We maintain our BUY rating on Mirza International with a TP of Rs215 (20x FY20E EPS). Growth in domestic revenue continues to be strong double digit on the back of traction in sports shoes and lower price point Bond Street. Management plans to focus on North India market for sports shoes and also on online-offline stores which they plan to scale to 70-100 store over next 1 year. Entry in the women footwear segment is a logical extension which would bear fruits over next 2 years as the management is targeting to sell 0.5mn pairs. Further they have received upholstery orders from China which would boost tannery sales which has been declining. While...
We maintain our BUY rating on Mirza International with a TP of Rs215 (20x FY20E EPS). Growth in domestic revenue continues to be strong double digit on the back of traction in sports shoes and lower price point Bond Street. Management plans to focus on North India market for sports shoes and also on online-offline stores which they plan to scale to 70-100 store over next 1 year. Entry in the women footwear segment is a logical extension which would bear fruits over next 2 years as the management is targeting to sell 0.5mn pairs. Further they have received upholstery orders from China which would boost tannery sales which has been declining. While...
Q3FY18 result highlights: Revenue was up 22.1% YoY to Rs2272mn on the back of healthy 20.4%YoY revenue growth in core recruitment business and 31% YoY growth in 99acres. Operating profit was up 68% YoY (6% below expectation) on the back of low single digit growth in employee cost and admin cost. A&P; spends was up 39% YoY on higher marketing for 99acres and jeevansaathi. Adj PAT was up 49% to Rs703mn on healthy operating profit. Slowdown in IT sector could hurt recruitment business: Billing growth in the recruitment business was mere 13.2% despite revenue growth of 20% as the...
Subdued cashflow and return ratios outlook intact; SELL JK Lakshmi Cement (JKLC) delivered 25%/14%/13% standalone revenue/EBITDA/PAT growth in Q3FY18. Ramp-up in east buoyed volume growth to 15% YoY. However, high energy and freight cost inflation amid lack of operating leverage gains offset realisation benefits, leading to subdued EBITDA of Rs447/MT. We maintain our anticonsensus SELL on the stock with a revised TP of Rs340, as we see (1) volume growth tapering off to 2% CAGR during FY19/20, (2) subdued operating cashflow to mute...
We maintain our BUY rating on DB Corp with a target price of Rs435 as we roll forward to FY20E and value the company based on our conservative Adj. OCF based methodology. Ad growth declined during the quarter on the back of early festive season and higher base in last year pertaining to private treaty. We expect the ad growth to bounce from Q4FY18 while circulation revenues would be double digit given the aggressive expansion in the state of Bihar, Gujarat and Rajasthan. Despite decrease in margins, we have modelled margin expansion on...
We downgrade Tata Sponge (TSIL) to Hold with a revised TP of Rs1165 as recent sharp run-up leaves limited upside on the table given the fact that surplus cash on books would be deployed as CWIP for steel plant capex over FY19-20E. TSIL's spreads in sponge iron business have continued to improve and outlook on the sustenance of the same is strong which gives confidence of smart uptick in earnings over FY18-19E. Q3 earnings were strong YoY led by better pricing and company remains on track to achieve its full year volume targets. Stock trades at FY19E EV/EBITDA of 4.9x and a five year AOCF/EV yield of 6.8% which is fair....
UltraTech's (UTCEM) Q3FY18 standalone EBITDA rose 14% YoY buoyed by 35% YoY volume growth (core volume up 14% YoY) as UTCEM capitalised on strong demand from infrastructure and low cost housing and as it has been efficiently ramping up the JPA's acquired assets. Aggressive volume push resulted in flattish NSR YoY. Improving energy consumption and logistics efficiencies partly moderated impact of rising energy cost YoY. Amid improving demand outlook, we expect UTCEM to deliver 15% volume CAGR during FY17-20E, largely led by capacity ramp-up of the acquired assets. We also expect UTCEM's...
We upgrade DCB Bank (DCBB) to BUY (Hold earlier) with TP at Rs215. Q3'18 results were in-line with our estimates on both revenue / earnings front. Loan growth has gathered pace (7% QoQ / 28% YoY) - an outcome of a) improvement in core SME, retail segment and b) better branch productivity. Acceleration therein will aid in curtailing overall cost/income ratio lower. While Q3'18 slippages were a tad higher (2.2% of loans), we expect normalisation therein; trend in recovery / upgrade remains solid and is an added comfort. We expect return ratios - RoA / RoE to inch towards...
Valuation and key risks: We see strong scope for re-rating and ADL using our conservative five-year AOCF/EV yield method to arrive at a TP of Rs940, implying an upside of 25% over CMP. We expect the company to report RoE of 23% and RoCE of 15% for FY20. ADL outscores many of its peers due to its efficacious presence in the domestic and emerging markets and its integration across the value chain. Key risks to our call include slowdown in the domestic market and regulatory risks for its...
We retain Buy on Karnataka Bank (KBL) and revise our TP upwards to Rs240 (valued at 1.3x FY20E ABV). Q3'18 results surprised on upside with a) strongest ever loan growth (24.1% YoY / 8% QoQ) ; b) further expansion in margins (3.04%; 25bps YoY) c) decline in slippages-run rate (1.9% annualised) and d) stressed asset portfolio down to 7%. Commentaries on each of the above key parameters remain encouraging and we have factored the same into our estimates. This is even as near-term earnings are set to remain under-pressure following accelerated provisions. We have introduced FY20 estimates and see our RoE's...
