Management interaction takeaways - Strong growth ahead We recently had a detailed interaction with senior management of IFGL refractories and key takeaways were i) Revenue growth at an inflection point with consolidated topline growth expected at 15%+ for FY19E led by pricing growth of 5-7% and volume growth of 8-10%), ii) well invested asset base with completion of recent expansions at domestic as well as overseas operations placing IFGL favourably to meet increased demand and gain market share globally and iii) operating leverage benefits improving the margin profile. Management also...
Source: Bloomberg, Centrum Research, *as on 8th June 2018 Recommendation and key risks: We have revised our FY19E and FY20E EPS downwards by 41% and 43% respectively. We downgrade MPL to Hold from Buy rating, with a TP of Rs31 based on 18x March'20E EPS of Rs1.7, and a 10.2%% upside from CMP. Key positive upsides would be additional ANDA approvals from US FDA...
Source: Bloomberg, Centrum Research, *as on 8th June 2018 Recommendation and key risks: We have revised our FY19E and FY20E EPS downwards by 41% and 43% respectively. We downgrade MPL to Hold from Buy rating, with a TP of Rs31 based on 18x March'20E EPS of Rs1.7, and a 10.2%% upside from CMP. Key positive upsides would be additional ANDA approvals from US FDA...
We re-instate our coverage on Coal India (CIL) and rate it Buy with a new TP of Rs375. We are enthused by the progress made by CIL in last six months in successfully tackling multiple headwinds around employee wage costs and FSA realisations and we expect CIL to deliver strong earnings growth over FY18-20E led by i) better demand and volume CAGR of 6%, ii) robust FSA pricing on the back of recent price increases and better grade compliance and iii) strong share of eauction volumes at 18% of total volumes coupled with higher realisations supported by favorable global coal prices. Stock trades at inexpensive valuations of 6x FY19E EV/EBITDA despite attractive return rations and we expect strong case...
We retain Buy on Sundaram Finance (SUF) and revise our SOTP based TP upwards to Rs2,240. The upward revision to TP follows a) second successive year of 15%+ YoY growth in AuM b) improved profitability (adjusted PAT grew 16% YoY) and c) superior asset quality (GNPA at 1.29%, industry best). Subsidiaries - housing finance, AMC and general insurance remain profitable and contribute meaningful to overall earnings. Commentaries on growth, earnings and asset quality remain encouraging and we have factored the same into our estimates. Valuations...
We maintain our Buy rating on Aurobindo Pharma (APL) and revise TP to Rs1,070 (earlier Rs1,170) based on 18x March'20E EPS of Rs59.3. The company's Q4FY18 revenues and net profit were in-line with our expectations. However, EBIDTA margin was below expectation. APL's sales grew 11% YoY, margin improved 10bps to 19.9%, and net profit declined by 1% YoY. APL's two manufacturing units IV and XII have been cleared and received EIR from US FDA. Its specialised segments such as injectables, penam, microspheres, hormones, oncology, vaccines, neutraceutical, depot injections and peptides would improve margins...
We maintain our BUY on Sarla Performance Fibers with a revised TP of Rs67 as we value the company based on our conservative adj. OCF based methodology. We expect the domestic volumes to grow by high single digit on the back of increasing capacity in the industrial/performance yarn segment by 700MT while the Nylon66 capacity would be increased to 1600MT from H2FY19. Further the company could take marginal price hikes to mitigate the impact of increase in RM prices. Operating loss of Sarla Flex to reduce to Rs45mn in FY19E from Rs104mn in FY18 would add to margins. Lower debt, improving working capital further gives us comfort while...
We maintain our BUY rating on Dish TV and revise our TP to Rs94 (8x FY20E EV/EBIDTA) for the merged entity. While the quarterly performance was disappointing with mere 0.2mn net subscriber addition and 5% sequential decline in revenue, overall results are not comparable. We believe the operating performance would improve significantly on merger synergies, regulatory tailwinds and economic uptick. We believe execution would be the key going forward for the management with merger being completed. Undemanding valuations, Rs37bn...
Rs1.35bn new greenfield plant a long term positive We maintain our Buy on La Opala with TP of Rs353 and value the company on our conservative Adj. OCF/EV yield based methodology. We believe the company would continue to post strong double digit volume growth in the opalware segment on the back of affordable pricing and significant under penetration of the category. Further announcement of setting of new plant at a cost of Rs1.35bn would help the company increase capacity from current 25K MT to 37K MT which we believe would be utilised over ~2.5 years and the commercial production would start from Sep'19. Further the...
Levers in place to achieve Rs6bn domestic sales guidance We maintain our BUY rating on Mirza International with a TP of Rs205 (20x FY20E EPS). While management has achieved its FY18E guidance of Rs4bn domestic sales, they have further guided for Rs6bn sales for FY19E on the back of new product launches and entry into women footwear. They believe the 100 online-offline large format stores have the potential to generate Rs30mn sales each which would offer them significant upside. Further sports shoes and Bond Street have contributed 30% to the domestic footwear sales which would further grow in FY19 as they launch new...
