A girl counts the hits she has made on a target while practicing archery. (Photographer: Adeel Halim/Bloomberg News)

Analysts Cut Price Targets For Over 50% Of India Stocks In August

Analysts lowered their target prices for more than half of the stocks last month even as the Nifty 50 Index posted its best August since 2014.

Target prices were cut for 51.5 percent of the 406 stocks tracked by at least five analysts, according to Bloomberg data. Analysts raised the forecasts for 40.4 percent stocks, while estimates for 8.1 percent remained unchanged.

Even though the NSE Nifty 50 Index gained nearly 3 percent in August, the benchmark entered September on a tepid note. The Nifty Index declined over 2 percent in the first three trading sessions this month, led by a 1.5 percent gain in Nifty IT Index. The Nifty PSU Bank Index, the Nifty FMCG Index and the Nifty MNC Index are the biggest losers, each declining over 4 percent during the period.

Sectoral Snapshot

Price targets were upgraded for only three of the 10 sectors—the most for consumer staples. Estimates for industrials were lowered the most, the Bloomberg data showed.

Credit Suisse lowered the weight of consumer staples by 1.5 percentage points citing valuation concerns, according to a research report. The utilities sector is trading at a record discount, the report said.

Also read: Consumer Stocks Trade At Hard To Digest Valuations

Stock Upgrades

Here’s a snapshot of the top upgrades

  • Orient Refractories: Dalmia Securities expects operating revenue to compound at 10 percent over financial years 2018-20.
  • Vinati Organics: Edelweiss Investment Research said medium-term growth outlook for the company remains strong, driven by improved demand for core products.
  • Dabur India: JPMorgan said the company is likely to benefit from rising consumer bias towards natural or herbal products.
  • Graphite India: The management is confident of passing on cost pressure, according to Macquarie’s research report.
  • Page Industries: ICICI Direct expects the company’s net profit to compound at 30 percent and revenue at 22 percent from financial years 2018-20.
Analysts Cut Price Targets For Over 50% Of India Stocks In August

Stock Downgrades

Here’s a snapshot of the top downgrades

  • Asian Granito: The company reported a weak June quarter led by subdued realisation and higher gas prices, according to Reliance Securities Research.
  • Hathway Cable and Datacom: The company reported a weak June quarter as subscriber base declined by 30,000 and average revenue per user dropped nearly 3 percent, according to SBICAP Securities.
  • VST Tillers and Tractors: The company faces headwinds in terms of sales and volume growth, said ICICI Direct.
  • Jet Airways: SBICAP Securities expects rising competition and cost pressure to continue.
  • Skipper: Dolat Capital downgraded to ‘Sell’ due to pricing pressure.
Analysts Cut Price Targets For Over 50% Of India Stocks In August

Also read: Analysts Lower Earnings Estimates For Three Out Of Every Five Companies