When foreign brokerage houses entered India, many investors felt that finally they would get an opportunity to have world class research reports. But the experience has been a painful one.
On June 29, 2011, Nomura Securites came out with a buy call on KS Oils with a target of Rs.45.KS Oils was trading around Rs.22 then.So the price target was a whopping 100% above the then prevailing price.Subsequently, the scandal about KS Oils broke and now it is trading at around Rs. 5 per share !
Now, you have the good people of Macquarie have put an Outperform rating on DLF with a price target of Rs.250. DLF is known for its opaque accounting practices and poor corporate governance issues.Veritas in it’s detailed report has put a price value of Rs.100 on the stock.What is interesting is that Macquarie had slammed HDFC for its accounting practices, but at the same time has given a clean chit to DLF for the same.
Can DLF hit 250 in the short term?Sure, in the Indian stock markets, anything is possible.But is it the kind of stock that one expects a reputed brokerage house to recommend for “investing”?Hell, no !!
Makes one wonder, what are these analysts smoking?