HDFC Securities Broker Research reports

Computer Age Management Services Ltd- IPO Note Issue Open: Sept 21 Sept 23, 2020 Price Band: Rs. 1229 1230 (Discount of Rs 122 for eligible Employees) Issue Size: 18,246,600 eq shares (Entirely Offer for sale) Issue Size: Rs. 2240.0 2242.0 cr

We increase our EPS forecast by 7-8% for FY21/22 to factor gVascepa launch and our target multiple to 22x (from 20x earlier) to factor improved visibility in the US and API business. We upgrade Dr Reddys to ADD (from REDUCE) and increase TP to Rs4,670. The growth visibility of the US business has improved with the strong momentum of new launches (12 launches in YTD FY21) including niche ones such as gCiprodex (first to market). The dependence of gCopaxone and gNuvaring on FY22 earnings reduces with the new product flow and favourable ruling of gVascepa (now in our estimates). Structural tailwinds in the API business (15% of revenues) will lead to double digit growth over the next few years.

Route Mobile Ltd - IPO Note Issue Open: Sept 09 Sept 11, 2020 Price Band: Rs. 345 350 *Issue Size: 17,142,857 eq shares (Fresh issue 6,857,143 + Offer for sale of 10,285,714 eq sh) Issue Size: Rs. 591.42 - 600.00 cr

Happiest Minds Technologies Ltd - IPO Note Issue Open: Sept 07 Sept 09, 2020 Price Band: Rs. 165 166 Issue Size: 42,290,091 eq shares (Fresh issue 6,626,506* + Offer for sale of 35,663,585 eq sh) Issue Size: Rs. 697.79 -702.02 cr

Mindspace REIT IPO Note Issue Open: July 27 - July 29, 2020, Price Band: Rs. 274 - 275, Issue Size: Rs 4,500cr

Yes Bank Ltd. Issue Open: July 15 July 17, 2020, Price Band: Rs. Rs. 12 - 13 (Discount of Rs 1 for the eligible employees of the bank), Issue Size: 11,538,461,538 eq shares (Including Employee reservation of 166,666,667 shares

Rossari Biotech Ltd. Issue Open: July 13 - July 15, 2020, Price Band: Rs. Rs. 423 - 425, Issue Size: 11,676,471 eq shares (Fresh issue 1,176,471* + Offer for sale of 10,500,000 eq sh)

We expect demand recovery from 2Q-3Q, supported by (1) strong digital playbook, (2) recovery in deal contracting with increase in consolidation deals (advantage Indian Tier-1s) as enterprises consolidate their tech portfolio, and (3) tech budget normalisation in 2Q for impacted verticals. Following -1.5/-6.0% QoQ in 4Q20/1Q21E, we have factored -0.6/+1.5/+2.8% QoQ in revenue over 2Q-4Q21E. The IT sector margin is expected to decline 95bps QoQ. Profitability is expected to be impacted by lower utilisation, pricing, cross-currency (GBP), lower forex gains and should be offset by (1) INR depreciation, (2) lower travel and discretionary spend, (3) deferral of wage increase and variable payouts cuts/deferrals, and (4) lower sub-contracting. We expect the margin trajectory to bottom out in 2Q. Subsequent margin recovery is premised on (1) demand recovery leading to utilisation recovery (onsite utilisation to precede offshore), and (2) continuity in optimal SG&A, including travel and sub-contracting rationalisation. IT sector (coverage universe) is expected to post -6.1/-3.7% QoQ/YoY in 1QFY21E revenue with cross-currency impact of -15 to -70bps QoQ. We expect Tier-1 IT revenue to decline between 5% and 9% QoQ while Tier-2 IT is expected to display a wider divergence (-2 to -14% QoQ). COVID-related economic impact on sectors like travel and transportation, O&G;, retail & CPG (discretionary) will be accentuated in 1Q (dual impact of price/volume cuts and deal deferrals/cancellations), while BFSI, healthcare, retail & CPG (non-disc.) and hi-tech verticals will be more resilient (deal-deferral impact, but resilient on pricing/volume).

We maintain our ADD rating on the stock. We believe that while Subros will benefit from a recovery in volumes at Maruti Suzuki- its largest customer (which accounts for over 3/4th of revenues), the diversification initiatives are delayed due to the COVID outbreak (home AC segment ramp-up is pushed back, CV and other segments will witness sluggish trends).

The bump up in non-food credit growth is unlikely to sustain, given, (1) The growth arising from higher utilisation of undrawn limits is likely to be one time', (2) Demand for personal loans which has been supporting overall credit growth is likely to see a significant fall, which will not be compensated for by growth in other segments, and (3) Banks are likely to turn more risk averse. Our coverage banks reported a credit growth of ~16% over FY16-19 vs. non-food credit growth of ~10% over the same period. We expect our coverage to exhibit a ~7% credit growth over FY21E. Contrary to our expectations, non-food credit grew 7.6% YoY in Mar-20 (vs. 7.3% in Feb-20). Further, MoM growth came in at 4.2% (vs. 3.9% in Mar-19). The increase in Mar-20 accounted for 57% of the increase in FY20. While Mar has a/c for an increasing proportion of incremental (annual) non-food credit, the persistence of this trend in FY20 is surprising, in light of COVID-19 related disruptions. Much of the growth in Mar-20 was supported by credit for industries and services (~87% of incremental Mar-20 credit).