ICICI Securities Limited Broker Research reports

Voltamp Transformers (Voltamp) reported strong numbers for Q4FY23 with EBITDA growth of 39% YoY to Rs928mn. This was led by 14% YoY revenue growth and the company’s highest-ever EBITDA margin of 21.1% (+390bps YoY). PAT grew 47.6% YoY to Rs766mn.

Cummins India (Cummins) reported a strong set of numbers for Q4FY23 with sales at Rs19bn (up 29% YoY). EBITDA margin expanded by ~290bps YoY leading to EBITDA / PAT growth of 56% / 67% YoY to Rs3.2bn / Rs3.2bn respectively.

Samvardhana Motherson International’s (SAMIL) Q4FY23 EBITDA margin at 9% is up 120bps QoQ, and is higher than the consensus estimate of 8.1%. This was driven by gradual recovery in the gross margin (GM), operating leverage benefits and partial cost pass-through to customers.

Q4FY23 results were above our estimates. Mrs. Bectors’ continues to report material uptick in revenue growth trajectory (+38% YoY with similar growth across all four quarters) led by distribution expansion in existing regions and pricing.

Bharat Heavy Electricals’ (BHEL) Q4FY23 revenue grew 2% YoY to Rs82bn, wherein power revenue was up 4% YoY to Rs62bn while industry revenue remained flat YoY at Rs16.5bn.

Steel Authority of India’s (SAIL) Q4FY23 EBITDA undershot our and consensus estimate by 11% and 13%, respectively. Key takeaways: 1) Sales volume rose 12.7% QoQ (down 0.6% YoY), similar to peers due to weakness in domestic demand in Jan’23 and Feb’23.

There was sequential recovery in almost all segments of Indigo in Q4FY23 and Apr May’23 are also strong months. We attribute this improvement to likely success of ‘Strategy 2.0’ as tier 1 and 2 cities are growing at ~100% higher than tier 3 and 4 cities and rural markets.

ONGC reported a 2% YoY dip in its standalone EBITDA and 1% dip in recurring PAT for Q4FY23 (EBITDA / PAT was at Rs175bn / Rs88bn vs I-Sec estimate of Rs220bn / Rs121bn respectively), with consolidated EBITDA / PAT up 1% / down 9.6% YoY.

City Union Bank (CUBK) reported a muted Q4FY23 with PAT of Rs2.18bn (up 4% YoY, flat QoQ) on the back of 5% YoY decline in operating profit and moderation in provisioning. Despite reasonable control on opex (up 11% YoY), operating earnings fell 5% YoY on slower (up 7% YoY) loan growth and 36bps YoY (23bps QoQ) NIM compression.

Sun Pharmaceutical’s (Sun) Q4FY23 performance was decent, aided by traction in specialty portfolio, India branded and launch of Revlimid in the US. Specialty business sales contribution had increased to 16.6% in FY23 (14% in FY22) and key assets like Ilumya, Winlevi and Cequa will likely improve the share to 21% by FY25E.