electronic ticker board displays stock prices overhead at the Shenzhen Stock Exchange in Shenzhen, China. (Photographer: Qilai Shen/Bloomberg)
A sculpture of a bull stands as an electronic ticker board displays stock prices overhead at the Shenzhen Stock Exchange in Shenzhen, China. (Photographer: Qilai Shen/Bloomberg)

Mumbai-based Aarti Drugs Ltd., the country's largest shipbuilder Cochin Shipyard Ltd., software services provider Perisistent Systems Ltd. and internet company Info Edge India Ltd. were on brokerages radar this week.

Here’s what the brokerages had to say on these stocks:

Centrum On Aarti Drugs

  • Initiated ‘Buy’ with a target price of Rs 940 and an upside potential of 24.6 percent.
  • Aarti Drugs is a leading domestic player of active pharmaceutical ingredients.
  • Positives: good growth of existing products, new product launches and over 75 percent utilisation.
  • Aarti Drugs is profit-making, dividend paying company poised for good growth.
  • See strong scope for re-rating.
  • Expect to perform well due to growth across geographies and economies of scale.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 14 percent, 15 percent and 19 percent, respectively, over the financial years through March 2020.
  • To benefit from its presence over the entire pharma value chain.
  • Expect company to generate healthy return ratios in future.
  • Outperform peers’ due to its efficacious presence in the domestic and emerging markets.

JM Financial On Cochin Shipyard

  • Initiated ‘Buy’ with a target price of Rs 700 and an upside potential of 25.7 percent.
  • Indomitable player in the Indian shipyard industry.
  • Large dock size and strategic location place Cochin Shipyard in sweet spot.
  • Investing in both capacity and capability to the pave way for the next leg of growth.
  • Government policies to enable sustained flow of orders.
  • Outpaced peers in a shrinking industry.
  • Defence, inland waterways and O&G to offer next leg of growth.
  • Robust order book provides revenue visibility over next eight years.
  • Expect order inflow momentum to sustain as Navy orders jump three times over the next decade.
  • Healthy cash flows and a negative working capital cycle to keep company debt free.
  • Expect revenue and operating income to grow at a compounded rate of 18 percent over the financial years through March 2020.
  • Expect dividend payout to be 25 percent in coming years.

IIFL On Persistent Systems

  • Initiated ‘Add’ with a price target of Rs 835 and an upside of 11.9 percent.
  • Persistent is in middle of an investment phase.
  • Continuous investments to keep margin expansion under check.
  • Digital to drive growth, Alliance and Accelerite pose upside risks.
  • Expect $ Revenue and earnings per share to grow at a compounded rate of 10.5 percent and 11 percent respectively over the financial years through March 2020.
  • Remain positive on long-term story
  • Believe that investments made are in the right direction.
  • Market is already pricing in significant margin expansion.
  • Valuations fair but rerating may take time.
  • Earnings upgrade cycle may take time to kick in.

UBS On Info Edge

  • Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 1,370 from Rs 1,500
  • The stock has currently traded around Rs 1,362.3 levels.
  • Believe positive market expectations have already driven the stock higher.
  • Current valuation appears full.
  • Believe market is pricing in an accelerated earnings trajectory for Naukri and undermining risk.
  • Expect 15-16 percent/18-20 revenue compounded annual growth rate over near to medium term.
  • Expect increase in advertisement to limit margin expansion.
  • Expect strong delivery and subscription revenue growth at a compounded rate of 50 percent over the financial years through March 2020 for Zomato.
  • Expect a $50-100 million fund-raising by Zomato at a valuation of about $1.5 billion.