Banks    
SECTOR | 28 May 2020, 12:06PM
HDFC Securities
Banks' core spreads and NIMs are likely to compress in the near term. Our stance is premised on the following, (1) faster growth in high yielding segments which supported WALR (o/s) is likely to slow, this may be inferred from by the sharp dip in WALR (fresh) which has dipped sharply in Mar-20, (2) the effects of lower MCLRs will become more pronounced, (3) external benchmark-linked loans will see a significant fall in yields and a gradual rise in share and (4) slower re-pricing of liabilities will limit benefits of lower TD rates although, SA rate cuts will provide some cushion here. Over FY20 so far, weve seen divergent NIM trends, but most of our coverage banks saw NIM improve. The drivers of movement on either sides, however, varied vastly.
HDFC Securities released a Sector Update report for Banks on 28 May, 2020.
Aditya Birla Fashion and Retail Ltd.    
28 May 2020, 08:22AM
120.50
1.86%
HDFC Securities
We downgrade ABFRL to an ADD (Earlier BUY) with a DCF-based TP of Rs. 120/sh (earlier Rs. 180/sh) -implying 23x FY22 EV/EBITDA. The TP cut largely tracks EBITDA cuts. ABFRL delivered a reasonable FY20 (pre-COVID). Normalized revenue/EBITDA grew 12/15% to Rs. 90.8/7.1bn resp as both Madura and Pantaloons performed well. Rep. Revenue/Adj. EBITDA, however grew 7.7%/declined 16% YoY to Rs. 87.4/4.7bn resp. as the lockdown disrupted demand in Mar-20. For 4Q, Revenue declined 5% to Rs. 18.2bn (HSIE: Rs. 17.63bn). However, margins disappointed (-3.1% vs HSIE: -1%).
Aditya Birla Fashion.. has an average target of 150.00 from 4 brokers.
Sun Pharmaceutical Industries Ltd.    
28 May 2020, 06:50AM
463.50
0.96%
HDFC Securities
Maintain Add, risks: We increase our TP to Rs480 based on 21x FY22e EPS in line with peers. Key risks: Delay in resolution of Halol 483s, higher price erosion in the US, lower growth in the India business, slower ramp up in specialty, adverse outcome on ongoing SEBI probe on whistle-blower complaint, DOJ investigation, and drug price fixing lawsuit in the US. Suns Q4 EBIDTA/PAT missed expectations on account of higher costs and certain one off expenses. US business (ex Taro) was largely stable. The ramp up in global specialty business was encouraging (+7% QoQ) led by traction in Ilumya, Yonsa and Cequa, however, the outlook for FY21 remains sluggish. Specialty related costs will remain elevated whereas ramp up in revenues may get delayed exacerbated by Covid led challenges. On the other hand, Suns balance sheet continue to remain strong with increased focus on cash conservation (repaid ~USD400mn debt in FY20) and cash collection during uncertain times. We maintain Add rating with revised TP of Rs480.
default
Promoters pledge increased to 13.22% of holdings in Mar 2020 qtr.
Dabur India Ltd.    
28 May 2020, 06:03AM
445.85
-0.57%
HDFC Securities
Dabur can capitalise on the rising consumer trend towards naturals/ayurvedic, health supplement and hygiene products in the medium term. However, aggregate demand will be weaker for discretionary business in India and international business will also be volatile with several macro headwinds in FY21. We cut EPS estimate by ~10% for FY21/FY22 (7/9% cut in our FMCG thematic in April). We value DABUR at 40x on Mar-22E EPS, deriving a TP of Rs 404. Maintain REDUCE. Dabur India reported 12% yoy decline in net revenues with a contraction of 15% yoy in India volume. Domestic volumes were up by 4.6% yoy in Jan/Feb (largely inline) but high dependence on the last 10 days of March (~20% of the qtr, more than expected) impacted overall performance. Channel filling for seasonal products like Juices, Glucose, Pudin Hara etc was impacted most due to lockdown. International business clocked healthy 8% yoy growth in Jan/Feb, and -0.6% yoy in 4QFY20. Negative oplev and limited time for cost control resulted in 23% yoy decline in EBITDA.
Dabur India Ltd. has an average target of 471.25 from 8 brokers.
Max Financial Services Ltd.    
28 May 2020, 04:57AM
461.50
-0.99%
HDFC Securities
Valuation and view. A strategic JV partner such as AXSB provides long term distribution capability, ending uncertainty and market anxiety over the future of the AXSB distribution arrangement. We expect MAXL to lower its dependence on proprietary channels which will be VNBM accretive as investments in channels reduce. We have increased our VNB estimates for FY20/21E by 18.4/15.6%, and fine tuned our DCF assumptions, resulting in a 10.7% increase in TP to Rs 620. Key risks: Lower growth, higher cost over-runs, supply overhang due to promoter pledges, and any hurdles in deal. MAXLs 4QFY20 APE declined 15.1% YoY (better than expected!) to Rs 15.1bn as lock-down impacted sales in Mar-20. Total VNB for FY20 grew 4.8% YoY to Rs 9.0bn as margins declined 10bps YoY to 21.6%. We maintain our BUY rating with TP of Rs 620.
Max Financial Services Ltd. is trading above it's 200 day SMA of 460.0
Aditya Birla Fashion and Retail Ltd.    
28 May 2020, 12:00AM
120.50
1.86%
Motilal Oswal
28 May 2020 Revenue decline of 5% was in-line, while EBITDA loss of INR569m was a big miss v/s the expectation of INR736m in profit. This was due to a lower-than- expected reduction in fixed cost during the COVID-19 lockdown in Mar20. We cut our revenue by 9%/11% in FY21E/FY22E, building the impact of the extended lockdown and its repercussion on the slow-moving Apparel industry. Expect revival in FY22E, with EBITDA of INR6.3b, 35% growth over FY20. Revenue was down 5.1% YoY to INR18.2b (in-line) as operations were impacted due to COVID-19. Management indicated that normalized growth without the COVID-19 impact would be 13% YoY. The gross margin shrank 180bp YoY to 51.3% (220bp miss); EBITDA (pre-Ind- AS 116) turned to loss of INR569m (v/s expectation of INR736m and INR1.3b in 4QFY19). Normalized EBITDA without the COVID-19 impact should increase 1% YoY. PBT too turned to loss of INR1.
Aditya Birla Fashion and Retail Ltd. has lost -52.68% in the last 3 Months
Astral Poly Technik Ltd.    
28 May 2020, 12:00AM
852.05
1.05%
Astral Poly Technik .. has an average target of 872.25 from 5 brokers.
World Economy and Markets    
TREND | 28 May 2020, 12:00AM
Axis Direct
Most Asian markets are trading higher tracking cues from Wall Street overnight while investors continue to monitor developments on US-China relations; the comment from the US Secretary of State that Hong Kong was no longer autonomous from China, raised concerns over Hong Kongs favorable trade rel..
Axis Direct released a report for World Economy and Markets on 28 May, 2020.
GMM Pfaudler Ltd.    
28 May 2020, 12:00AM
3662.00
0.91%
Way2Wealth
EBITDA in Q4FY20 stood at `225mn up ~13.4% Y-o-Y on the back of lower raw material costs and lower labour charges. Raw material costs and labour charges plunged 16%YoY and 11% YoY to `553mn and `80mn respectively in the mentioned period. Company's EBITDA margins were up at 17.1% from 14.2% in Q4FY19. Company's PAT plunged 12.9% Y-o-Y to `116mn in Q4FY20 on account of higher...
GMM Pfaudler Ltd. has gained 170.35% in the last 1 Year
Dabur India Ltd.    
28 May 2020, 12:00AM
445.85
-0.57%
buy
ICICI Securities Limited
With increasing health consciousness, some products with immunity booster proposition like Chyawanprash, Honey & OTC products are gaining traction. Further, the company also launched five new products in the healthcare space along with immunity booster kit. DIL posted 400% surge in Chyawanprash demand & 80% growth in honey in the last few months inducing it to expand capacity of these products to meet the current demand. We believe health supplement would be driving the growth and could see structural demand improvement given increasing consumer...
Dabur India Ltd. is trading below all available SMAs