Beat across major fronts with margin expansion

Q4 revenues grew 5.3% YoY to | 4606 crore. Domestic sales grew 4.5% YoY to | 1807 crore. US grew 17.1% YoY to | 1002 crore on the back of continued Albuterol ramp-up. RoW markets business de-grew 4.8% YoY to | 674 crore. South Africa business grew 13.9% YoY to | 606 crore tracking strong private business momentum. EBITDA margins expanded 281 bps YoY (down 653 bps QoQ) to 17.3% mainly due to significantly lower other expenditure partially offset by lower gross margins. Subsequently, EBITDA grew 25.7%...

Vardhman Special Steel (VSSL) reported a healthy set of Q4FY21 numbers on the back of strong demand from the automobile sector. Sales volume for the quarter was at 47828 tonnes, up 34% YoY, 4% QoQ. Topline came in at | 334.5 crore, up 63% YoY, 16% QoQ. Topline growth was on the back of higher sales volume and price increase, which came into effect from January 2021. Ensuing EBITDA came in at | 52.3 crore, up 231% YoY, 32% QoQ. EBITDA margin for the quarter was healthy at 15.6% (13.7% in Q3FY21, 7.7% in Q4FY20). The robust EBITDA performance was primarily on the back...

Q4 revenues grew 5.3% YoY to | 4606 crore. Domestic sales grew 4.5% YoY to | 1807 crore. US grew 17.1% YoY to | 1002 crore on the back of continued Albuterol ramp-up. RoW markets business de-grew 4.8% YoY to | 674 crore. South Africa business grew 13.9% YoY to | 606 crore tracking strong private business momentum. EBITDA margins expanded 281 bps YoY (down 653 bps QoQ) to 17.3% mainly due to significantly lower other expenditure partially offset by lower gross margins. Subsequently, EBITDA grew 25.7%...

Voltas: Voltas continued to surprise both on revenue and margin front, beating our as well as street's expectation. UCP revenue/EBIT grew by 20/28% YoY (HSIE 25/20%) despite firm base (4QFY20 revenue/EBIT growth of 20/69%). UCP volume growth was at 18% YoY and YTD market share was at 25.6% (24.2% last year). Market share gain, pre-buying, increased mobility, and anticipation of strong demand in season supported the 4Q growth. UCP revenue/EBIT growth in FY21 was at -13/-2% YoY despite a firm base (29/57% in FY20) and summer 2020 being a washout. . We were expecting supply constraints and RM inflation to impact EBIT margin by (60bps) in 4Q but Voltas surprised with 100bps EBIT margin expansion to 15.6% (12 quarters highest margin). EMPS revenue was up by strong 37% YoY (-18% in 4QFY20) and 9% QoQ, HSIE 25%. EMPS EBIT margin also improved sharply by 700bps to 8.4% (10 quarters highest margin), HSIE 3.5%. COVID-led lockdown again reduced selling window for RAC (impact is unlike last year). We cut our EPS estimates for FY22 by 7% while maintain for FY23. We value Voltas on SoTP basis, (UCP/EPMS/EPS P/E at 45/15/15x and Volt-Beko P/S of 4x) on Jun-23 (earlier Mar-23) to derive a target price of INR 1,100 arriving at an implied P/E of 37x. Maintain ADD. BSE: BSE delivered the best quarterly performance over the past four years with revenue growth of 26% QoQ and a margin of 30.3% (multi-quarter high). Growth was driven by market-linked revenue, with core transaction/book building increasing by 46.7/81.2% QoQ. BSE gained...

HG Infra Engineering (HG Infra) reported a robust set of Q4FY21 numbers. Standalone revenue improved 65% YoY to | 1,027.8 crore, clearly reflecting the sharp pickup in execution aided by healthy order book position and normalisation of labour availability/raw material supply chain post Covid-19 related disruptions. Also, operating profit margin was at an elevated 16.2%, down 8 bps YoY, on account of better project mix. At PAT level, robust operating performance translated into 90.5% YoY growth (to | 97.7 crore)....

With expected exports, DWL would be able to substantially reduce its sugar inventory in the next one year. Further, increasing distillery volumes through B-heavy & sugarcane juice route would drive growth in operating profit. We expect | 485 crore of operating cash flow generation in the next two years, which would fund capex for new distillery and also result in debt repayment to the tune of | 260 crore. We expect 30% earnings CAGR on the back of strong operating profit growth & interest cost reduction. We change our...

US remains a key driver, contributing ~37% to revenues as of FY21. DRL has a strong pending pipeline comprising 92 ANDAs (47 Para IV filings, 23 FTFs) and three NDAs under 505 (b) (2) route. We expect US sales to grow...

The company is aiming to reach 10 MT capacity by FY25E. In the first phase, Sagar Cement is adding 2.5 MT capacity (1 MT in MP and 1.5 MT in Odisha) for capex of | 800 crore. These capacities will get commissioned by the end of Q2FY22E. Post these expansions the total capacity will increase to 8.25 MT. Having already spent | 545 crore, we expect debt levels to peak around...

We reiterate our buy on Tata Power factoring in the growth in EPC business, higher regulated capex, debt reduction and merger benefits. We assign a SoTP TP of INR127 (+ 17% from the CMP) Tata Power reported consolidated revenue at INR 101.3bn (+53%/+33% YoY/QoQ) in Q4FY21. The numbers are not comparable to our estimates due to the acquisition of Odisha distribution circle. The growth was also aided by strong execution of solar EPC projects. However, EBITDA declined 8.5% yoy to INR14.5bn due to increased losses in Mundra project from the rise in coal prices. The deleveraging exercise helped the company in lowering its interest expenses, which along with a deferred tax credit led to a 38.6% yoy rise in its APAT to INR3.9bn. Solar EPC order backlog stood strong at INR 87.4bn. While InvIT transaction missed the FY21 end target, the management has indicated a much better alternative for monetisation of its renewable assets which could fetch a higher valuation. We have revised our earnings estimates factoring the inclusion of Odisha discoms and exclusion of renewable business in our estimates.

We tweak our estimates by -3%/+4% for FY22/23e and revise the TP to INR1,220. Downgrade to ADD. Lupins 4Q sales/EBITDA was ~5%/9% below our estimates, largely on account of subdued US (+4% QoQ, weak flu season offset Albuterol contribution) and weak API business (-22% YoY). EBITDA margin at 18.7% remained flat QoQ. Management guided for double-digit growth in key markets (India and US) in FY22 and EBITDA margin improvement to 21-22% by FY23 (vs. 17.2% in FY21). We continue to remain positive on Lupins ability to execute and monetise its complex pipeline in the US (inhalers and complex injectables). We factor in ~460bps margin improvement (to 21.8%) and ~40% earnings CAGR over FY21-23e, driven by operating leverage. However, at 31x/23x FY22/23 EPS, the positives appear priced in.

Mahindra Lifespaces: Mahindra Lifespaces Developers Ltd (MLDL) reported operationally strong quarter with pre-sales value/volume growing 77%/67% sequentially to Rs 3.5bn, driven by four new launches. For FY21, MLDL registered de-growth in pre-sales value/volume of 15%/25% as 1HFY21 was impacted due to COVID-19. Labour availability has reduced to 60% and is expected to ramp up by 1QFY22 end as COVID-19 impact reduces. Over last 9M, MLDL has added 3 land parcels with ~Rs 15bn presales potential and is in advance stages of negotiation on land parcels with preslaes potential of Rs 45bn. Residential presales/IC business leasing guidance of ~Rs 25/5bn annually by FY25 remains intact. Given strong growth trajectory, robust balance sheet, trustworthy brand and tailwinds for organized players, we remain constructive on MLDL. We maintain BUY with SOTP valuation of Rs 773/sh. KEC International: KEC reported robust execution with revenue at Rs 43.6bn (10% beat), driven by non-T&D; segments. However, margin contracted by 197/95 bps to 8.1% due to SAE EBIDTA loss of ~Rs 0.7bn (higher commodity prices and overhead/idling costs). Margins could deteriorate further if commodity prices inches up further. FY21 order inflow stood at Rs 119bn, taking the order book (OB) to Rs 191bn (Rs 250bn with L1). Despite the lockdown, all sites are operating. With robust prequalification in domestic/international markets and across sectors, KEC is well-placed for a re-rating. However, sustained higher commodity prices could impact the margins. We maintain BUY on KEC with reduced target price of Rs 452/sh (Rs 476 earlier), 14x Mar-23 EPS. Sonata Software: Sonata posted better-than-expected growth in...

We maintain BUY with SOTP valuation of Rs 773/sh. Mahindra Lifespaces Developers Ltd (MLDL) reported operationally strong quarter with pre-sales value/volume growing 77%/67% sequentially to Rs 3.5bn, driven by four new launches. For FY21, MLDL registered de-growth in pre-sales value/volume of 15%/25% as 1HFY21 was impacted due to COVID-19. Labour availability has reduced to 60% and is expected to ramp up by 1QFY22 end as COVID-19 impact reduces. Over last 9M, MLDL has added 3 land parcels with ~Rs 15bn presales potential and is in advance stages of negotiation on land parcels with presales potential of Rs 45bn. Residential presales/IC business leasing guidance of ~Rs 25/5bn annually by FY25 remains intact. Given strong growth trajectory, robust balance sheet, trustworthy brand and tailwinds for organized players, we remain constructive on MLDL

We revise our rating to BUY (HOLD earlier) given the long term structural growth drivers like ,clear focus on driving volumes and profitability, improved traction in other business segments

KEC International at 12x FY23E EPS of Rs.35.4 to arrive at a target price of Rs.424 implying an upside of 13% from CMP.

We recommend a BUY' with TP of INR 1,400/share, implying an upside of 15.7% from CMP.

We roll over our estimate to FY23E valuing the company at 7x of FY23E EV/EBITDA to arrive at target price of Rs, 1230 implying an upside of 18% from CMP.

Asian markets are trading higher tracking cues from Wall Street overnight. Nikkei is trading higher by 1.80%, Shanghai is trading higher by 0.64% and Hang Seng is trading higher by 0.46%.

revenues growing by 33% YoY to Rs.799cr in Q4FY21. All segments saw strong growth mainly on the back of of successful new launches, increase in market share of finished dosages, as well as customer additions for APIs and PFIs. Disruption in supply of key raw materials from China will impact operating performance in the short term The company has guided a Capex of ~Rs.1,000cr over the next 3 years as it looks to expand capacities for its key products...

Siemens India, a flagship company of Siemens AG (Germany), is an integrated technology provider and a leading powerhouse in electronics and electrical engineering. Siemens is strongly placed in Energy and Infrastructure including transmission & distribution, automation, urban...