The global brokerage house highlighted that this is the second time RBI had to point out NPL to the bank. Further, it said that FY16/17 net earnings would have been down 28.4% & 43.8% post adjusting divergence. It also continues to expect a sharp increase in gross NPAs going ahead.Brokerage: Macquarie | Rating: Downgrade to neutral | Target: Rs 362
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Macquarie said that the trust deficit widened for the bank and successive large divergences on NPLs undermine transparency of disclosures. It also highlighted that the bank has chosen to stick to its credit cost guidance of 50-70 basis points. Further, it said that no exposure to JSPL, sufficient realty collateral vs a/cs sold to ARC are small positives.Brokerage: Credit Suisse | Rating: Neutral | Target: Lowered to Rs 321Credit Suisse reduced EPS & target price by over 3% as it is building in higher credit costs. Further, the multiples likely to remain capped given recurring variances in reported NPLs.Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 382Motilal Oswal said that the repeated occurrence of divergence is a clear setback. However, a strong resolution capability will give it comfort. It expects 25 percent earnings CAGR over FY17-20.Brokerage: Axis Cap | Rating: Buy | Target: Rs 365Axis Cap also said that the asset quality divergence remains a key challenge for the bank. The core operating performance is strong, and is gaining market share with better retail penetration.Brokerage: BNP Paribas | Rating: Hold | Target: Rs 285The research firm said as divergence issue persists, investor focus will return to asset quality. A potential de-rating will start discounting growth multiple for bank. Further, it said that the growth momentum was strong and the focus on retail continues. The upside has now been limited due to asset quality concerns, it said.Jubilant FoodworksBrokerage: Edelweiss Fin | Rating: Hold | Target: Raised to Rs 1,842The brokerage said that unchanging consumer sentiment & new store additions to be key monitorables and it expects mid to high-teen same-store-sales growth aided by low base. The operating margin could boost 436 basis points year on year in FY18.Brokerage: Macquarie | Rating: Outperform | Target: Raised to Rs 2,005Macquarie said that strong Q2 is a testimony to some right steps on demand & profitability fronts. In fact, it has increased FY17-20 operating profit estimates by 3-8 percent. While it is the top pick in consumer discretionary space, higher SSSG growth is a key catalyst for the stock.Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 1,900The global research firm believes that strong margin expansion is likely to be sustained. It also raised estimates by 11-14 percent as it incorporates strong Q2 operating performance. It is projecting over 65 percent EPS CAGR for FY17-20.United SpiritsBrokerage: Morgan Stanley | Rating: Overweight | Target: Rs 2,900The broking firm said that strong Q2 was seen in a difficult operating environment. Further clarity on highway liquor ban and GST should drive stock closer to its target.Brokerage: UBS | Rating: Sell | Target: Rs 2,000UBS said that staff cost reduction & debt repayment drove profitability. Key due competition launches may stall share momentum seen in FY16/17 and is assuming a long term ROIC of 20 percent.