Aditya Birla Money Limited Broker Research reports

MARKET SNAPSHOT

ABB, in its annual report, highlighted its growth strategy to continue targeting
high growth profitable markets that benefit from key megatrends. The
company’s improved penetration into Tier II and Tier III cities, higher
localization efforts, benefits from global feeder factories for exports, and
improved product portfolio are helping it expand its presence across markets
spanning 23 market segments.

Nexus REIT has renowned sponsor (Blackstone Real estate fund with global real estate AUM of US$326 billion spread across 1,475 msf of leasable area with global expertise and local knowledge (15 years operating experience in India).

MPL focuses primarily on the domestic market (98% of sales) with market share increasing from 4.1% to 4.3% over FY20 - MAT Dec’22 with sales growing at 12% CAGR v/s IPM (Indian Pharmaceutical Market) growth of around 10% for the same period.

SBI Cards & Payment Services (SBIC), a JV between SBI & CA Rover Holdings (Carlyle Group) is launching an IPO with OFS of 130.5mn shares (~` 98.5 bn) and fresh issue of ` 5 bn. It is the 2nd largest credit card issuer in India with market share of ~18% and the largest co-brand credit card issuer, having partnerships with several major players. It is a play on improving...

Ujjivan Small Finance Bank Ltd (USFB), promoted by Ujjivan Financial Services Ltd (UFSL), is a mass market focused small finance bank (SFB), catering to the unserved & underserved segment. USFB is doing an IPO to meet the RBI regulation which requires the SFB to list within a period of 3 years. Currently, the holding promoter company UFSL is listed which will have 83.3% stake in USFB post IPO. As per RBI guidelines, the promoter is required to reduce its shareholding in SFB to 40% within a period of 5 years from the date of commencement (1st Feb, 2017 for USFB) of business operations. This could act as an overhang on the stock. However, once the IPO process is completed, USFB will consult the RBI on the reverse merger...

Incorporated in 1996, Polycab India Ltd (Polycab) is the largest manufacturer of cables and wires in India. It also has presence in FMEG segment, offering products like fans, LED lightings, switches, switch gears, solar equipment, luminaires etc. It operates under brand POLYCAB. It is a market leader in wire and cable industry with 18% market share in organized market and 12% of overall industry. It reported revenue of ~`68bn which has grown at a CAGR of 14% over FY16-18 while its EBITDA and PAT has grown at a CAGR of ~23% and ~42% respectively over FY16-18 at ~`7.4bn and ~`3.7bn respectively. Company is coming with an IPO of ~`13.5bn...

Incorporated in 1996, Polycab India Ltd (Polycab) is the largest manufacturer of cables and wires in India. It also has presence in FMEG segment, offering products like fans, LED lightings, switches, switch gears, solar equipment, luminaires etc. It operates under brand POLYCAB. It is a market leader in wire and cable industry with 18% market share in organized market and 12% of overall industry. It reported revenue of ~`68bn which has grown at a CAGR of 14% over FY16-18 while its EBITDA and PAT has grown at a CAGR of ~23% and ~42% respectively over FY16-18 at ~`7.4bn and ~`3.7bn respectively. Company is coming with an IPO of ~`13.5bn...

HDFC Asset Management Company Limited (HDFC AMC) operates as a joint venture between HDFC and Standard Life Investments Ltd. The company had total AUM of ` 2.92 tn (second largest with market share of 13.7%) as of FY18 with profits growing every year since the first full year of operations in 2002. In terms of equity oriented AUM and individual customer proportion, HDFC AMC has consistently been the largest AMC of India with market share of 16.8% and 15.7% respectively as on FY18. HDFC AMC has consistently been the most profitable AMC in India since FY13 owing to high proportion of equity oriented AUM, cost efficiency and diversified product mix distributed through a multi-channel distribution...

Indostar Capital Finance Ltd (Indostar) is a non-deposit taking NBFC having major exposure to i) corporate credit, followed by ii) SME, iii) vehicle finance and iv) housing finance. IndoStar has been sponsored by financial institutions such as Everstone Capital, Goldman Sachs Group, Baer Capital Partners, ACPI Investments, and CDIB Capital International Corporation. Strong promoter provides strong capital sponsorship and professional expertise to Indostar. Over the span of 6 years, IndoStar has built its Corporate lending business (76.8% of total credit as on Q3FY18) and has cemented relationships with large corporates. The company had then forayed into the SME segment in 2015 (22.7% of credit as on Q3FY18) and now it...

HDFC Life Insurance Company (HDFC Life) is the second largest private insurer based on shareofNewBusinessPremium(NBP)andisthemostprofitablelifeinsurer,basedonValue of New Business (VNB) Margin. Established in 2000 as a joint venture between HDFC and StandardLifeAberdeen,thecompanyhasacomprehensiveproductportfolioof32individual and10groupproducts,includingarangeofprotectionandsavingsproductstoaddressthe insurance needs of diverse customer segments. In terms of distribution strength, it has 66,372 individual agents (which comprise 6.8% of all private agents in the Indian life insurance industry) and has 125 banking tieups including HDFC Bank giving access to the...

Godrej Agrovet Ltd. (GAVL) is an Agro based company with focus on research and development. It operates across five business verticals namely animal feed, crop protection, oil palm, dairy and poultry & processed food. It is a ~75% subsidiary of Godrej Industries. GAVL's revenue has grown at a CAGR of ~16% over FY13-17. GAVL is coming with an IPO of about `1157cr. out of which `292cr. is the fresh issue and remaining OFS. The post Issue market capitalisation at the upper band of `460 is expected to be `~8800cr. We recommend SUBSCRIBE on the...

Pratap Snacks Ltd. (PSL) is one of the India's fastest growing Indian snack food companies. PSL has a PAN India presence offering diversified snack portfolio which includes Extruded snack, Chips and Namkeen. Company owns and operates under the brand Yellow Diamond. PSL's revenue has grown at a CAGR of ~27% over FY13-17. PSL is coming with an IPO of about `482cr. out of which `200cr. is the fresh issue and remaining OFS. The post Issue market capitalisation is expected to be `~2200cr. We recommend SUBSCRIBE on the issue for long term as well...

Incorporated in 1996, AU Small Finance Bank Limited (AUSFB) has transformed over the years from being a channel partner of HDFC Bank, then an auto NBFC, a diversified retail NBFC and now a small finance bank. Having significant presence in Rajasthan, it has established itself as a preferred lender to the underserved segment in areas of vehicle, SME and MSME finance. It is highly focused on low and middle income individuals and businesses in rural, semi-urban and outskirts of urban markets that have limited or no access to formal banking and finance channels. The company is...

Incorporated in 1999, Central Depository Services (India) Limited (CDSL) is a subsidiary of BSE which operates as a securities depository in India. As on April 2017, it has 589 DPs, servicing across 29 states and 7 union territories. The number of service centres grew at CAGR of 21.4% from 11,877 in FY15 to 17,489 in FY17 and beneficial owner (BO) accounts grew at a CAGR of 13% from 9.6mn in FY15 to 12.3mn in FY17. The company is coming out with an IPO which is 100% offer for sale. BSE is selling its stake to meet the...

Avenue Supermarts Ltd's (ASM) D Mart is second largest and the most profitable retailer in India. It opened its first store in Mumbai in 2002 and it has a total of 118 stores as of 31st January, 2017. It is present across 45 cities in 9 states and one union territory with majority of stores in Maharashtra (59). It has a retail business area of 3.57mn. sft. as of 31st December, 2016 with size of stores ranging from 10,000 sft. to 60,000 sft.. It predominantly operates on ownership model in most of the stores. ASM's revenues have grown from `47bn. to `86bn. over FY14-16 at a CAGR of...

Music Broadcast Ltd. (MBL) is an oldest private FM radio broadcaster in India. It operates under brand Radio city in 37 cities with 2 more in pipeline. It has a listenership base of ~5 crore in 23 cities for which record is available. Radio City 91.1FM holds number one position in most of the markets where it operates. Its revenue, operating profit and profit has grown at a CAGR of 19%, 32% and 54% respectively over FY13-16. MBL is coming out with a public offering worth Rs 488.5...