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Analyst Calls: Bandhan Bank, NHPC, Gail, Dr Reddy's Lab

Good morning!

The domestic stock market on Thursday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 29.50 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.



• JM Financial has maintained its buy rating on Bandhan Bank with a target price of Rs 710. The brokerage continues to like Bandhan for its strong track record on profitability, asset quality and efficiency. Bandhan has a strong growth runway and the Gruh merger gives it a much-need diversification while ensuring stability and compliments the business model, said the brokerage. Shares of Bandhan Bank declined 2 per cent to Rs 525.35 on Wednesday.

• Motilal Oswal has maintained its Neutral stance on NHPC
with a target price of Rs 25. The construction of lower Subansiri project has restarted from October, which is a positive for the company. However the regulated equity growth of NHPC, which has been key driver for earnings, will be muted for the next few years as no new projects are being commissioned. Shares of NHPC closed at Rs 23.5 apiece on Wednesday, up 0.86 per cent.


• Edelweiss Securities has maintained its Buy rating on Mahindra & Mahindra Financial Services with a target price of Rs 397. The company’s earnings for September quarter remained mixed with softer growth, lower net interest margins and steady asset quality. Edelweiss expects disbursements to witness to improve in the second half of FY20. Going forward, better monsoon and a seasonally strong second half of year portend well, but inherent volatility remains challenging. Shares of Mahindra & Mahindra Financial Services closed at Rs 330, up 0.7 per cent on Wednesday.

• Reliance Securities has maintained a Buy rating on Gail (India) with a target price of Rs 154. Gail posted improved volume performance in quarter ending September with natural gas transmission growing 7 per cent year-on-year. Also , Petrochemical facility utilisation touched a new high of 112 per cent in September quarter. However, Gail sold contracted LNG at lower price in spot market, for which its gas marketing margin fell during the quarter. Shares of Gail (India) closed 0.8 per cent lower at Rs 124 on Wednesday.

• SBI Cap Securities has upgraded Dr Reddy's Laboratories to Buy rating with a target price of Rs 3200. The brokerage said the company’s management has taken some major actions such as divestment of non-core assets, trimming of workforce, and rationalisation of research and development. These steps have improved margins and return ratios. However, adverse regulatory developments and continued high competition in US generics could pose challenges for the stock. Shares of Dr Reddy’s Laboratories closed at Rs 2828, up 3.1 per cent on Wednesday.

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