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JP Morgan’s buyout on Tata Steel continues; MS loves this underperforming sector

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New Delhi: Domestic steel stocks have underperformed global peers in the recent past, with banks largely underperforming the BSE benchmark Sensex in the past two years. If foreign brokerage firms are to be believed, then two underperforming sectors can perform well in the coming times.

JP Morgan said domestic steel stocks have underperformed global peers by an average of 11-15 per cent over the past one to six months. The Ebitda per tonne for steel makers is likely to peak in the June quarter of FY22 and companies also faced coking coal price inflation. In such a situation, the margins of Indian steel companies have declined.

That said, JP Morgan said domestic steel demand is seasonally strong in the March and June quarters and remains a ‘buy’ on it.

1,850 with a target of Rs. It also likes SAIL and has a target of Rs 165 on the stock.

In the case of banks, Morgan Stanley The sector has an ‘overweight’ rating as it believes that 2022 pre-provisioning operating profit (PPoP) is a combination of growth acceleration and lower credit costs. This, it said, would be helped by higher credit growth and a turning point in the rate cycle.

Morgan Stanley said the balance sheet and profitability are much better than they are today. “Another big catalyst is the turn of the interest rate cycle, especially for large banks,” it said.

The brokerage has set a target of Rs 1,025 for ICICI Bank, Rs 2,050 for HDFC Bank, Rs 1,000 for Axis Bank and Rs 680 for SBI.

During this, nomura India maintained a ‘neutral’ stance on Mindtree with a target of Rs 4,744 as deal winnings remain muted. The development was done by smaller projects, it said.

Margin outperformance was a major highlight in the third quarter results. Strong execution fueled healthy revenue growth, while client metrics were tracking in the right direction, it added.

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Hassaan Minhas

Hassaan is a journalist at UsamaSpeaks.com and he deals with Latest News, India News, and Tech News. Hassaan is a very professional and authentic news journalist.

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