Maintain BUY with a TP of Rs 1,035 (18x Jun-19E and Rs 135/sh for pipeline). Glenmarks (GNP) 1QFY18 performance was in stark contrast to that in the previous quarter. The overall top-line grew 23% YoY, largely on the back of ~50% growth in the US business (gZetia impact). Revenue was also surprisingly boosted by a 15% growth in the India business, despite the GST disruption in the domestic market. The EBITDA margin came in at 23.3%, in line with estimates, up 640bps YoY. PAT grew ~44% YoY to ~Rs 3.2bn.
We reiterate BUY with a TP of Rs 252, based on 35x Jun-19 EPS. Cromptons net revenue contracted by 3.7% to Rs 10.5bn in 1QFY18, against our expectation of 2% growth. Adj. EBITDA and APAT were down by 11% and 7% respectively. As per mgt, channel destocking impacted revenues worth Rs 1.3 to 1.5bn in 1QFY18. Adjusting for the same, revenue growth was at 7-8%, suggesting healthy underlying demand. The ECD segment (75% of revenues) saw 8.6% decline in revenues, owing to high dependence on the wholesale channel. While, Crompton gained ~1% market share in Fans (especially premium) during the last six -months. Premium fans (16% of fans) grew by a strong 25%.
ITC commands high operating margin of 36%, along with core RoCE of ~40%. We have BUY rating with a TP of Rs 353, based on 32x Jun-19EPS. ITCs gross revenue was up 4.3% YoY at Rs 137bn (our expectation 3.4%). EBITDA/PAT grew 6.2%/7.4% YoY respectively, in-line with our expectations. Revenue growth was healthy, considering destocking pressure. Cigarette business registered healthy revenue/EBIT growth of 6.6%/9.0% respectively (5%/6.4% expectation). We believe cigarette volumes grew by ~1%. Non-cigarette business remained slow, with revenue/EBIT growth of 3.5%/4.5% respectively
Zee Entertainment Enterprises Ltd.'s Q1FY18 result was largely inline with our expectations. The company reported 2% YoY degrowth in sales primarily led by lower subscription revenue. EBITDA increased by 26.8% YoY on account of lower operating cost while sharp surge in other income supported PAT growth at 15.8% YoY.
Maintain BUY with a revised SOTP of Rs 338 (1.9x FY19E core ABV of Rs 132 and sub-value of Rs 88/sh. ICICIBCs 1Q performance was a tad disappointing on the core front, as NIMs dipped and growth slowed optically. While the slippages were lower (despite one large non-watchlist NPA) and the restructured book almost halved the net stressed assets were stable, as watchlist increased 7% QoQ.
Maintain BUY with a TP of Rs 690, 14x FY19E. Mphasis delivered stellar 1QFY18 performance, with revenue at USD 231mn, up 4.3% QoQ, led by the HP/DXC channel (+10.1% QoQ and 25.8% of revenue) and Direct core (4.1% QoQ and 54.8% of revenue). EBITDA% came in at 14.9%, -89bps QoQ, and APAT stood at Rs1.87bn. Deal bookings doubled in 1Q, with TCV of USD 183mn as compared to the quarterly average of USD 91mn in FY17 (88% of TCV within Mphasis focus areas of Digital and GRC).
Maintain BUY with a TP 8478 (24x FY19E EPS). Maruti Suzuki (MSIL) delivered in line revenues (+18% YoY to 175bn) in 1Q. However, EBIDTA margin came in lower at 13.3% (-156bps YoY), led by higher discounts, input cost and compensation paid to dealers. APAT came in lower than expectations at Rs 15.6bn (+5% YoY), owing to margin contraction offset by higher other income.
Downgrade to SELL with a TP of Rs 2,275 (17x Jun19E). Dr. Reddys Labs (DRRD) posted weak numbers, with the top-line growing only ~3% YoY in 1QFY18. This was led by a 3% decline in the US business and a 10% decline in domestic revenues. The EBITDA margin came in at 9.2%, sinking ~700bps QoQ, with the gross margin plummeting to 51.5% during the quarter. Incremental competition in the US continues to erode profits in the absence of new lucrative product launches. The impact of GST on the domestic business also contributed to the margin decline. PAT was Rs 591mn, down 53% YoY despite the low base.
Q1FY18 revenue was largely in line led by Retail and BFSI (up ~9% QoQ, aggregate share at ~47%). Execution was strong with increase in offshore revenue share and utilization rates. However, higher onsite efforts and currency impacted the margin (10% vs. our estimate: 12%). Higher depreciation/amorti..
Raise estimates; maintain BUY: We increase FY18/19E EPS by ~8% to factor in (a) USD 0.5/bl hike in GRM, (b) benefits of ethane imports (USD 250 mn). Revised TP stands at Rs 1,785 (Rs 1,545 earlier). At CMP, the stock trades at 15x FY19E EPS of Rs 105 and 14x FY17E EPS of Rs 116.
Q2CY17 results were 6% ahead of estimates at operational level driven by margin improvement in Bill Forge (BFL) and Europe. Consolidated EBITDA margin at 13.2% benefitted from closure of the Jeco (Germany) plant and merger of Bill Forge. The management maintained its guidance of further improvement ..
Q1 revenue declined 19% YoY to Rs 8.2 bn (~14% below estimate) as export shipments were impacted due to setting up of revised protocols as stipulated in the import alert by the USFDA. As per the management, the protocols have now been established; expects normalcy from Q2. Divis guides for flat cc r..
In the concall, the management highlighted that its domestic motorcycle market share has suffered due to the recent transition from BS-3 to BS-4 emission norms where all players except Bajaj saw huge pre-buy (at a high discount) and consequently dry channel which was filled last quarter. It expe..
Karnataka Bank (KBL) reported PAT of Rs 134 cr ( up 10% y-o-y) in Q1FY18 , led by improvement in NII ( up 16% y-o-y) and other income ( up 25%y-o-y). The increase in other income was attributed by treasury income (up 78% y-o-y) and Fee Income (up 8% y-o-y). This quarter witnessed improvement in NIMs..
Retains Guidance, But Organic Growth Will Be Smaller Contributor HCL Technologies' (HCLT) 1QFY18 QoQ revenue growth of 2.6% in CC terms was below our estimate of 3.6%. Moreover, the organic growth was a disappointing 1.3% (our estimate was 2.0%). For FY18, while HCLT has retained its revenue growth guidance of 10.5%-12.5% in CC terms and 19.5%-20.5% CC EBIT margin, we believe the former will be less driven by organic revenues than assumed earlier (6%-7%). After a great FY17, HCLT sounded fairly cautious on prospects of the IMS service line (~40% of revenues) in FY18 because of slower decisionmaking by clients which is quite surprising as we did not hear any such commentary from peers. In 1QFY18, poor organic growth was led by disappointing performance in its IMS and...
GST Compensation And Higher Discount Impacts Margins Maruti Suzuki India's (MSIL) 1QFY18 earnings were below expectations with EBITDA and PAT coming 8%/7% below our estimate, respectively. EBITDA margin at 13.3% (down 153bps YoY , down 70bps QoQ) was 120bps below our estimate of 14.5% as the company compensated dealers for Goods and Services Tax or GST implementation. Compensation to dealers during 1QFY18 for GST implementation had a 50bps adverse impact on margins, while sales and promotional expenditure to clear the stock before GST implementation accounted for another 30bps. Apart from this, the rise in commodity prices also had an adverse impact on margins. Net sales grew 17% YoY on the back of double-digit YoY volume growth...
Dr Reddy's Laboratories' (DRL) 1QFY18 earnings performance was below our as well as consensus expectations. Revenue for the quarter stood at Rs33,332mn, a sequential decline of 8% and well below consensus estimate/our estimate by 4%/5%, respectively. The decline was because of higher than-expected price erosion in the US market and a more severe impact of Goods and Services Tax or GST-related destocking in India. PAT declined 80%/57% to Rs666mn on QoQ/YoY basis, respectively, (below our/consensus estimates by 77%/78%, respectively). The decline in net earnings was steeper because of higher cost of sales (price erosion), and a sharp increase in research and development or R&D; and SG&A; expenses during the quarter....