We maintain our Buy rating on Hero MotoCorp with TP of Rs3,810 as the company reported a decent performance despite headwinds such as intense price war, increasing cost of ownership for 2Ws, expiry of Haridwar plant benefits and RM cost pressure. The management re-iterated their confidence of double digit growth in the industry considering favourable macros. To sharpen its edge over competition and plug the gaps in its product portfolio, the company has already launched its new premium segment bike Xtreme 200R and is all set to launch scooters with 125 cc. Q2FY19 performance was in-line with our estimates at operational levels, however PAT...
We retain Buy on Karnataka Bank (KBL) with TP at Rs160. Q2'19 results were a mixed bag. While lower than expected margins, higher slippages were a few negatives; we draw greater comfort in strong loan growth with increasing share of high rated portfolio, continued traction in fee income and further reduction in stressed asset portfolio. We remain convinced on the KBL transformation journey and believe that valuations at 0.6x...
We maintain Buy on Tata Sponge (TSIL) with a revised TP of Rs1160. Q2 results were weak due to exceptional circumstances which led to high iron ore and maintenance cost. Overall, we expect strong operational performance during FY19-20E led by robust pricing, healthy spreads and increasing volumes as additional EC clearance of 40ktpa is expected soon. Clarity on capex towards the build-up of new steel complex is still elusive but strong cash rich balance sheet...
We reiterate Buy on Coal India (CIL) with revised TP of Rs365 as we expect re-rating with market finally appreciating the structural improvements like improved coal quality, better evacuation, significant increase in auction linked volumes and sharp reduction in working capital which provide strong earnings/cash flow visibility. We also expect strong upside to e-auction realisations given the strong global coal prices, weak rupee and strong underlying demand (from both power & non-power) which is expected to mitigate the headwind of higher diesel prices. Concerns around divestment capping stock returns in near term are overdone as...
We recently organised a Management Meet of Abbott India (AIL) for our clients and came out with a positive note. We maintain Hold rating for AIL due to rich valuations. We maintain TP of Rs7,250 (earlier TP Rs7,250) based on 24x March'20 EPS of Rs302.2. AIL is committed to variety of services and has a value added model. We expect margins to improve post the launch of new products and with the company's thrust to the high-margin vaccine segment. Abbott in India has presence in 80-90% of the therapy areas. AIL's top 10 brands contribute 72% of its revenues....
Bajaj Auto has introduced an exciting new opportunity in form of 5-5-5 offer to buy Bajaj motorcycles in India. This offer commences from October 5, 2018 where customers get the benefit of five years of free own damage insurance cover, five free services and five years of free warranty on select Bajaj motorcycles (Platina, Discover, Pulsar and the V range of motorcycles) across all dealerships in India at no additional cost. Bajaj Auto is the first in the industry to introduce such an offer through the 5-5-5 scheme. One of the key benefits of this offer is five years of free own damage insurance cover for customers buying these bikes. We believe that...
ICICI Bank board today announced for a) appointment of Mr. Sandeep Bakhshi (currently COO) as MD & CEO of the bank for 5 years (subject to regulatory and other approvals) and b) accepted the early retirement request by Ms. Chanda Kochhar. The change of guard, in our view, puts to rest concerns around leadership. The enquiry instituted against the out-going MD continues and one awaits the outcome on the same. Focus shifts to asset growth and resolution of certain large NPA accounts. Capital position remains healthy; subsidiaries remain profitable. Valuations continue to remain undemanding. Retain BUY with SOTP...
We maintain our Buy rating on Aarti Drugs (ADL) and retain the TP to Rs910 based on 16x March'20 EPS of Rs56.8. ADL is the market leader in 9 out of 10 APIs manufactured by the company. That said, the company is likely to benefit from vertical integration which is likely to drive future growth. We expect margins to improve post the launch of new products and additional capacities of Ciprofloxacin and Metformin APIs in place. Key risks to our assumptions include...
We hosted Visaka Industries' (VIL) management for a non-deal roadshow. The management guided that good demand across all three business segments (ACS, CBP and Yarn) has accelerated growth outlook for FY19. However, the INR depreciation during Q2FY19 and rising diesel prices will drag down ACS as well as total margin in Q2FY19. Management expects to pass on this cost increase during H2FY19, through price increase (aided by robust demand in ACS). VIL's innovating and patented product ATUM is expected to go on sale from Q3FY19. We remain positive on VIL owing to its strong positioning across all...
Star Cement today announced receipt of Rs252mn of cash from the Central Government towards the freight subsidy backlog (under the NEIIPP scheme). The subsidy backlog clearance has accelerated over the past 12 months which has considerably reduced the outstanding on Star's books thus strengthening its balance sheet. We remain positive on the company owning to strong demand and pricing outlook for the North-East region, which should sustain its superior profitability. We reiterate BUY with a TP of Rs162. Acceleration in receipt of subsidy cash over the past 12 months: Star Cement...
