In the case of SBI, CLSA expects a return on equity (RoE) of over 15%. It said SBI’s existing valuations were unexpected, adding that SBI was one of its top picks in the banking sector. Credit cost undershoot continues, it said, adding that management has directed for improvement in net interest margin (NIM). The stock of the brokerage has a target of Rs 660.
At Eicher Motors, CLSA’s target is Rs 3,089. Eicher Motors is the top pick in the two-wheeler segment, as Royal Enfield’s domestic demand grows as production numbers improve. Pricing is strong and demand is returning, it said, operating leverage VECV will restore a margin in the business.
The VECV or VE commercial vehicle is a joint venture between the Volvo Group and Eicher Motors.
Meanwhile, UBS has a target of Rs 1,260 crore for Tech Mahindra as margins missed its estimates while in the fourth quarter earnings line. The margin was lower than expected compared to the consensus estimate, it said. The brokerage expects a downward consensus earnings correction and expects the stock to perform less in the near term.