ICICI Securities Limited Broker Research reports

Shree Cement has a strong presence in the north, eastern markets. Historically, every time sales dip in a particular year, it has bounced back strongly and delivered robust volume growth in coming years despite a setback. This is also been reflected in the company's current quarter performance where volume decline has stayed lowest (down 18.6% YoY vs. industry (down ~33% YoY). While current scenario poses near term headwinds, we expect the company to rebound in a strong manner. Expectations of normal monsoons would provide some respite to the...

Strong rural presence drives faster recovery in ECD demand The ECD segment revenue in Q1FY21 fell ~50% YoY due to almost nil sales in April 2020. However, the company saw a demand recovery of 50% in May 2020 while June 2020 sales rose 4% compared to the same period last year. The faster recovery was supported by BEL's strong presence in suburban and rural markets. On the project business, revenue fell ~60% YoY in Q1FY21. On the project front, BEL has changed its strategy to bid only transmission line towers (TLT) and illumination projects and reduce the...

With the first year of operation of new 100 KLD distillery, the company was able to sell 8.5 crore litre of ethanol/ENA in FY20. With the ramping up of utilisation, we expect 24% increase in ethanol offtake by OMCs. Moreover, with higher proportion of B heavy ethanol, distillery realisation would also improve. We expect distillery revenue to grow at 14.4% CAGR to | 512 crore. This coupled with expected hike in MSP by | 2/kg would lead to earnings growth of 11.7% CAGR to | 418.5 crore by FY22E....

The travel vertical contribution to revenues declined from 22% in Q4FY20 to 4% in Q1FY21 mainly due to its exposure to top client (~20% of revenues), which is in the travel vertical from European region. The company expects a gradual improvement in revenues from top client from Q2FY21E onwards and expects its contribution to improve from current ~3% of topline to ~10% of topline by Q4FY20E. Further, we expect other verticals like Independent Software Vendor (ISV), essential retail, utility and commodity service to improve in coming quarters. However, considering the significant...

Strong backlog, execution ramp-up to ensure sustained growth Q1FY21 YTD order inflow came in at | 1931 crore, up 73%. We believe an L1 of | 4800 crore, mostly in international T&D;, combined with strong order pipeline in railways (conventional railway, new track lines, electrification), Green Energy Corridor (GEC), and new opportunities in Saarc, MENA, Africa, Middle East Region should help KEC have reasonable order inflow in FY21E. The company expects good traction in order inflows from international T&D;, railways, civil & GEC. It expects margins to sustain owing to commodity price...

Total provisioning for Q1FY21 was down 17.8% YoY to | 5628 crore. The bank has provided | 996 crore for Covid-19 during the quarter. As on June 30, 2020, total Covid provisioning was at | 1806 crore (~25 bps of advances). PCR increased from 81.3% in Q4FY20 to 83.3% in Q1FY21. Fresh slippages slumped 10.2% QoQ to | 2740 crore with ~| 2121 crore attributable to the international book. Amid moratorium, GNPA remained flat QoQ at | 6913 crore (GNPA ratio 9.39%), NNPA ratio declined 30 bps QoQ to 2.83%. Watchlist for the quarter was at | 13000 crore, up 4% QoQ....

Growth in export formulations (28% of FY20 revenues) was on the back of growth in both international generics and international branded formulations. The international anti-malarial institutional business has also contributed substantially to overall exports growth. US traction will take more time than earlier estimated due to USFDA import alerts for the Ratlam facility that is the only API source for Silvassa and Pithampur formulations plants along with Silvassa and Pithampur (Indore) plants that are specifically earmarked for the US business, besides third party sales. However,...

Since the outbreak of the pandemic, the perception of gold as an asset class has seen healthy traction. The management indicated that sentiments for plain gold jewellery and gold coins have improved on the back of significant surge in gold prices and expectations of further spike. Overall recovery rate for jewellery division rose to 77% in June and 101% in July (due to preponing of studded activation, low base effect). The management expects to exit Q2FY21E with recovery rate of 80% and gradual improvement in ensuing quarters. Owing to sluggish demand for studded jewellery, we...

Lemon Tree's (LTH) business was severely affected by lockdown in Q1FY21. Revenues fell 71.1% YoY to | 40.7 crore (vs. I-direct estimate: | 43.7 crore) as only 71% of its inventory was operational. Occupancy in operational hotels was at 40.4%, leading to average occupancy of 28.9% for the quarter. Average room rates were also down 34.4% YoY to | 2626/room. Key demand segments for business were Indians returning from abroad, global IT majors for their business continuity and on duty doctors & paramedical staffs. Total expenses were at | 36.3 crore in Q1FY21, down 62.2% YoY vs....

The radio business continued to report revenue de-growth in Q1FY21 following a disappointing FY20. Ad volume took a big hit due to reduced spend by corporate/government during Covid-19 induced lockdown. We note that ENIL's core radio revenue decline in Q1FY21 was higher than competitor in the industry who reported ~79% decline (total revenue trend better for ENIL owing to solutions business). Radio revenue decline was mainly owing to weakness in education (81% down YoY), M&E; (77% down), FMCG (72% down) and other sectors that de-grew 87% while health &...