View: Steady growth in retail channel; Maintain Accumulate Bata's Q1FY20 financial performance was in line our estimates. Despite slowdown in most of the consumer categories, the company was able to post strong growth due to new campaigns and attractive product launches during the quarter. The e-com business posted double digit growth, which was encouraging considering its moderate performance in Q4FY19. The retail channel continues to grow steadily aided by premiumization. We have broadly maintained our FY20E and FY21E EPS estimates at ` 27.9 and...
Exide's Q1FY20 results were ahead of our estimates. The net revenue was ` 27.8bn (+0.2% YoY on a high base) (vs estimate of ` 25bn), as the increase in revenue from the automotive replacement and industrial segments, was offset by fall in lead prices and weak OEMs sales. The EBITDA was ` 4bn (+4.3% YoY), with expanded margin at 14.7% (+57bps YoY/+31bps QoQ) due to a decline in lead prices, a better product mix, and cost control measures. The APAT grew 7% YoY to ` 2.25bn in Q1FY20. We expect Exide to benefit from: 1) further improvement in the...
Inline Q1, good defensive stock; Maintain Buy PGCILs Q1FY20 results were in line with our estimates. The capex was `29bn and capitalization was ` 14.7bn in Q1. PGCIL is a good defensive stock, with growth built in by the strong capitalization, which has reached a peak in recent years. This should lead to stronger cash flows. It has maintained capex and capitalization guidance given in the beginning of the...
Margins impacted due to RM volatility. Story remains intact. Maintain BUY Astral Poly Technik (ASTRA) Q1FY20 numbers were in line with estimates on revenue and profitability parameters. Piping segment (including Rex) reported volume growth of 41.2% YoY and revenue growth of 37% YoY. Adhesive segment reported flattish growth due to few structural changes in Resinova, which will be corrected in current quarter and management has guided for double digit growth for FY20. Margins got impacted due to inventory losses of approx. ` 70-80 mn. We believe that inventory losses...
View: EBIT margin improvement in cigarette business; Maintain Buy. ITC's Q1FY20 results were broadly in line with our estimates. The cigarette business posted +3% YoY volume growth, below our estimate of 5%. However, increase in margins in the cigarette business was encouraging. Despite sluggish demand in Q1, ITC's FMCG business reported a 6.6% increase in topline and 80bps expansion in margin. We have maintained our FY20E and FY21E EPS estimates at ` 11.4 and ` 12.2, respectively. In our view, the stock is trading at a steep discount to peers and is an...
Easing of copra prices aided margin improvement. Maintain Accumulate. Marico's Q1FY20 revenue was in line with our estimate, but EBITDA and APAT was a beat. Volume growth was 6%, on a base of 12.5% growth. Although volume growth in Parachute was impressive at 9%, Saffola posted mere 3% volume growth. VAHO reported improvement in performance, volume growth improved to 7% in Q1FY20 vs 1% in Q4FY19. The company continues to gain traction in modern trade and e-commerce. However,...
MGL is an excellent cash annuity model with decent dividend yield. Promoter offloading some stake has weighed down on the valuations, however, the uncertainty of around this is over by BG Asia selling off their remaining 10 pc stake (complete exit) as markets have reacted positively to the news. We structurally like MGL as there is improvement in their operational performance. MGL has lesser GA's than its peers but their profitability is higher than its peers. With volume outlook looking stable and spreads likely to sustain, outlook gets better. Based on DCF valuation,...
Beat margin estimates on improvement in replacement demand Apollo Tyres' (APTY) Q1FY20 Consolidated EBITDA margin beat estimates led better product mix (higher replacement sales). While the OEMs business was weak, strong replacement demand drove the volumes (grew by 12% YoY). Management is positive about improving top-line and profitability in Europe segment. Management has given flattish revenue...
In-line Q1, balance sheet better; Maintains volume guidance with riders The Q1FY20 was in-line, adjusted for unrecognized SEIS income. Margins improved 300bps YoY, despite a volume decline of 1% YoY, due to the price hikes taken in FY19 and beginning FY20. The company has maintained its 10-12% volume growth guidance, but cautioned that the growth depends on the economy. Balance sheet has improved and company is again net cash. DFC remains the most important long-term trigger that should aid margins. We retain our FY20/21 estimates, given the in-line PAT post...
Sales/EBITDA/PAT were largely flat. Sales were lower than our estimate of ` 3.19bn, while EBITDA and PAT were largely in-line (D.est: EBITDA/PAT: ` 1.18bn/785mn). VO reported a strong gross margin expansion of 720 bps YoY and 240 bps QoQ at 57.7%, bulk of the expansion in margins can be attributed to sustained ATBS prices. VO reported the highest ever EBITDA margin of 41.3% up by 670 bps YoY and 95 bps QoQ. Guidance moderated amidst delays in commissioning The management has lowered the Sales and PAT guidance to 15.0% YoY in...
