The Biggest Target Price Downgrades And Upgrades So Far This Year

Analysts lowered target prices for more than half of the stocks since the start of the year as India remains the only major Asian market to fall in 2019.

Target prices were lowered for 54 percent of the 246 stocks tracked by at least 10 analysts, according to data from Bloomberg. Price downgrades were led by industrials.

By contrast, analysts raised the forecasts for 45.5 percent stocks led by consumer staples and financials. Estimate remained unchanged for one company.

India’s benchmark Nifty 50 has fallen 2 percent so far this as more than two-thirds of the stocks have recorded losses. That compares with gains by major peers in Asia, led by Shanghai Composite’s 12.4 percent rise. The fall is steeper in India’s broader market with Nifty Midcap 100 and Smallcap 100 down more than 10 percent.

“Nifty is showing signs of decoupling with the U.S. market,” said Umesh Mehta, head of research at Samco Securities Ltd. “Such decoupling is good in the long term but the bears have tightened their grip on the market as of now,” he said, adding that there has been no respite as selloff resumed after the upswings.

Sector Snapshot

Price target revision was equally split among the 10 sectors — upgrades and downgrades for five each, according to Bloomberg data.

Dish TV India Ltd. saw the biggest cut in target price followed by Vedanta Ltd.

Dish TV: Edelweiss Securities expects it to underperform due to the risk of disruption from Reliance Jio Infocomm Ltd., traction for streaming services and the regulator allowing users to create their own channel bouquets.

Vedanta: Brokerages turned cautious as the company’s decision to buy interest in Anglo American Plc from group promoter Anil Agarwal’s family trust sparked corporate governance concerns.

Orient Cement: It reported the worst earnings among peers largely due to weak prices. Overcapacity in the south impacts the nearby region of Maharashtra as well, according to Kotak Securities.

SAIL: Steel price correction will hurt net debt-to-ebitda ratio, according to Citi.

Ashok Leyland: Medium and heavy truck sales expected to peak the next fiscal starting April and then decline, according to Jefferies. The brokerage doesn’t see a significant gain in market share as Tata Motors Ltd. has turned competitive. And light truck sales, exports and defence orders not enough to offset that impact, Jefferies said.

Meanwhile, Interglobe Aviation Ltd., the operator of India’s largest airline IndiGo, saw the biggest upgrade in target price.

InterGlobe Aviation: Morgan Stanley expects the carrier to go back to reporting profits aided by strengthening yields, softer crude and better margins.

Kajaria Ceramics: Edelweiss Securities is bullish given the sustained market share gains aided by robust volume growth and margin expansion, led by fall in gas prices and long-term demand.

Bata India: ICICI Direct says the footwear retailer’s enhanced focus on fast-growing categories such as sports, youth and women and the swift pace of store additions will help. Cost cuts and increase in share of premium products from about 30 percent will aid earnings.

Manappuram Finance: Edelweiss Securities cited better-than-expected net interest margin, higher revenue and stable asset quality, and expanding other business for its optimism.

TTK Prestige: ICICI Direct listed growth drivers as enhanced capacity, schemes like Ujjwala Yojana that will perk up revenue share from rural areas, and expanding cleaning appliances business.