against Paris: in search of the winners of D-Street? Even latecomers can make the cut

Keep your eyes and ears open. Chances are, you could just spot some big winners on Dalal Street. And take this, they can even be of the lot that has hung up here reference cues!

Look at Morgan Stanley, who recently added three underperformances from different sectors to his portfolio. The global broker suddenly took a liking to India's largest bank, the State Bank of India (SBI), which has almost doubled investor money over the last decade, while the Sensex benchmark has grown by more than 180 %.

The first super specialty hospital, Apollo Hospitals and Prestige Estates are two of Morgan Stanley's other favorites after the latest correction.

For the shortlist, the world's third-largest wealth management company in terms of total client assets focused on equities that have underperformed the market over the past 12 months and have weak economic fundamentals. deviation from the mean. The outlook for these companies now looks solid in terms of earnings growth and earnings growth, Morgan Stanley said.

"We are choosing stocks overweighted by Morgan Stanley and where our analysts expect a positive change in return on equity, with EPS growth exceeding 10% over the next two years," Morgan Stanley said in a report. . .

The SBI stock rose 6% in the last 12 months up to September 14, while the BSE Sensex benchmark rose 18%.

Morgan Stanley believes that the government's recapitalization has allowed SOEs to recognize problematic corporate loans as non-performing loans and to increase funding.

"We expect an improvement in the overall allowance and bad debt slippage over the second half of fiscal year 19 (H2FY19). However, loan loss charges are expected to remain elevated, with banks assuming 60% coverage with the launch of Ind-AS as of April 1, 2019 (our baseline scenario). Growth in operating profit before provision (Core PPP) is expected to start from H2FY19, as NPL formation slows and higher rates favor margin expansion. Given its strong franchise and technology, SBI is better positioned than other state-owned banks to support growth and ROE, "added Morgan Stanley.

In August, Japanese broker Nomura awarded SBI a "buy" rating with a target price of Rs. 360. "Evaluations at 0.9 times are not easy. We maintain a purchase rating as the business cycle and the core PPOP improve, "Nomura said.

The public lender suffered a substantial loss of Rs 4.876 billion for the first quarter up to June, due to higher provisions for accumulating non-performing assets (NPA) or bad debts. In a stock exchange, SBI reported net profit of Rs. 2,005.5 billion for the same period last year.

The shares of Prestige Estates and Apollo Hospital increased by 9% and 5% respectively during the period.

Prestige Estates has a balanced portfolio of development and leasing projects, both of which have good potential for large-scale development. The presence in the healthy cities of southern India (Bangalore, Chennai and Hyderabad) will be complemented by a diversification of the NCR and MMR markets. "The valuations look reasonable, with a 51% haircut relative to our March 2019 net asset value," added Morgan Stanley.

The company is also seeking to acquire shopping centers in major cities to expand its rental income base.

In the case of Apollo hospitals, Morgan Staley estimates that the evaluations seem inexpensive at 15×20 F / EV. The operational improvement over the coming quarters would be driven by the three revenue segments, including hospitals, the steady growth of self-contained pharmacies and the reduction in AHLL retail sales losses, the objective being to reach the first half of 2020.

Apollo Hospitals is also one of the top choices of IDFC Securities. In a report released in August, the brokerage firm maintained the "Outperformer" rating on Apollo at a target price of Rs 1,483.

The national brokerage also said that a leadership position, a national footprint and a multi-faceted health care delivery model make Apollo one of the health care models the more efficient.

"After a phase of weak and prolonged results resulting from an aggressive expansion plan, earnings recovery is visible from the second half of fiscal 2016, thanks to the improvement in the profitability of mature hospitals. The new hospital cluster has begun to make a positive contribution, notably thanks to the improvement of the Navi Mumbai unit. While the ASAP business will support the growth momentum, the reduction of operating losses on the retail health platform should also foster consolidated profitability growth, "said IDFC Securities in a report.

Morgan Stanley increased its Sensex target price to 42,000 for September 2019 from 36,000 in June.

Asian Paints, ICICI Bank, ITC, M & M Financial and UltraTech Cement are other underachievers who made their way to Morgan Stanley's list.

Motilal Oswal Financial Services was awarded the "Buy" rating on ICICI Bank with a target price of Rs. 355, while it launched a "neutral" call on Asian paintings with a target of Rs 1,405.

Brokerage JM Financial is supportive of M & M Financial with a target of Rs 650. "We expect a compound annual growth rate of 53% over FY20-20E, at 2.9%, respectively. and 19% F20E.