3 Stocks Rated New ‘Buy’ At Brokerages

The bond bulls are in charge. (Photographer: Michael Nagle)

Brokerage houses initiated coverage on three stocks with a ‘Buy' rating. They are information technologies firms Larsen & Toubro Infotech Ltd., Zensar Technologies Ltd., and fertilizer maker Deepak Nitrite Ltd.

Among these three firms, L&T Infotech and Deepak Nitrite got their highest target prices.

Here's what the analysts had to say:

Initiated ‘Buy' with target price of Rs 1,300, implying a potential upside of 16.7 percent from yesterday's close.
Larsen & Toubro Infotech has all the ingredients of being a sustainable growth engines.
Strong presence in high growth digital solutions.
Expect Larsen & Toubro Infotech to continue to outperform the sector.
Likely to become more aggressive than before; to be most feared competitor.
Momentum across – large clients, large deal wins, large deal pipeline to continue.
Expect revenue in dollar terms and earnings per share to grow at a compounded annual growth rate of 14 percent and 13 percent, respectively over the financial years through March 2020.
Strong growth performance warrants premium valuation.

Initiated ‘Buy' with target price of Rs 1,000, implying a potential upside of 13.6 percent from yesterday's close.
Increasing proportion of revenues from Digital SBU coupled with deal wins to revive revenue growth trajectory.
Expect gradual recovery on the margin front.
Revival in growth to drive selling, general and administrative expenses leverage and margin expansion over the financial years through March 2020.
Strong expertise in Oracle offerings remains the key proposition.
Zensar now positioned to address complete value chain in retail e-commerce
Earnings per share estimates for the current and next two financial years are at Rs 52, Rs 65 and Rs 80, respectively.
Dollar revenue growth for the current and next two financial years estimated at 3.7 percent, 10.3 percent and 11 percent, respectively.
Valuations remain reasonable; Room for re-rating over two-year period.

Initiated ‘Buy' with a target price of Rs 360, implying a potential upside of 31 percent from yesterday's close.
New plant to revitalise business dynamics from April 2019 onwards
Positives: improving product mix, efficiency to drive performance products business.
Company set to reap benefits of capacities as well as performance products
Expect spectacular revenue and margin spurt with higher utilisation levels and business expansion
Revenue is expected to double and margins quadruple; Net profit to grow at a compounded rate of 38 percent over the financial years through March 2020.
Debt funded capex to generate healthy returns.
Debt-to-equity expected to soar two times; return on capital employed to expand to 17 percent by March 2020.
Free cash flows from April 2019 with scope for forward integration.
Low valuations for a strong cash flow generating business.
Bull case price target of Rs 414.