KNR Constructions Ltd.    
16 Nov 2019
248.95
1.63%
HDFC Securities
KNR delivered yet again another robust quarterly performance. Kerala/Muzaffarpur BOT collection per day stood at Rs 1.8/2.2mn vs. Rs 1.9/2.7mn QoQ. KNR is in advance stage of selling Kerala BOT. For 3 HAM projects Rs 1.7bn investment, KNR expects to receive Rs 3.3bn over the next 4yrs. Strong balance sheet, periodic BOT/HAM equity churn and robust execution capability reinforces our positive stance on KNR. We maintain BUY. Key risks (1) Slowdown in government ordering (2) Higher crude and cement prices (3) Increase in interest rates and (4) Further liquidity tightening in the financial sector. We maintain BUY on KNR with SOTP-based TP of Rs 378/sh (valuing core EPC business 18x FY21EPS at Rs 319/sh, Subsidiaries Rs 60/sh). KNR delivered yet another robust quarter with Revenue/EBIDTA/APAT beat of 10/20/35% respectively.
KNR Constructions Ltd. is trading above it's 200 day SMA of 243.3
PNC Infratech Ltd.    
16 Nov 2019
189.00
0.56%
HDFC Securities
PNC has been delivering robust performance for past 6-7qtrs as entire order backlog Rs 98.7bn (ex Rs 20bn Lucknow Ring Road and Karnataka HAM) has moved into execution. With Net D/E of 0.1x end 2QFY20, PNC is well placed to take up new HAM projects. Anticipating strong improvement PNC has increased fund/non-fund based limits to Rs 10/50bn. As NHAI bidding picks up PNC is well placed to bag new orders. NWC days has improved from 97days to 59 in 1HFY20. PNC is in talks with investors to sell under construction HAM portfolio. We maintain BUY. Key risks (1) Slowdown in NHAI ordering; (2) Delay in UP state projects awards. PNC has been delivering robust performance for past 6-7qtrs as entire order backlog Rs 98.7bn (ex Rs 20bn Lucknow Ring Road and Karnataka HAM) has moved into execution. With Net D/E of 0.1x end 2QFY20, PNC is well placed to take up new HAM projects. Anticipating strong improvement PNC has increased fund/non-fund based limits to Rs 10/50bn. As NHAI bidding picks up PNC is well placed to bag new orders. NWC days has improved from 97days to 59 in 1HFY20. PNC is in talks with investors to sell under construction HAM portfolio. We maintain BUY. Key risks (1) Slowdown in NHAI ordering; (2) Delay in UP state projects awards. PNC reported 2QFY20 Rev/EBIDTA/APAT beat of 13/12/5% respectively. We maintain BUY on PNC with a SOTP based TP of Rs 340/sh (18x FY21E EPS). We have cut our APAT estimate by 9/0.4% for FY20/21E to factor in high...
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PNC Infratech Ltd. is trading above all available SMAs
Britannia Industries Ltd.    
16 Nov 2019
3149.10
-1.45%
HDFC Securities
Although BRIT is underperforming other FMCG cos in the near-term, medium term opportunity makes the story attractive. We believe BRIT can successfully become a total snacking company as it has all the right ingredients i.e. brand strength, deep distribution, superior management execution and operating scale. Besides, we expect BRIT to continue gaining share in biscuits led by premiumisation and distribution expansion in Hindi belt. BRIT has reduced its ICD's to its group companies to <Rs 5bn vs. ~Rs 7bn in Mar-19. BRITs 2Q performance was soft and in-line (after miss in 1QYF20). Co has underperformed peers (HUL, Dabur etc) in 1HFY20 owing to slowdown in biscuit category growth. However, market share gains and promising new launches keeps us interested. We expect gradual recovery in 2HFY20. We cut estimates by ~2% to factor delay in full recovery (1Q onwards vs. 4Q earlier). We value BRIT at 45x P/E on Sep-21E EPS, arriving at a TP of Rs 3,513. Maintain BUY.
Britannia Industries Ltd.'s price crossed below SMA30 today
134.10
-1.07%
HDFC Securities
ONGC generates OCF yield of almost 28% and divided yield of 7.4% over FY20/21E. Despite realising market price for oil in the absence of any subsidy sharing, upstream companies have remained unfavourable. Stake sale from government to achieve its disinvestment targets remains a key overhang on the stock (in last 2 years GoI's shareholding shrunk from 68.02% to 62.98%). We maintain BUY with a TP of Rs 187/sh (8x Jun-21E standalone core EPS (adj. for dividend income) + OVL EPS and Rs 34 from other investments). Post an in line performance in Q2, we maintain BUY on ONGC. Adjusting for its investments (OVL+ other) the stock is trading at 5.8x Sep-21E standalone EPS. We believe that such pessimism is unwarranted.
Oil And Natural Gas Corporation Ltd. is trading above it's 50 day SMA of 133.7
MphasiS Ltd.    
15 Nov 2019
912.00
0.54%
HDFC Securities
Following the strong momentum in DXC over FY17-19 (22% CAGR), growth is now expected to be led by Direct Core supported by (1) Strong deal wins (15% QoQ), (2) Strategic accounts (double-digit growth & market share gains in BFS), (3) New logos (including F100 accounts) and (4) Blackstone channel (5% of Direct core). While we remain positive on Direct Core channel, we lower growth est for DXC-HP segment with increased risk around the new strategic roadmap for DXC (leadership change, business divestment, Virtual Clarity acquisition). Expect USD rev/EPS growth at 10% CAGR over FY19-22E. We maintain BUY on Mphasis following a nearly in-line 2Q. Growth drivers in Direct Core are intact, while DXC portfolio risk has increased. Our TP of Rs 1,140 values Mphasis at 16x Sep-21E EPS
MphasiS Ltd. is trading at high day volume of 510.2K.
276.65
-0.65%
HDFC Securities
AHLU delivered yet another 2QFY20 miss. We continue to remain patient as execution shall start on entire order backlog from 4QFY20E. About Rs 10.6bn worth of projects (15% of OB) are slow moving of this Rs 5.5bn Charbagh Station redevelopment may get foreclosed due to environment hurdle. New wins of Rs 20bn doesn't have environment concerns. Delhi construction ban may get lifted by Nov-19 end. The Robust balance sheet, net cash status and better than peers RoE/RoCE are other comforting factors. We maintain BUY. Key risks include (1) Slow down in government capex; (2) High cost inflation; (3) Stuck projects; (4) Lower than expected leasing in Kota BOT project. We maintain BUY on AHLU with a reduced TP of Rs 388 (vs. Rs 402/sh earlier) despite 26% 2QFY20 miss on APAT. We downgrade our FY20/21E EPS by (13)/2.7% to factor in slow order book to execution conversion and ~Rs 10.6bn of non moving projects. Tight liquidity is another factor impacting growth. We value the core EPC operations at 15x FY21E EPS.
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Ahluwalia Contracts (India) Ltd. is trading below it's 30 day SMA of 286.8
Dilip Buildcon Ltd.    
15 Nov 2019
405.00
1.75%
HDFC Securities
DBL has established itself as strong executioner with a track record of securing early completion bonus for its projects, though it comes at a cost of inventory pile up and NWC stress in case of delays in Appointed Date. With all but one of its HAM projects awaiting AD, we expect an improvement in NWC situation. DBL has secured a deal for monetization of its HAM portfolio with Cube Highways, which may enable capital churning and help bid for new projects. We maintain BUY with a cautious approach on debt built up We maintain BUY on DBL, with a reduced TP of Rs 717/sh (vs. Rs 737/sh earlier). We retain our target EPC multiple at 12x FY21E EPS to factor a marginal cut in FY20 revenue estimates. We have revised our FY20/21 EPS estimates lower by 9.9/4.9% respectively.
Dilip Buildcon Ltd. is trading below it's 50 day SMA of 408.7
Majesco Ltd.    
15 Nov 2019
408.00
-0.54%
HDFC Securities
Cloud revenue growth has witnessed slowdown in the last two quarters due to completion of a large project. The back-fill will happen gradually with new deal wins, go-lives and growth in subscription revenue. Partnership with Capgemini, IBM and Microsoft (Azure) looks promising but large deal wins are still not coming. We expect revenue CAGR of 10% over FY19-22E (cloud CAGR of 16%). We maintain our positive stance on Majesco based on (1) Rising adoption of third-party software by insurers, (2) Solid partnerships, (3) Continued deal wins, and (4) Cloud traction. The risk to our thesis includes slowdown in cloud deal wins, prolonged sales cycle and deterioration in US/Europe macros. We maintain BUY on Majesco despite poor 2QFY20. Revenue fall was led by cloud (completion of large implementation) but the fall in EBIT margin was lower than expected. The order backlog remains robust and cloud deal wins are healthy. We cut FY20/21E USD revenue est. by 4.1/5.4% to factor in 2Q miss. Our TP of Rs 677 implies EV/rev multiple of 2.0x on Sep FY21 rev.
HDFC Securities decreased Buy price target of Majesco Ltd. to 677.0 on 15 Nov, 2019.
Personal Finance & Investment    
TREND | 15 Nov 2019
HDFC Securities
Despite an encouraging quarter on collections and pre-sales, PEPL has seen further debt built up, posing a challenge for the management in achieving optimal leverage (target D/E of 1.4 by FY20E). One of the few positives is that ~64% of debt is backed either by annuity or by rental securitization/ bill discounting. Launches during 1HFY20 were largely tilted towards commercial projects (6.2mn sqft out of 7.9mn sqft). The company continues to look at opportunities for monetization of its retail/hospitality assets and update on the same (expected in 3QFY20) would provide a re-rating trigger. Retain NEU with Rs 297/sh TP. We maintain NEU on Prestige Estate (PEPL) despite pre-sales and collections holding steady, owing to increasing debt and limited visibility on asset monetization. Our SOTP based TP is Rs 297/sh. We have increased our FY20/21E EPS estimates by 16%/20% respectively.
HDFC Securities released a Neutral report for Personal Finance & Investment on 15 Nov, 2019.
ABB India Ltd.    
15 Nov 2019
1455.00
-0.77%
HDFC Securities
ABB is well placed to benefit from capex led economic expansion. Government initiative on tax reduction augurs well over long term for developing India into a global manufacturing hub. India enjoys both domestic demand and labour arbitrage vs. global supply chain. Manufacturing shifts take time and near term weak economic outlook poses re-rating headwinds. We recommend NEU on ABB. Key risks (1) Delays in Government capex recovery, (2) Slowdown in private investments, (3) INR depreciation, and (4) Any adverse corporate action. We recommend NEU on ABB India Ltd. (ABB) with SOTP based TP of Rs 1,534/sh (42x ABB, 30x Power Grids discontinued business). Whilst ABB is well placed to cater to Automation/Motion/Electrical segments, demand headwinds and punchy valuation limits further re-rating. Strong balance sheet, Automation Products/Solutions expertise and cross cycles experience limits downside.
ABB India Ltd. is trading above it's 200 day SMA of 1408.9