Buy, Sell, Hold: Here are 6 stocks that are being tracked by analysts today.

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 242

profitstreetThe global research firm said that the company’s Q4 beat and new launches will drive growth going forward. It observed that it has a balanced portfolio of rental and development projects with good scale up potentials. The margin too is expanding on the back of cost reductions and sales recovery, but the debt may increase marginally to 1.15 times from 1.11 times in FY17. Key risks to the stock include blocked capital in hotel assets and stretched balance sheet.

Brokerage: CLSA | Rating: Buy | Target: Rs 318

The brokerage observed that the company’s results were above estimates on better revenues. It said that the leasing build-out was steady and expects 20 percent lease income growth in FY18. Furthermore, it said that restructuring was nearing completion stage as well.

United Spirits

Brokerage: Macquarie | Rating: Underperform | Target: Rs 1,600

The brokerage firm observed that March quarter’s gross margin and EBITDA margin were boosted by 200 basis points (bps) and 60 bps. There was minimum damage as there was no de-stocking in the given quarter, it observed. Having said that, it also sees significant downside risks to FY18 and FY19 consensus earnings.A significantly lower level of advertising and promotion spends is not sustainable, it added. On its cash flow, Macquarie said that free cash flow generation remained weak at USD 1.1 billion on higher working capital.The implementation of goods and services tax (GST) wll be inflationary for inputs, despite no inclusion of extra neutral alcohol. The margin pressure in this regime will be a key catalyst for the stock, it said.

Max Financial

Brokerage: CLSA | Rating: Buy | Target: Rs 700

CLSA said that the previous fiscal was a good year for the company with 27 percent growth in premiums. It observed that demonetisation helped growth in premiums. Over FY17-20, it sees 17% CAGR in premiums with stable value of new business (VNB)
margins.

Apollo Hospitals

Brokerage: CLSA | Rating: Buy | Target: Rs 1,480

Weaker than expected margins led to a significant miss on EBITDA, it said. Further, moderate margin assumptions lead to 8-11% earnings cut

Thermax

Brokerage: Deutsche Bank | Rating: Sell | Target: Rs 850

The sell rating was on the basis of weak orders, write off of boiler and weak sentiment in China and first energy business. Absence of large orders is hurting growth, which may return in late FY18.

Brokerage: Goldman Sachs | Rating: Neutral | Target: Rs 940

The brokerage observed that the results were above expectations, but visibility for the power segment was low. It expects ordering from consumption-driven segments to continue. It also saw some potential for environment-related orders from cement or power. An uptick in selective segments should help improve order inflow, it added. A decline in order book and slower execution were the key risks.

Castrol

Brokerage: CIMB | Rating: Add | Target: Rs 490

The brokerage observed that its net profit was in line with estimates. The volumes were flat, but above industry average. Stock valuation is likely to be influenced more by volume growth, it added. CIMB further said that there was tremendous scope for management to use pricing/margins to gain volumes.
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