INSUBCONTINENT EXCLUSIVE:
Brokerages have slashed target prices on shares of companies across sectors to reflect the cut in their earnings estimates amid the
wide-scale shutdown in businesses in the wake of the spreading Covid-19 pandemic.
Notable cuts in target prices have taken place in auto,
auto ancillaries and diagnostics companies.
Active Covid-19 cases in India have surpassed 400 and over 3.5 lakh cases world-wide, impacting
both domestic and overseas businesses of companies.
Last week, HSBC downgraded ONGC and Oil India to hold and cut target prices on them by
50-53% as earnings outlook materially deteriorated amid the sharp fall in both oil and natural gas prices.
HSBC also cut earnings per share
(EPS) estimates for ONGC by 4-45% and by 3-41% for Oil India.
The firm has also estimated 4-6% decline in US dollar revenue forecasts for IT
companies in the ongoing financial year, driven by Covid-19 impact and fears of a structural impact on demand environment in the US and
Europe.
Fast-moving electrical goods and consumer durables company Havells has also borne the brunt of target price cuts, by CLSA as well as
by 17% to Rs 540.
Brokerages also expect travel restrictions to impact Apollo Hospitals Enterprises due to lower volumes of high-margin
international patients and elective surgeries in the short term
CLSA has trimmed target price on the stock by 12% to Rs 1,850.
Motilal Oswal has cut consolidated EPS estimates on Endurance Technologies by
on companies which operate malls, multiplexes and run airlines.
Kotak Institutional Equities said lower crude oil prices may not be enough
to blunt the impact of Covid-19 situation
The brokerage has a sell-rating on InterGlobe with a fair value of Rs 900.
Analysts believe earnings downgrades are set to continue with
uncertainty looming over the extent of impact of shutdowns on various sectors.
