Top brokerage calls for September 6: CLSA upgrades PFC and REC to 'buy'; Citi maintains 'sell' call on TCS

SUMMARY

Indian shares are likely to open in the green on Friday, tracking positive cues from Asia, amid signs of easing US-China trade tensions and firm US economic data. Among brokerages, CLSA upgraded PFC and REC to 'buy' from 'sell' and Citi is bearish on TCS. Here are the top brokerage calls for Friday:

By CNBC-TV18Sept 6, 2019 8:14:51 AM IST (Published)

CLSA on PFC and REC: The brokerage upgraded its rating for both the stocks to 'buy' from 'sell'. The target for PFC is raised to Rs 150 from Rs 120 and for REC to Rs 180 from Rs 160 per share. Both companies are largely done with NPL recognition in the private sector, the brokerage said, adding that earnings rebound will begin in FY21 once companies build coverage of 50-60 percent of NPLs.

Nomura on Axis Bank: The brokerage maintained a 'buy' call on the stock but cut its target to Rs 875 per share from Rs 900 earlier. It expects a return on equity of 16-17 percent over FY21-22, with a normalised credit cost of 100 bps. Market expectations from new management look more reasonable now, it added.

Credit Suisse on JSW Steel: The brokerage has an 'outperform' call on the stock but cut its target to Rs 288 per share from Rs 300 earlier.

Citi on TCS: The brokerage has a 'sell' call on the stock with a target of Rs 1,970 per share. Demand may be impacted in FY20 given weakness in traditional spend, the brokerage said, adding that the management maintained FY20 margin aspiration range of 26-28 percent. High valuation/expectations are key reasons for a 'sell' rating, the brokerage explained.

Credit Suisse on Reliance Industries: The brokerage has a 'neutral' call on the stock with a target of Rs 1,210 per share. Jio's entry-level broadband pricing is competitive and it announced no combo plans with cable and mobile, the brokerage said, adding that broadband service will contribute $1.2 billion EBITDA to consolidated operations if it achieves the 20 million user target.

CLSA on IT Stocks: The brokerage has a 'buy' call on HCL Tech, TCS, and Infosys. Except for HCL Tech, most tier-1 companies are above the midpoint of their 5-year PE range, the brokerage said, adding that HCL Tech and Infosys offer the most value and TCS offers momentum.