Should you buy, sell or hold Infosys, ITC, Federal Bank, CEAT, M&M, ICICI Bank, auto and banking shares?

Global brokerages gave their view on the Auto and Banking sector along with other key stocks such as Infosys, ITC, and Federal Bank on Wednesday, March 1, 2023. CLSA has maintained mixed ratings on Auto stocks, wherein it has upgraded Mahindra & Mahindra to ‘buy’ from ‘outperform’.

Similarly, Morgan Stanley has an ‘overweight’ call on the overall banking sector, while it prefers ICICI Bank, Axis Bank, and Bank of India among others. While they are upbeat on Infosys, ITC, and Dr Lal Pathlabs, and maintained a ‘neutral’ call on tyre maker CEAT.

Check out the ratings and target prices assigned to these stocks/sectors on March 1:

CLSA on Auto

The global brokerage firm CLSA has maintained a ‘buy’ rating on Tata Motors, Bajaj Auto, and Eicher Motors; it has a 'sell' call on Maruti Suzuki and TVS Motor, while a ‘reduce’ rating on Hero MotoCorp ahead of auto companies releasing their February auto sales numbers on Wednesday.

Being bullish on M&M, CLSA upgraded Mahindra and Mahindra (M&M) to ‘buy’ from ‘outperform’ rating amid strong momentum across farm and auto businesses, besides, consolidated return on equity (RoE) to improve to 17 per cent in FY24, the brokerage mentioned.

Infosys

CITI maintained a ‘buy’ call on IT major Infosys with a target price of Rs 1,665 apiece. The brokerage said the client budgeting cycle is underway and sees tailwinds for margins going forward. Infosys is currently trading at ~23x 1-year consensus EPS, CITI said in its report.

ITC

Credit Suisse has an ‘outperform’ rating on ITC – a cigarette-to-hotel conglomerate – with a target price of Rs 445 per share on the stock.

Federal Bank

A day after the private lender’s meeting with analysts, global brokerages are upbeat on the stock. Morgan Stanley maintains an ‘overweight’ rating, while UBS maintained a ‘neutral’ call and CITI has a ‘buy’ stance on the bank.

Improving loan mix towards higher-margin assets will be the key focus over the next 3 years for Federal Bank, Morgan Stanley said in its comment. While UBS said that the management is optimistic about key business drivers as well as reaffirmed net interest margin (NIM) and return on asset (RoA) guidance.

Dr Lal Path Labs

UBS maintained a ‘buy’ rating on Dr Lal Path Labs with a target of Rs 2,600 per share. It said low pricing power has been a key concern for listed diagnostic names.

CEAT

Nomura has given a ‘neutral’ rating on CEAT with a target of Rs 1,617 per share. The brokerage said that the commodity tailwinds and declining capex intensity should drive return on equity (RoE) to 12-13 per cent over FY24-25F, it expects volume growth momentum is likely to remain subdued.

Morgan Stanley on Banks

Morgan Stanley said the bank stocks were down 0.6 per cent in February as compared to a 0.12 per cent fall in the BSE Sensex. The brokerage stays ‘overweight’ on banks with access to retail deposits, it prefers ICICI Bank, Axis Bank, Bank of India, and Federal Bank from the banking space.

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