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BLS International (BLS) is a visa & passport processing company and debuted on NSE in June 2016 (earlier listed in Delhi Stock Exchange). It has recently won a five-year Punjab e-Governance project for providing 223 citizen services through 2,147 centers (Seva Kendras).
Valuation & Outlook: BLS’ revenue and EBITDA has grown at a healthy FY13-16 CAGR of 45/34%. In FY16 EBITDA margin stood at 7.3% however based on net revenue basis, the margin is much higher at ~40%. Niche focus, strong execution and an asset light model have enabled healthy RoE of 31% in FY16. We expect the Revenue/PAT to grow at a robust CAGR for FY16-18E supplemented by Punjab e-governance project. We believe that the valuations are attractive, given its potential to deliver super-normal earnings growth ahead and strong return ratios.
Coal India's reported nos (EBITDA: Rs38.6bn, -22.5% YoY, -37.8% QoQ) were disappointing. FSA pricing came in lower than expected (Rs 1,239/t, -4.4% YoY, -8.3% QoQ, -4.9% vs estimates) likely due to adverse mix and despite partial benefit of a price hike taken in end-May. E-auction realisations continue to languish (Rs 1,570, -28.1% YoY, -4.7% QoQ), though in line with estimates.
These numbers are undoubtedly weak, but things have moved significantly post June. The increase in imported coal/petcoke is likely to provide some boost to the e-auction realizations which continue to suffer, as the premium to FSA prices remains at near historic lows (27%). We also note that the realized eauction prices are much below import parity, even accounting for the asymmetric levies on domestic coal (6% excise vs zero import duty on Indonesian coal under FTA). Maintain BUY with a TP of Rs 369 (Unchanged, 8.0x FY18 EV/EBITDA)
The Aug-16 print of 5.05% was the lowest since Mar-16. The fall in inflation was triggered by robust disinflation, mainly food items and ably aided by the erosion of adverse base.
The substantial decline in IIP for Jul-16 to a 3 month low was mainly on account of the anomalous head of rubber cables (reduction of 4.24 percentage points from headline print) within capital goods. The same is expected to be rectified with the introduction of a new series before the end of CY17.
Lackadaisical Performance on Lower Volume, Higher Cost On the back of lower-than-expected sales volume of Aluminium & Alumina along amid a overall challenging environment marked with higher cost of inputs, National Aluminium Company Limited (NALCO) has posted lackadaisical performance in 1QFY17, missing our estimate on all counts. Its EBITDA dipped 15% yoy (18% qoq) to Rs1.95bn vs. our estimate Rs2.7bn. Notably, power cost surged 19% yoy (15% qoq) to Rs5bn, which we believe to be due to coal cess. Though Aluminium division's sales rose by 6% yoy, it plunged 34% qoq to 82,836 tonne, and below...
Fundamentals Remain Intact, Existing Trend to Continue: Revenue/EBITDA/PAT have grown by 8.6%/15.2%/15.7% to Rs.16.9bn/3.9bn/2.7bn(Vs Rs.15.6bn/3.4bn/2.3bn YoY), respectively on the back of 9.3% volume growth(domestic) in Q1FY17. The company's EBITDA margin rose by 410 bps QoQ and133 bps YoY due to softening in crude oil prices. Vinyl Acetate Monomer (VAM)is the key input of products which is co-related to crude oil price. Decline in rawmaterial prices by 4.2% YoY has resulted into, EBITDA improving by 15.2% YoY and 65.4% QoQ.Other Expenses/Sales has fallen by 8.5% QoQ because of no cost on advertisement incurred during Q1FY17. The company has reported net profit growth due to high EBITDA margin and high other income (up 72.9% YoY). The improvement in net profit margin by 97 bps YoY resulted into NPM of 16.0% in Q1FY17 Vs 15.0% in Q1FY16
Valuation and Outlook : Strong margin performance and near monopolistic position with ~70% and more than 50% market shares in flagships brands of Fevicol and Dr. Fixit, respectively, growth story of the company is intact. Besides, continuing product innovation, focus on special chemical business, brand building having hired Mr. Amitabh Bachchan as Brand Ambassador, make products premiumized. We value the company at P/E 48.0x to FY18E EPS which is currently trading at PE 40.1x of FY18E EPS and reiterate our “BUY” recommendation with target price of Rs. 840 representing potential upside of 20%
Diversification of Product Portfolio to Fuel Growth prospects: Exports to be a key driver - Aided by higher penetration in the passenger marketto luxury OEMs like BMW, Mercedes and Nissan, Suprajit has procured new orders for their cables division which is expected to be recorded in FY18E. Currently, thegeographical mix for SEL (incl Phoenix) stands at 65.0% domestic and 35.0% global, as compared to 34.0% for exports during Q4FY16.
Valuation and Outlook : At CMP of Rs. 191, the stock is currently trading at 11.9x FY18E EV/EBITDA. With increasing exports and the synergies expected to arise on account of Phoenix acquisition, we value the company at 13.5x EV/EBITDA having a target price of Rs.224 with an upside of 17%. Therefore, we recommend “BUY” rating on SEL with a target price of Rs.224 having an upside potential of 17%.
JBCPL, one of India's leading pharmaceutical companies, manufactures and markets a diverse range of pharmaceutical formulations, herbal remedies and APIs. JBCPL exports to many countries worldwide with a strong presence in in Russia, Ukraine, CIS countries and South Africa.
The income from operations in FY16, which was the highest in a decade, registered a growth of a 9.7% y-o-y. The company which has seen better profit margins in the past (read: FY10 and FY11), exhibited an operating profit margin of 16.4% and a net profit margin of 12.2 During the year, Biotech Laboratories (Pty.) Ltd., South Afri subsidiary of the company, with company’s interest going up to 95.24% from 49%. This strategic investment will allow the Company to expand its business in South Africa and SADC countries, which hold good growth potential.The domestic formulation business which somehow managed to contribute 35% in the Q4FY16, grew almost 31% q-o-q, contributing a beefy 43% last quarter i.e., Q1FY17. The volatile currency situation cast down the exports, which rendered a decline of 11.2% q-o-q.
mom). Lower prices were recorded for vegetables (7.5% mom) and fibre (2.2% mom). Cereals,oilseeds,andmeatregisteredhigherprices. Mutedriseinmanufacturinginflation:Thiswasup20bpsmomledbydropincommodity prices and persisting weak demand. 9/12 (vs. 8/12 last month) industries recorded higher prices. Higher prices were seen in food products, beverages, textiles, paper & paper products, wood & wood products, rubber & plastic products, chemicals, non metallic mineral products, cement, and transport equipment; prices fell for metals and leather & leather products. Core inflation rose to 0.5% vs. 0.1% last month; we expect it to remain...
fuel prices. Barring fuel and food, inflation was on the higher side in other segments. Food inflation fell by 0.4% mom (lowest in six months); higher prices were seen in cereals (0.6% mom),proteinitems(0.5to1.3%),veggies(3.7%),pulses(1%),andsugar(+1.4%;up22.5% since October 2016). Segments that registered higher inflation were tobacco, clothing,...
