Star Cement's Q4FY18 consolidated EBITDA moderated 15% YoY on a high base, owing to expiration of freight subsidy and other non-recurring cost during Q4FY18. Star's reported unitary EBITDA of Rs1801, is still double the industry average. Strong demand and pricing in the NE region alongwith stable fuel costs should sustain Star's industry leading margins despite the expiry of its freight subsidy. Robust earnings along with faster clearance of subsidy backlog by central government should accelerate free cashflow generation and should support Star's 20%+ RoE/RoCE. We reiterate BUY with a revised TP of Rs167. Q4FY18 North East sales rebound; profit moderated on cost increase: Star's total...
Vardhman Textiles Ltd (VTL), for Q4FY18, on a consolidated basis, reported EBITDA margin expansion of 45bps YoY (up 359bps QoQ) to 17.2%, in-line with our expectation. Margin expansion was aided by lower raw material cost (down 269bps to 51% of sales). Revenue declined by 5% to 1,510 crore, on the back of lower sales volume (Yarn down 6% to 50,110 tonne and grey & processed fabric down 7% to 730 lakh metres). Net profit grew 3% to 164 crore. Management View: Maintained long term EBITDA margin guidance of 18-22%. Recommendation: Since our Q3FY18 result update (6 Mar'18 @ 1,309, Rating...
We maintain our Buy rating on Aarti Drugs (ADL) and revise the TP to Rs960 (earlier TP Rs940) based on 16x March'20 EPS of Rs60.1. AIL's Q4FY18 results exceeded our expectations. The pharma major's revenue grew 3% YoY, margin improved 260bps to 17.1% and net profit grew 10% YoY. 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 coming on stream. Key risks to our assumptions include slowdown in the domestic pharma market and regulatory...
We maintain our BUY rating on DB Corp with a revised target price of Rs368. We believe the ad growth for the company in FY19E would be back ended driven by volumes and uptick in selective categories. Further the company would benefit in medium term as the increase in circulation would translate into readership leading to ad yield increase. Circulation revenue would continue to grow at double digit on the back of increase in copies while new radio stations have turned ebidta positive in Q4FY18 translating in margin expansion. We believe near term margins would be impacted with steep increase in newsprint prices....
We maintain buy on Hindalco (HNDL) and revise our TP higher to Rs350 (vs Rs315 earlier). HNDL's domestic aluminium business remains a solid operational performer despite adverse coal and carbon cost headwinds due to strong integration. Q4 performance was solid with aluminium business (incl. Utkal) delivering highest ever EBITDA of Rs12.7bn. Novelis' performance improved further with highest ever EBITDA/t of US$396 driven by higher automotive product sales. 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...
We reiterate Buy on JK Cement (JKCE) and with a revised TP of Rs1,180. During Q4FY18, while strong volume growth across both grey (+29% YoY) and white/putty (+11 YoY) drove 28% standalone revenue increase, grey realisation remained insufficient to pass on the cost inflation. Thus, EBITDA fell 5% YoY. On a downward revised PAT base of Q4FY17 and led by lower interest expense, PAT surged 105% YoY. JKCE's reduced debt on books leading to net D:E reduction to 1.1x in FY18 vs 1.6x YoY. We remain bullish on the company owing to stable outlook for white/putty business and increasing demand...
Growth across all key markets; maintain Buy We maintain Buy rating on Lupin with TP to Rs930 (earlier Rs1,050) based on 23x March'20 EPS of Rs40.4. Lupin's Q4FY18 results were lower than our and consensus estimates due to pricing pressure in the US generic market. Lupin's revenue declined 5% YoY, margin declined 80bps to 17.6%, and net profit before EO item grew by 80%. The pricing pressure in the US has eased out due to discontinuation of several generic products by Teva and Sandoz. We believe the company's robust growth across key markets coupled with its strong pipeline of 163 pending ANDAs...
We maintain our Buy rating on Abbott India (AIL) and revise the TP to Rs7,530 (earlier TP Rs7,030) based on 24x March'20 EPS of Rs313.6. AIL's EBIDTA for Q4FY18 was lower than our expectations whereas net profit was higher than our expectations. The pharma major's revenue grew 10% YoY, margin improved 470bps to 13.5% and net profit grew 138% YoY. That said, the company's eleven leading brands grew faster than the market and are likely to drive future growth. We expect margins to improve post the launch of new products and with the company's entry into the high-margin vaccine segment. AIL is a debt-free cash...
Focus shifts at scaling retail liability franchise We lower our rating on Ujjivan to HOLD with TP at Rs430. Since our last note (Q3'18) the stock is up 34% on expectations of improved loan growth, receding asset quality and slow yet steady progression towards the SFB transition. Q4'18 results saw each of these aspects play out well. Growth guidance has been revised upwards; asset quality improving and we have factored the same into our estimates. Traction on retail liability franchise and higher growth in non-MFI portfolio remain key focus area . While we continue to like Ujjivan model, valuations...
Golden times continue getting better, retain Hold We continue to remain positive on prospects of Graphite India (GIL) led by our view of electrode industry remaining in an upcycle for next few years as postulated in our recent sector report. We continue to expect extremely strong earnings trajectory for GIL in next few years with peak earnings in FY19E and moderation kicking in from FY20E. GIL remains the best bet to play the electrode upcycle with healthy balance sheet, strong adj. FCF generation, high dividend payout and strong management pedigree. Q4 results were well above expectations and...
