Fundamentals: Why you should sell HeroMoto, buy HT Media

Here’s a list of stock recommendations by various analysts/ brokerage houses

•Kotak Securities has an accumulate rating on HT Media with a price target of Rs 115 per share vs its current price of Rs 101.55 per share, reflecting a growth of 14 percent. While a lot of negative factors like lack of visibility in the non-newspaper business and challenging environment in the newspaper business have resulted in the under performance of the stock, Kotak says that the company is taking steps to contain decline in earnings/ improve visibility of profits.

Also, its idea of planning to raise subscription rates in Mumbai should augur well for the company. In addition, the company believes that shine.com, the job portal operated by HT Media is likely to show improved performance in the second half of the year due to a more active resume database.

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 •IIFL is bearish on Coromandel International with a price target of 270 per share. It is currently trading at Rs 275. While the company’s profit margins increased sharply in the fertiliser division last year, the non-subsidy business reported a disappointing performance and posted a decline in profits.

IIFL says that this worries them as the company’s profit growth has become increasingly dependent on continued margin expansion in fertilisers. While the company remains the most expensive fertiliser stock, it is expected to report a 58 percent year-on-year decline in profits.

•IDBI Capital has a reduce rating on HeroMotocorp with a price target of Rs 1,946 per share. The stock is trading at Rs 2,118 per share. While the company management expects demand to pick up only in the festive season, a lot will depend on a normal monsoon as agricultural productivity boost will play a huge role in boosting farm incomes and the overall sentiment.

Second, inventory has started to pile up but there are no talks of a discount, third, the price hike taken in May is not enough to offset the surge in raw material costs because of a weak rupee. Overall, the increase aggression by Honda Motors (HMSI) will have a far more adverse impact on Hero Motocorp than Bajaj Auto.