Analyst Calls: Dish TV, ONGC, Mphasis, Future Retail

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The domestic stock market on Tuesday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 32 points lower this morning, signalling a weak start for Dalal Street.

As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks.

• IDFC Securities has a neutral rating on Dish TVNSE 2.76 % India with a target price of Rs 19. Dish TV’s Q2 performance was far weaker than anticipated, but business should gradually pickup from third quarter onwards. Ebbing competitive intensity in the South is a relief but the weak economic conditions, especially in Dish TV’s target markets and the rising popularity of DD FreeDish again, said IDFC Securities. Dish TV’s promoter group liquidity concerns and their legal tussle with the erstwhile VD2H promoters would continue to remain a overhang on the performance, the brokerage said. The stock ended up 7 per cent at Rs 14.5 on Monday.

• CLSA has maintained buy rating on ONGCNSE -0.63 % and lowered target price to Rs 225 from Rs 240. CLSA expects more government action to fully eliminate kerosene subsidises and notably cut LPG subsidies. Action on this as well as increasing confidence in a rising share of the non-subsidylinked value from its KG offshore and Mozambique blocks could trigger the stock to double in less than three years, it said. The stock ended down 1.2 per cent at Rs 133.90 on Monday.

• Investec Securities has maintained buy rating on Mphasis and revised target price to Rs 1060 from Rs 1050. Mphasis reported revenues at $305 million, in-line with estimates, and EBIT percentage at 16.1 per cent, 25 bps below estimates, said Investec. Mphasis is trading at 13.5 times FY21 estimated EPS and is the only midcap stock with a high yield on payouts of 7 per cent , which restricts downside risks. said Investec. The stock ended up 1.5 per cent at Rs 922.20 on Monday.

• CIMB Securities has initiated coverage on Balkrishna Industries with an add rating and target price of Rs 998. The brokerage has initiated coverage given its superior return on capital employed, high operating profit margin and strong sales volume growth compared to global and domestic peers. The brokerage estimates an EPS CAGR of 15 per cent over FY21-22, higher than its 12 per cent EPS CAGR over the last 3 years. The stock ended down 1.6 per cent at Rs 849 on Monday.

• Morgan Stanley has maintained overweight rating on Future RetailNSE -1.66 % and lowered target price to Rs 540 from Rs 660. Second quarter earnings were in line but a sharp rise in debt was a key negative, said Morgan Stanley. The brokerage has cut FY20 earnings estimate by 8.5 per cent following moderation in same-store-sales growth and sharp increase in debt in first half of FY20. The brokerage has raised earnings estimates for FY21 and FY22 by around 1 per cent each to incorporate the recent cut in corporate tax rates. The stock ended up 0.3 per cent at Rs 331.60 on Monday.