Strong order inflows, traction in execution to drive growth Sizeable order wins for HRL have translated to a record high order book of | 340 crore, (85:15 mix in favour of railways & industrials segment) with railways being the major client. The company expects | 160-170 crore worth of orders to be executed in H2FY20E providing strong revenue visibility for the year. HRL is currently L1 in orders worth | 350 crore suggesting strong order inflows in the medium term. It received orders worth | 100 crore for Q2FY20. Post Budget 2021, railway tendering activity is expected to further...
Expansion of distillery capacity in H2FY20 to augment topline Though distillery volumes declined 30% YoY to 38 lakh litre in H1FY20, we believe commissioning of new 100 kilo litre per day (KLD) capacity at an investment of | 146 crore in November 2019 would result in multi-fold increase in volumes coupled by higher realisation. We expect its distillery volume to increase from 90 lakh in FY19 to 3.5 crore by FY21E. Increase in B heavy and C heavy ethanol prices would benefit the company in terms of higher distillery revenue from | 36 crore in FY19 to | 67 crore in FY20E and...
Mining volumes pick up; key to growth over FY19-21E During the quarter, sales volumes came in at 61220 MT, down marginally by 0.8% YoY while H1FY20 volumes also de-grew 0.8% to 124838 MT YoY. Mining segment sales volume grew marginally by 0.9% to 40358 MT while other segment de-grew 3.8% to 20862 MT. The mining segment, which contributes more than 66%, got impacted by ~5000 MT of lesser offtake from one of the Brazilian iron ore mine customer and ~5000 MT adverse volume impact due to cautious stance by a lot of mines leading to inventory...
ENIL's revenues came in at | 115.6 crore, down 5.7% YoY, impacted by core radio revenues that de-grew ~17% YoY while solutions business grew ~34% YoY. Reported EBITDA came in at | 28 crore while margins came in at 24.2%. Adjusted for Ind-AS, EBITDA was at | 17.9 crore, down 34.5% YoY while adjusted margins came in at 15.5%, down 680 bps YoY on account of negative operating leverage. Reported PAT came in lower at | 0.2 crore, impacted by a weak operating performance, lower other income and Ind-AS...
Bata has constantly undertaken efforts towards transforming its brand image from a mass brand to a premium one through launch of new trendy collections, investing in marketing spends and redesigning existing store models. Recently, the company inaugurated its fifth experience centre store, with the aim of providing complete foot-care services like 360 foot scanning, customised insoles, medicated pedicure and shoe laundry. The store also offers a wide assortment of fashion and working women styles, premium collections and a sneaker studio. Enhanced share of...
CPI inflation rose sharply to 4.62% in October against 3.99% in September. The rise was primarily driven by food inflation, which was led by vegetables inflation. Importantly, core inflation moderated...
For Q2FY20, production volumes were at 5.0 MT, down 5% YoY, while sales volumes were down 13% YoY to 5.8 MT. As the Donimalai mines were shut, the production volume was adversely impacted compared to Q2FY19. Going forward, we model sales volume of 32 MT for both FY20E and FY21E. Restart of Donimalai mines awaits Karnataka response In September 2019, the Ministry of Mines amended the 'Mineral (Mining by Government Company) Rules, 2015 with regard to renewal of mining leases allocated to government companies. Earlier, the rule 3 (2) stated that if an...
For Q2FY20, consolidated order inflows came in at | 1723 crore, up 28% YoY (considering the base effect of | 471 crore FGD order) owing to muted capex in several sectors impacted order inflows in energy and environment segment. Consolidated order inflows comprise energy segment (| 980 crore), environment segment (| 162 crore ex-FGD) and chemicals segment (| 109 crore). Q2FY20 order inflows were dragged by a decline in international inflows (| 374 crore) while domestic order intake was up YoY (| 1349 crore). The consolidated order book was at | 5334 crore, down...
Sun TV reported a weak set of numbers with a challenging economic environment, increased costs (including some one-offs) weighing on topline and EBITDA. Advertisement revenues at | 337 crore, down 1.5% YoY were impacted by a weak economic environment. Subscription revenues, however, witnessed robust 16.9% YoY growth aided by strong monetisation from NTO implementations. EBITDA at | 469 crore (margin of 58.9%) was lower than estimates of | 526 crore on account of certain one-offs related to CSR and bad debt provisioning aggregating to | 33 crore and continued...
Coal India (CIL) reported a steady set of Q2FY20 numbers. Higher-thanexpected FSA realisations supported overall earnings for the quarter. The company reported a sales volume of 122 million tonne (MT) (down ~11% YoY). FSA sales volume came in at 104 MT (broadly in line with our estimate of | 105 MT) while FSA realisations during the quarter was at | 1439/tonne (up 5% QoQ, higher than our estimate of | 1350/tonne). E-auction volumes came in at 15 MT (broadly in line with our estimate of 14 MT) while the eauction realisations were at | 2020/tonne (down 6% QoQ, broadly in line with our estimate of | 2000/tonne). The company reported a total operating income of | 20383 crore, down 7% YoY. EBITDA came in at | 3611.2 crore,...
PML reported retail rental income growth of 7% YoY to | 259.4 crore while retail consumption growth was slow at 1% YoY to | 1,694.8 crore in Q2FY20. Consumption was impacted largely on account of higher area under fit outs at a couple of assets and ongoing metro work near PMC Bangalore. On a positive note, the festive month of October, 2019 saw consumption growth of more than 20% over that witnessed in last year's festive month (November, 2018), which is encouraging. PMC Lucknow (Phoenix Palassio) is expected to get operationalised in January/February, 2020. With this and...
Naukri, 99acres continue to be major growth drivers The company's recruitment business (Naukri) grew at a healthy 18.7% YoY while slower growth of 14% YoY in billings can be attributed to broad based weakness in non-IT segments (60% of revenue). The billings could be volatile in the near term driven by weakness in core sectors with additional pressure from financial and travel tourism space on account of slowdown. However, hiring in IT sector and 11% YoY growth in unique customers would drive growth in the segment. Hence, we expect this segment to...
US key growth driver; acquisitions to strengthen US basket After filing ANDA in the US in 2003, the company has come a long way as current ANDA filings are at 551. US revenues have grown from ~US$100 million in 2009 crossing $1 billion sales as on 2017. In rupee terms, US sales have grown at 17% CAGR to | 9031 crore in FY15-19. US formulations now constitute 46% of total turnover, up from 30% in FY13. Post-acquisition of Sandoz' US dermatology and oral solid businesses, Aurobindo will become the second largest generic player in the US by number of prescriptions. Due...
The company is likely to commission 160 KLD distillery capacity in December 2019, which would increase its distillery volumes from 11.0 crore litre in FY19 to 17 crore litre in FY21E. Oil marketing companies have floated tenders for 511 crore litre of ethanol for 2019-20. We believe UP based sugar mills would significantly increase the supply of ethanol to OMCs this year. Moreover, higher realisation of B heavy ethanol would prompt the companies to divert more sugarcane towards the production of B heavy ethanol. We expect the company to divert 50% of sugarcane towards B...
Category extension fuelling growth for lifestyle brands Lifestyle brands (Allen Solly, Van Heusen, Louis Philippe, Peter England) grew 15% YoY to | 1254.0 crore driven by healthy like to like (LTL) sales growth of 7.0%. Growth was witnessed across all distribution channels with e-commerce growing at a rapid pace. Store addition pace remained robust, with ABFRL adding 39, 116 stores in Q2FY20, H1FY20 (2096 stores, 2.7 million sq ft), respectively. Apart from its core portfolio of men's category, growth was fuelled by category expansion, with women's wear and kids...
Volume growth subdued on account of CNG segment MGL reported lower volume growth of 1.3% YoY against our expectation of 4.1% YoY. Lower growth in CNG volume at 1% YoY (our estimate: 5.5%) to 2.2 mmscmd mainly led to disappointing volume growth. On the PNG front, volumes also decelerated, which increased 2.1% YoY to 0.8 mmscmd. We marginally lower MGL's volume outlook to 5-6% CAGR in coming years due to lower CNG growth assumptions. Given the cost economics of natural gas over other alternative fuels in conjunction with rising pollution concerns,...
MDF division shows improvement in EBITDA margins CPIL reported MDF sales volumes growth by 23% YoY to 33,271 CBM in Q2FY20. We highlight that MDF realisations grew 5% QoQ (grew 3% YoY) to | 23,342/CBM, which is encouraging. MDF EBITDA margin expanded 16.4 percentage points YoY to 22.3% in Q2FY20. This was primarily on account of drop in prices of raw materials viz. glue by 20%, operating leverage on account of higher utilisation and benefits of 3-4% price hikes taken for thick MDF by the company in Q1FY20. For MDF, CPIL has maintained higher focus...
The company's general staffing revenues increased at a lower-thanexpected rate at 16.6% YoY mainly led by mere increase of 5.4% YoY (average growth of 40% YoY in last five quarters) in NETAP headcount in this quarter. This was mainly on the back of weakness in manufacturing and auto segments. In the near term, any significant improvement in NETAP business is unlikely. However, continued growth in general staffing associate headcount (ex-NETAP) prompts us to believe the company could clock growth of 20.2% over FY19-21E in general staffing. This accompanied by acquisition of eCentric in IT staffing, led us to estimate 23.3% growth in...
Gail India reported Q2FY20 results that were below our estimates on the profitability front. The profitability of gas transmission came in above our estimates on operational basis. The gas trading business was impacted by the fertilisers plant shutdown and fall in LNG spot prices globally. The profitability of petchem and LPG segments was below estimates. Subsequently, EBITDA at | 1562.7 crore (down 46.6% YoY), came in below our estimates of | 2008.8 crore. Reported PAT at | 1064.3 crore (down 45.8%...
