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NTPC Target Price : Rs 200 Upside: 22 percent Reasons: The company is reducing its costs and gaining market share in a weak market and is better prepared when the market picks up. With Coal India – the agreement to supply higher domestic coal, eliminate costlier imports and improved coal quality is a positive – leading to a cut in fuel cost over the last year, despite price rise.
Shree Cement Target Price : Rs 18450 Upside:29 percent Reasons: It remains the cost leader in the Indian cement industry by a large margin (15 percent lower than the nearest competitor). The valuation on current production does not appear to build in any upside from the company's strong operating leverage (given capacity utilization of around 62 percent in FY18) or any major upside from an upcycle.
State Bank of India Target Price: Rs 315 Upside: 28 percent Reasons: SBI is likely to be key beneficiary of demonetisation. It is a leader in credit cards, debit cards, digital products and has a disproportionate share in rural lending and government business. Worst of NPL recognition and credit costs are behind – slippages were at 3.4 percent and credit costs at 2.1 percent in 2QFY17, and should gradually decline
Tata Motors Target Price : Rs 575 Upside: 15 percent Reasons: Global luxury volumes are expected to improve over the next three to six months, driven by new launches in the SUV portfolio. Expect the GBP depreciation to start positively affecting margins from Q4FY17 onwards. A 10 percent depreciation in the GBP/USD leads to a 15-20 percent increase in TAMO’s EPS after a lag of three to four quarters.
TCS Target Price : Rs 2900 Upside: 27 percent Reasons: Rupee depreciation should further air revenue growth and margins TCS may deliver sector-leading USD revenue CAGR of 12.6 percent in FY17-19.
Tech Mahindra Target Price : Rs 680 Upside: 45 percent Reasons: Backed by improvement in deal wins – particularly in the hitherto underperforming telecom vertical, the company is poised to deliver a strong performance in 2HFY17.
Vedanta Target Price : Rs 277 Upside: 20 percent Reasons: Improving visibility on the Cairn-Vedanta merger, which should help resolve the long-pending cash fungibility issues for Vedanta Ltd, support deleveraging and also simplify the corporate structure. Merger with Cairn India should help improve capital allocation efficiency across the various group entities, with better alignment of the promoter interest with that of the minorities.
YES Bank Target : Rs 1450 Upside: 16 percent Reasons: It is the biggest beneficiary of an easy liquidity environment; we expect Yes to be amongst the very few banks wherein NIMs would improve. Loan growth at 38 percent remains much higher than the industry average. This will moderate but will still remain strong at 25 percent
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