We maintain our BUY rating on Mirza International with a TP of Rs205 (23x FY19E EPS). We believe management's plan to enter into the women footwear segment will be value accretive in medium term and mitigate the decline from the export markets. Growth in the domestic market continues to be healthy at 76% YoY. Online sales have started to contribute substantially and hence management has started a store with online pricing and plans to further expand the same. Operating margins will continue to expand with the growth in domestic business as they have higher gross margins....
We downgrade the stock to Hold with TP of Rs550 (earlier TP Rs555) as we value the company on our conservative Adj. OCF/EV yield based methodology. While the revenue growth has bounced back in the quarter on the back of re-stocking and healthy festive season demand along with margin expansion, competitive intensity continues to remain high. Our channel check suggests that both Borosil and Cello have launched new designs in the market and continue to offer higher trade margins. Uncertainty regarding use of cash on books while valuations at 41x/31x...
High cost inflation, lower power sales continue to hurt Shree Cement's (SRCM) EBITDA declined 20% YoY in Q2FY18 despite 9%/1% YoY cement volume/NSR increase. This was driven by rising petcoke prices and higher diesel price, which led to unitary EBITDA declining 21% YoY (on high base of last year) to Rs1,107/MT. Continued sharp decline in external power sales amid high fuel inflation, further contributed to the decline in total EBITDA. While we expect SRCM to deliver 19% EBITDA CAGR over the next two years and also fund its aggressive expansion through internal accruals, its valuation remains extremely expensive at...
We retain Hold on CUBK with TP at Rs150 (valued at 2x FY19E ABV). Q2'18 results beat our estimates on all fronts strong NII / further expansion in NIM / healthy PPOP and respectable profits. The trend in slippages seems to be stabilising; overall stressed asset portfolio (GNPA + restructuring) at 3.1% of loans, remains lower amongst peer set banks. We continue to like CUBK for its growth strategy, capital position and...
We maintain buy rating for Cipla and revise our TP to Rs700 (earlier Rs610) based on 24x March'19E EPS of Rs29.2. Cipla's Q2FY18 results exceeded our and consensus estimates. Cipla's revenues grew 9% YoY, margin improved 160bps to 19.7% and net profit grew 18% YoY. The acquired Invagen and Exelan in the US are well-integrated with Cipla. The domestic business (40% of reveues) grew 12% YoY and 30%QoQ due to re-stocking by trade after successful implementation of GST. Steady growth in the domestic market, with leadership position in...
On right track with revenue growth and margins expansion We maintain our Hold rating on IFB Industries with a revised TP of Rs790 (28x FY19E EPS). We believe that positives of the current quarter are captured in the stock price post the steep 25% rally in last one month. We increase our target multiple factoring re-rating in the consumer durable sector post the healthy revenue growth across players. Increasing distribution reach strategy of the management to drive volume growth has started to bear fruit with strong growth across categories. New product launches coupled with mix change and domestic manufacturing would drive margins...
We retain Hold on Ujjivan with TP revised upwards to Rs370 (earlier Rs350). Q2FY18 earnings saw an improvement over the last quarter on the business front (disbursements up 14.8% QoQ) and asset quality side (GNPA at 4.99%, down 110bps QoQ also aided by w/offs). Transition to Small Finance Bank (SFB) model has gathered further momentum with reach now extended to 92 branches (vs. 15 in Q4'17). H2FY18 promises to be better over H1'18 on back of improved business environment and better controls. The near term earnings, however are expected to remain volatile as Ujjivan provides for portfolios overdue. We have tweaked our estimates for FY18-19E....
Valuation and view: Q2'18 result beat our estimates on all fronts; we expect momentum therein to continue and have tweaked our estimates to that extent for FY18E/FY19E. In our recent note we had argued for premium valuations for Sundaram Finance, we see that continuing. Retain Buy with SOTP based TP at Rs2,030 (vs. earlier Rs2,000). Value un-locking in the non-financial investments through the demerger process into a separate entity (and subsequently listing of the entity) could add ~10% to our existing SOTP. Key risks: Lower than expected...
We maintain buy on Hindalco (HNDL) and revise our TP to Rs315 (vs Rs250 Earlier). HNDL's domestic aluminium business remains a solid operational performer despite adverse coal and carbon cost headwinds (EBITDA/t at US$452). Utkal's EBITDA was the strong at Rs2bn while Novelis' performance improved further (EBITDA/t at US$377). We like HNDL on account of i) strong earnings visibility from low cost aluminium asset base with low cost coal & bauxite supply in place, ii) increase in the EBITDA contribution from Novelis with strong guidance, iii) strong capex discipline resulting in high FCF generation, and iv) accelerated reduction in net debt/EBITDA...
Good show despite weak demand in south; Retain Buy We maintain our Buy rating on Ramco Cements (TRCL) and with a revised TP to Rs790. During Q2FY18, despite weak demand in Tamil Nadu and Kerala markets, TRCL delivered 6% YoY volume growth and unitary EBIDTA of Rs1229/MT (though down 21% YoY on its peak performance last year). We remain bullish on the company owing to strong demand outlook for AP/Telangana and east markets, and expected recovery in Tamil Nadu and Kerala markets. Despite weak demand in south, TRCL delivered 6% YoY volume growth: In...
