Britannia delivered a healthy quarter despite weaker than expected volume growth of 8% and higher SG&A; expenses (capacity/portfolio ramp-up led expenses).

In Q3FY19, Himadri Specialty Chemicals Ltd (HSCL) reported revenues of Rs. 587 Cr (up 17% Y-o-Y, flat Q-o-Q), EBITDA of Rs. 148 Cr (up 18% Y-o-Y, up 12% Q-o-Q) with EBITDA/MT of Rs. 15,885 vs Rs. 15,487 Q-o-Q.

Muted Quarter; Performance Likely To Be Listless Going Forward Ambuja Cements (ACEM), on a standalone basis, reported revenue growth of a meagre 5.5% YoY at Rs28.6bn in 4QCY18 driven by better volume growth. ACEM's volume grew 4.4% (below industry growth in 4QCY18) to 6.13mt (in line with our estimate) driven by healthy demand in its key markets (pan-India excluding southern region). ACEM's realisation, however, remained flat YoY at Rs4,671/tn (Rs4,625/tn in 4QCY17), below our estimate, despite higher sales in trade segment (80% of total sales in trade/retail segments) and incremental contribution from premium products largely because of weak cement prices in western region. Capacity utilisation improved to 83% in 4QCY18...

GlaxoSmithKline Consumer Healthcare's (SKB) 3QFY19 operating performance was broadly in line with our expectations. Overall revenues grew 8% YoY led by Horlicks which witnessed nearly double-digit volume growth during the quarter. Brand-building initiatives during the quarter were focused on re-launch of Junior Horlicks with two times more DHA besides the ongoing Horlicks campaign focused on nutrient absorption. The management expects advertisement spending and marketing investment to continue to remain in the region of 13%. Raw material costs trend continued to remain favourable and this was one of the key reasons behind the expansion in operating margin by nearly 200bps YoY. Operating profit growth during...

We recently met Ms Parminder Chopra, GM Finance, Power Finance Corporation (PFC), and gleaned incremental insight into the stressed assets situation in the Indian power sector. The most key takeaway from our conversation was that, broadly speaking, the provision cover that PFC is currently carrying on any given stressed asset is indicative of the expected loss given default (LGD) for that specific asset. Since these stressed assets have system-wide exposures across the banking sector, insight garnered from PFC has a read-across for banks that have exposures to the same assets as PFC. To get a sense of the provision cover on specific...

We maintain our BUY rating and expect a re-rating in the stock. Emamis stock was under pressure due to consistent weak operating performance and rising promoter share pledge. Although recovery in operating performance is delayed, the pressure on the stock w.r.t. share pledging is now behind after promoter divested 10% stake for Rs 16bn @Rs 355/share. With this, the promoter share pledge will decline from 48% as of now.

Nestle India's (NEST) earnings fell short of expectations in 4QCY18 after outperforming significantly in previous quarters. Domestic revenues for the quarter were up 12% YoY, largely led by volume growth and in line with expectations. Overall revenues fell short of expectations as exports were sluggish. However, similar to the previous quarter, the growth was fairly broadbased and the innovation intensity was maintained with the launch of Maggi Baked Noodles, Nescafe E Coffee smart machine and Everyday Chai Life. On the margins front also the performance was below expectations as advertisement support was stepped up in response to new launches done in the past six months and some contingency provisions required to be made during the quarter. Although margins during the quarter fell outside the band, considering that...

19 February 2019 Hospitality In the last years Capital Market Day Meet, IH had shared its Aspiration 2022 vision to achieve EBITDA margin expansion of 8% by improving revenue by 3-4% and reducing cost by 3-5%. According to a STR Horwath report, occupancy of domestic hotels stood at 65.3% (+0.2pp) with ARR growth of 1.8% to INR5,846 in 2018. In Dec18, IH rebranded and relaunched the Ginger Goa hotel, following which ARR increased by 30-40%. We note that Ginger hotels are operated by the companys subsidiary, which contributes 4%/2% of overall revenue/EBITDA (as of FY18). The flow through to EBITDA will be higher as incremental cost involved in operating rooms has not increased in proportion to ARR growth. The company aims to achieve EBITDA margin expansion of 8% by 2022, of which 3- 5% would come from cost measures.

The revenue from operation came in at |1865 crore (up 121% YoY, 4% QoQ) higher than our estimates of |1630.8 crore. Utilization for the quarter came in at ~82%, broadly in line with our estimate of 85%. HEG reported an EBITDA of |1313.5 crore higher than our estimate | 1021.5 crore, the resultant EBITDA margin came in at 70.4% (as against our estimate of 62.6%, Q3FY18: 66.2%, Q2FY19: 76.2%)....

ICICI Securities Ltd | Retail Equity Research JK Tyres & Industries' (JKTIL) reported mixed set of results for Q3FY19. On a consolidated basis, revenue came in at | 2,731 crore (up 28.6% YoY). Gross Revenue from India increased by ~26.1% YoY to | 2,437 crore while revenue from Mexican operations grew by ~41.4% YoY to | 328 crore. According to the management, JKTIL witnessed higher sales volumes across categories, with Truck Bus Radial (TBR) segment volumes growing by 30% YoY in 9MFY19....

Orderbook at | 16,805 crore, 2.7x TTM revenues in Q3FY19 With total order inflows worth | 2,431 crore in 9MFY19, SIL's orderbook stands at | 16,805 crore as of Q3FY19. Of this, 80% of the orderbook comprises of government orders, while remaining 20% pertains to order from private entities. The current orderbook does not include | 1,100 crore worth order wherein the company has emerged as L-1 bidder. The management is hopeful of receipt of | 2,500 crore worth orders in Q4FY19E and hence has guided for a total order inflow of | 5,000 crore in...

For 3QFY2019, Ashok Leyland Ltd (ALL) posted results, which disappointed on both top-line as well as bottom-line fronts. Revenue de-grew by 12% yoy to `6,325cr. However, operating margin improved by 225bps. On the bottom-line front, ALL reported PAT de-growth of 21.5% yoy to `381cr on the back of lower sales. Outlook and Valuation: We

Tech Mahindra Ltd. reported healthy broad based growth in Q3 FY19. Tech Mahindra reported consolidated revenue growth of 3.5% on QoQ and 4.3% on constant currency basis. EBITDA margin expanded 300 bps on YoY basis and 50 bps on QoQ basis.

In Vietnam, Sales has declined by ~24% Y-O-Y in Q3FY19. We believe debt free status, better product mix and additional spray-dried capacity of 3500 ton by Q4FY20 would bring strong revenue and profitability growth in Vietnam. The management has guided 80% capacity utilisation for FY19 vs 60-70% in FY18. Incentives offered by Vietnamese government of zero tax rates will continue further....

We value Voltas based on SOTP, valuing EMPS/EPS/UCP at Dec-20 P/E at 17/20/35x with TP of Rs 650 (Rs 640 earlier). Voltas reported a weak quarter led by muted off-season RAC performance. Net Revenues grew by 9% driven by healthy execution in the project biz (up 16% vs. exp. of 22%). Weak RAC sales (-3% vs. exp. of 5%) was owing to high channel inventory, modest festive season offtake and heavy base (32% in 3QFY18; rating change led pre-buying).

JK Tyre Operating efficiencies partially negate impact of high RM costs and rupee depreciation JK Tyre reported Q3FY19 numbers. While topline beat our expectations, profit was...

Ambuja Cement (ACEM) reported disappointing set of Q4CY18 earnings with Change in Estimates | Target | Reco miss across the fronts. EBITDA/t fell to multi-quarter low of Rs500 (PLe:Rs725) due to steep increase in costs and weak realisations. Lumpiness...

JK Tyre Operating efficiencies partially negate impact of high RM costs and rupee depreciation JK Tyre reported Q3FY19 numbers. While topline beat our expectations, profit was...

Volumes grew 4.4% YoY to 6.13mt Cost/t increased 8% YoY (-3% QoQ) to 18 February 2019 power & fuel cost/t. EBITDA/t of INR659, thus, came in lower than our estimate of INR901. EBITDA declined 20% YoY but increased 13% QoQ to YoY, +0.4pp QoQ). Exceptional items amounting to INR2.4b were booked in the quarter. PAT stood at INR2.95b (-3% YoY) versus our estimate of INR3.2b, while reported PAT stood at INR5.37b. (1) Power & fuel cost increased due to high-cost inventory. (2) ACEM commissioned the Gare Palma coal block, which should help optimize fuel mix.

Revenue declined 5% YoY to INR672m 18 February 2019 INR47m). The sluggish performance can be attributed to the fear of fall armyworm in maize, which dampened sentiment and led to lower acreage (note that majority of third quarter revenue is contributed by maize, where volumes declined 22% YoY). The downside to our estimate is the non-renewal of KSCLs license by the Andhra Pradesh government (got suspended recently for a year), which can impact FY20 revenue by 6-7%. Given this uncertainty, which might restrict the company from taking advantage of a likely positive cotton season in FY20, we cut our multiple from 17x to 15x (~10% discount to its three-year average multiple). We, however, find comfort from the companys reducing dependency on cotton business, with non-cotton share likely to rise up to 55% in FY21.