The board has given approval for expansion in the capacity of dyestuff at both Vadodara (1600 TPM) and Ahmedabad plant (400 TPM). We expect this to result into visibility in the volume growth post FY21. Further, the company is also entering into caustic soda business with a capacity of 300 TPD, translating into stability in the realisation growth to some extent in long run. However, any disruption from China could put pressure on realisation growth for entire capacity and thereby can curtail operating margins. Total capex for dyestuff, S Acid and caustic soda is earmarked at | 1023 crore with...
Q4FY19 revenues grew 19.1% YoY to | 4404 crore (I-direct estimate: | 3783 crore) mainly due to 69% YoY growth in the US to | 1143 crore (I-direct estimate: | 814.3 crore) led by launched of gSensipar at risk. Domestic revenues grew 10.9% YoY to | 1500 crore (I-direct estimate: | 1420.7 crore). EBITDA margins improved 676 bps YoY to 21.8% (I-direct estimate: 16.1%) due to mainly due to gSensipar launch. EBITDA grew 72.6% YoY to | 961 crore (I-direct estimate: | 607.9 crore). Net profit grew 60.9% YoY to | 383...
Volume growth to revive, exports at the rescue! PCBL is a leading CB player with domestic market share at ~35%. It clocked CB sales volume of ~402 KT, flat YoY. As of FY18 end it had an effective capacity of ~441 KT. It operated at 90%+ utilisation levels and largely missed out on robust auto demand in H1FY19 due to lack of capacity. PCBL commissioned a brownfield expansion amount to ~56 KT in Q4FY19 and is well poised for volume led growth, going forward. With muted domestic auto demand prospects, PCBL is banking on exports to push volumes. We...
Migration away from diesel to hurt powertrain division! Implementation of new emission norms i.e. BS-VI from April 2020 onwards is set to change the fuel preference landscape in the passenger vehicle space. The quantum of cost increase necessitated by introduction of new technology is expected to be higher for diesel vehicles compared to petrol vehicles, thus further exacerbating the existing initial cost difference between the two. For the smaller passenger car models, in particular, this cost increase is seen as being prohibitive from a demand perspective. The...
In spite of competition from rivals like Blue Dart, Gati and Rivigo, TCI Express has been consistently clocking double digit growth (15%+). Revenue growth has been driven by volume growth and increased business from addition of new customers. EBITDA margin for FY19 improved 140 bps to 11.6% owing to higher capacity utilisation and operational efficiency. Overall, the company has guided for | 400 crore capex spend in five years, which would be utilised to expand its reach in Tier 2, 3 cities (hub & spoke model - reach 1000 offices count), open newer sorting centres (currently 28...
Strong capacity addition lined up; leverage to remain stable Ramco has a pipeline of 6.2 MT of cement capacity to be commissioned over FY20E and FY21E (refer exhibit 4). During FY20E, 2 MT of capacity in the East (West Bengal, Odisha) and 1 MT in South (Vizag). Rest of the capacities would be coming in FY21E along with 3.75 MT of clinker capacity addition (greenfield and brownfield). These projects would be completed at a cost of ~| 3430 crore out of which | 1200 crore has already been spent in FY19. Over two years, the balance would be spent for which we believe some debt...
To increase share of GVT in product portfolio Somany's sales volumes grew 3.3% YoY to 51.2 MSM in Q4FY19 despite conscious credit monitoring. The 3.5 MSM Andhra GVT plant was commissioned in March, 2019 and is expected to reach 100% utilisation in Q2FY20E. Secondly, Somany is upgrading Kadi plant (| 30 crore capex) to augment manufacturing of value-added products and is expected to be operational by November, 2019. With new capacities being added and share of value-added products expected to increase, the management has guided...
With the completion (major leads/wins out) of the 17th General Elections and re-election of the incumbent government, the key positive takeaway is consistency in economic governance framework for the next five years. Most importantly, comfortable majority also ensures no impediments of coalition pressures in case of tough decisions for long term growth. The attention, therefore, shifts to areas of focus for the next five years, which can be gauged through the manifesto of the BJP. The broader takeaway is that manifesto envisages inclusive growth spanning infrastructure, rural/agri...
BEL's CD business recorded revenue growth of ~15%, 23% in Q4FY19, FY19, respectively, due to low base and increased reach post completion of RREP. This is largely driven by strong performance in the appliances category that grew ~22%, 30% YoY in Q4FY19, FY19, respectively, followed by the fan business, which grew 19%, 26% YoY, respectively. We model CD segment revenue CAGR of 17% in FY19-21E vs. management guidance of ~24%. However, EPC segment revenue growth at 7%, 58% YoY in Q4FY19, FY19, respectively, was due to execution of large ECP project in UP. The EPC...
FY19 was a challenging year for the company with moderate topline growth of 4.8% YoY to | 1816.2 crore. The management highlighted that market conditions remained sluggish post implementation of GST while normalisations at dealer's level took longer than anticipated. To address this issue, the management had to invest in marketing spends and trim its average realisations especially for garmenting segment. This translated into 90 bps margin contraction to 13.2% YoY in FY19. With stabilisation of trade channels and higher number of wedding dates in FY20, we expect revenue...
Asset quality took a hit on back of fresh slippages worth | 3688 crore of which | 3000 crore was for exposure to IL&FS.; Absolute GNPA & NNPA increased ~101% & 118% QoQ to | 3947 & | 2248 crore, respectively. Accordingly, GNPA & NNPA ratio were at 2.1% & 1.21%, respectively. The bank has maintained higher provisions for IL&FS; at | 1650 crore (55% of exposure) (holdco (70%) & SPV (25%)). The bank's exposure towards other stressed company was (ADAG, Essel & DHFL) at ~1.9% of the loan book. On the back of classification of IL&FS; as NPA, the bank reversed | 153 crore...
Healthy inflows in FY19, FY20E guidance at ~| 5200 crore Wabag witnessed order inflows of | 4878 crore in FY19. Key orders won include SWTP in Saudi Arabia (| 933 crore), desalination order in Tunisia (| 596 crore), STP order in Doha (| 555 crore) and Namami Gange orders worth | 1035 crore. The management has guided for order inflows of | 5000-5400 crore in FY20E. This is on the back of orders expected from large projects like the desalination and sewage treatment plants in Chennai, Mumbai (| 11000 crore) and Delhi (| 1500 crore). Wabag has already been declared...
Asset quality witnessed a significant improvement with 9.3% QoQ reduction in GNPA to | 48233 crore, led by higher write-off of | 6750 crore. Slippages were sequentially stable at | 3192 crore with majority of pain recognised during the quarter. Utilising recent capital infusion by the government, the bank parked higher provisions at | 5550 crore, including ~| 1000 crore related to accounting for NPA accounts, ~| 1800 crore in lieu of legacy corporate exposure in telecom sector. Excluding these, provision on a normalised level was at ~| 2600 crore. Provision coverage increased to...
Weak global GRMs to impact refining business performance Reported GRMs during the quarter were at US$4.5/bbl, below our estimate of US$4.8/bbl. Inventory gain was at US$2.4/bbl. The company reported weak core GRMs at US$2.1/bbl on account of a weak operational performance. Benchmark Singapore GRMs are remaining weak in the current quarter also (Q1FY20-TD) at US$4/bbl with weak product spreads. Hence, operational efficiencies will play a key role in deciding HPCL's performance in coming quarters. We estimate GRM at US$4.9/bbl and...
Communication grew well better than expectations in the quarter. We expect momentum in communication to continue in FY20E. Hence, we expect growth to be more balanced between communications and enterprise segment vs. prior expectations of mid-single digit growth in communication and 8-10% growth in the latter. Lower growth in enterprise is due to weak outlook in healthcare, BFSI and cut down of less profitable projects. On the deal front, pipeline continues to be healthy with TCV of US$408 million in Q4FY19 and 33% YoY growth in FY19. Although the...
Expansion in full swing; to lead next phase of growth Due to clinker constraints in the north, topline growth in the north was somewhat restrained. To remove these bottlenecks, the management had announced capacity expansion plans. The new clinker line at Mangrol unit for a 7500 TPD capacity would be commissioned by September 2019. Additionally, the 1 MT each brownfield expansion at its Nimbahera and Mangrol grinding units would be commissioned in H1FY20E as well. Further, the greenfield GUs at Aligarh and Balasinor are expected to be completed in...
Increasing kit value, newer products & verticals to support! BFL is an important player in the CV ancillary space, providing forging components to both domestic and global OEMs. The CV segment accounted for ~41% of BFL's total FY19 revenues. Acknowledging its reliance on the CV space, BFL has consciously attempted to (i) infuse a greater degree of diversification in its offerings and (ii) to augment kit value i.e. content per vehicle. The industrial segment (defence & aerospace, agri, infra, railway and oil & gas) constituted ~40% of FY19 revenues. It continues to perform well...
Weak global GRMs to impact refining business performance Reported GRMs during the quarter were at US$4.1/bbl, below our estimate of US$6.8/bbl despite inventory gain of US$2/bbl. The company reported weak core GRMs at US$2.1/bbl on account of a weak operational performance. The benchmark Singapore GRMs are remaining weak in the current quarter as well (Q1FY20-TD) at US$4/bbl with weak product spreads. Hence, operational efficiencies will play a key role in deciding IOC's performance in coming quarters. We estimate GRM at US$5.9/bbl and...
BIL delivered healthy 12.5% CAGR volume growth in FY16-19P. Total tonnage increased from 1.5 lakh MT to 2.1 lakh MT during that time, driving BIL's emergence as a dominant player in the niche off-highway tyre space. With exports forming ~82% of revenues (India presence established meaningfully just three years back), BIL's fortunes remain tied majorly to demand conditions in the key markets of the Americas and Europe. During H2FY19, demand in the agri segment, in particular, was adversely impacted by a combination of trade war-led souring of sentiment, production cut at a...
Graphite India reported a steady Q4FY19 performance wherein the topline came in broadly in line with our estimates while EBITDA and PAT came in higher than our estimate. On a consolidated basis, Graphite India reported capacity utilisation of 85% (80% in Q3FY19 and 91% in Q4FY18, in line with our estimate of 85%). The consolidated topline came in at | 1693 crore (down 8.7% QoQ, up 28.0% YoY, broadly in line with than our estimate: | 1677 crore). Consolidated EBITDA for the quarter was at | 864 crore (up 20% YoY, down 20% QoQ, higher than our estimate of | 778 crore). EBITDA...
