ICICI Securities Limited Broker Research reports

Q1FY21 (April-June) Corporate India results were expected to be a washout courtesy nationwide lockdown due to Covid-19 in April, gradual easing of restrictions starting MayJune. At the index level, however, excluding banks & NBFCs and a couple of commodity players that are yet to announce quarterly results; topline fall was limited to 33% YoY. This represents resilience of India Inc. in challenging times with key sectors like IT actually growing YoY and arresting the topline decline. With bulk of people working from home and increased reliance...

Considering strong execution, best in class WC, monetisation of BOT/HAM assets, healthy balance sheet, strong return ratios, we maintain BUY on the stock with revised SoTP TP of | 300. We will closely monitor irrigation receivables, execution that could be a key trigger for upgrade/downgrade....

As expected, Q1FY21 was a washout quarter for TCNS Clothing marred by store closures for a major period during the quarter. The main emphasis in Q1 was on sharp rationalisation of operating overhead. Revenue for the quarter fell 88% YoY to | 32.4 crore. For offline sales, normalcy levels reached 40% of pre-Covid sales with strong traction in e-commerce channel (1.3x of pre-Covid levels). Provision for dormancy on unsold inventory (~| 3 crore) and change in channel mix (higher share of e-commerce) led gross margins to contract to 50.7% vs. 67.2% in Q1FY20. In a bid to minimise cash...

Post de-merger from Suven Life Sciences, pharma business will be largely driven by two cash cow CRAMS segments i.e. pharma, speciality chemicals. With a strong margin profile (+40%) without the R&D; burden of innovative pipeline, the free cash flow is likely to remain strong. Despite pandemic and high base, the company has guided 10-15% growth based on strong order book position (albeit some expected delays). Despite significant run up, there is still scope for upside as the company is still trading at significant discount to some leading players in the space dealing with innovators. We...

Guidance for working capital improvement, improved governance, better disclosures is a positive change. Nonetheless, near term concerns such as ad outlook as well as potential implementation of NTO 2 remain. We will turn buyers once ad recovery, improved cash flows & overdue recovery from related parties (walking the talk) is seen. We do, however, increase our target multiple from 9x FY22 P/E to 11x FY22 P/E with a revised target price...

Petronet LNG provides comfort on the business model and remains a structural story on India's increasing gas demand. With India continuing to be short of natural gas supply, Petronet LNG will benefit as the primary play on increasing usage of LNG. While volumes were impacted during the lockdown, currently Dahej terminal is operating at full capacity. On the new project front, the management indicated the company is planning to set up an import terminal on the east coast. Also, Petronet's deal with Tellurian to buy a stake and import LNG is under negotiation. At the CMP, Petronet LNG...

Q1FY21 consolidated revenues fell 46% YoY led by ~48% YoY drop in the revenue of domestic business. However, revenue fall in subsidiaries was limited to ~20% YoY due to topline growth in Bolix Poland (classification of construction works under essential categories), along with consolidation of newly acquired business of STP Ltd. The management expects strong demand revival, going forward, supported by festive demand, easing restriction in urban clusters (drivers of its premium products). Lower operating leverage drags EBITDA margins...

Cochin Shipyard (CSL) registered a substandard performance in Q1FY21 as production was halted till May 5. After this, production started on a reduced time scale for a significant period of the quarter affecting overall performance. Revenue for the quarter was at | 332.5 crore, down 55% YoY. Shipbuilding (SB) revenue fell 47.5% YoY to | 316.1 crore while shiprepair (SR) segment contracted 87.7% YoY to | 16.35 crore in the quarter. On a segmental profitability front, SB reported EBIT of | 62.5 crore whereas SR clocked an EBIT (loss) of | 8.9 crore. SB, SR segments contributed 95.1%,...