MSSL would acquire & merge promoter group (SAMIL) into itself against earlier proposal to buy out SAMIL's 49% stake in SMRP BV. Effectively, this would consolidate all the group's automotive businesses (ex-DWS) as well as other supporting businesses under the umbrella of the listed entity i.e. MSSL. MSSL would issue ~136 crore new shares, diluting equity share base by ~43% to 452 crore shares from present 316 crore shares. This would be an effective equity acquisition value of ~| 8,300 crore and an EV valuation of ~| 9,400 crore (net debt at SAMIL at ~| 1,100 crore) for an incremental...
Margins of Tier 1 companies are expected to decline ~32-200 bps while among Tier 2 companies NIIT and TechM are expected to post a margin decline of ~161-200 bps. This is mainly due to a dip in utilisation, pricing pressure & cross currency headwind, partially offset by rupee depreciation, lower travel cost and lower general administrative cost. Among midcap, LTI, MindTree to report stable margins We expect L&T; Infotech to report stable margins led by rupee tailwind, lower travel cost and absence of one-time contribution to PM cares fund...
In the 2-W pack, market leader Hero MotoCorp outperformed with 27% YoY decline for the month to 4.5 lakh units while Bajaj Auto and Royal Enfield volumes fell 27.4% and 34.8%, respectively. On the PV side, bellwether MSIL posted 54% YoY decline in total volumes to 57,428 units (UV down 45%). M&M;'s UV portfolio declined 55% while Tata Motors' domestic PV volumes fell 60.6% YoY to 14,571 units for the quarter, helping it to outperform both companies. M&HCV; segment remained an underperformer, reporting dismal >90%...
On a segment wise, piping segment was hit hard (sales down ~37% YoY) due to lower capex into infra related projects by government. Further, revenue from composite cylinder, IBCs fell sharply by 22%, 17% YoY, respectively, as volume offtake by key clients was impacted by Covid-19 related lockdown. These segments contribute ~25% of total revenue. We...
Retail rental income impacted sharply by Covid-19 PML reported retail rental income decline of 11% YoY to | 222.7 crore mainly due to Covid-19 led lockdown and consequent lower trading density in March, 2020. Operational malls reported overall consumption decline of 15% YoY to | 1387.4 crore in Q4FY20 despite strong consumption growth of 15-16%, 8-9% in January, February, 2020 for HSP and other properties, respectively. The monitorable will be resumption of malls in Mumbai, which forms ~45%+ of retail revenue. Near term pain is imminent. We expect...
Domestic operation in FY20 comprises 64% of total sales volume In India, Tata Steel has operations in Jamshedpur (10 MT), Kalinganagar (3 MT), Tata Steel BSL (5.6 MT) and Tata Long products (1 MT), aggregating to 19.6 MT. Indian operations' key assets viz. Jamshedpur, Kalinganagar, Angul have globally cost competitive position, aiding overall EBITDA margins. In FY20, the higher margin domestic operations accounted for ~64% of overall sales volumes. In FY20, Tata Steel's consolidated sales volume was 26.7 MT of which Indian operations contributed 16.97 MT (~57% in FY19)....
Petronet LNG's total volumes were above our estimates, mainly on account of contracted long term LNG sales and Dahej spot sales. Total sales volumes came in at 219 tbtu vs. 205.1 tbtu in Q4FY19 (up 6.8% YoY) and 233 tbtu in Q3FY20 (down 6% QoQ). Regasification volumes were in line with our estimates at 105 tbtu. Capacity utilisation at the Dahej terminal was at ~85% while capacity utilisation for Kochi terminal was at ~20%. In April, during the lockdown period, Dahej utilisation was lower at 50-55%. It picked up in May and is currently at ~100%. Subsequently, we estimate 881.9 tbtu and...
Strong order book but sustained execution key to growth... During FY20, BEL bagged significant orders like Akash Missile system (7 squadron), coastal surveillance system, upgrade of electronic warfare (EW) system, smart city business, etc. The company continues to have a strong order book and order inflows. Q4FY20 order inflows were at | 2867 crore while FY20 order inflows were at | 13200 crore. Order book as on FY20 was at a robust | 51970 crore. However, order inflows in FY21E may get impacted owing to an expected cut in defence budget amid economic...
Headwinds continue for India business amid challenges Macroeconomic headwinds continued to impact Elgi's domestic air compressor sales growth in Q4FY20. The company adopted a strategy to curtail employee cost and reduce fixed cost by 15-20% in FY21E mainly in India business. However, the management expects some revival in capacity building in food & beverage, pharma to gain further traction with its disrupted AB series oil free compressor that is gaining good traction in India. After-market (~24% to India topline), is likely to start gaining traction from...
Volume growth to return; Siliguri plant to boost sales further Post imposition of nationwide lockdown, the plant utilisation and sales volume declined almost 90% in April. However, May and June witnessed a healthy pick-up in volume offtake, with June seeing sales volume similar to levels reported last year. At present, rural demand continues to remain strong. We also expect a ramp-up in infrastructure along the China border soon, going forward. This will drive cement demand in the Arunachal, Sikkim area. Further, commissioning of the Siliguri plant in FY21E should...
CESC reported a decent operational performance in Q4FY20. Revenues were in line with estimates while lower other expenses led to a beat in EBITDA. However, a shortfall in other income negated the EBITDA beat. Consequently, PAT was marginally lower than estimates. However, on the subsidiaries front, the performance of all generation and distribution...
BFL's segmental revenue mix at standalone level for FY20 was at ~39% CV, ~37% industrial, ~16% PV, ~8% others. The CV space domestically (~11% of sales) as well as in overseas geographies (~29% of sales) remains a laggard. In India, present run rate of retail sales for M&HCVs; trails wider industry by a large margin when compared to pre-Covid levels on account of continued demand side (muted economic activity) and supply side (system overcapacity, revised axle load norms) issues. We expect the domestic CV recovery to be quite gradual in nature. In the US Class 8 truck...
Vardhman Textiles posted a weak Q4FY20 performance due to lockdown impact in second half of March. Consolidated revenues fell 9.5% YoY to | 1596 crore due to 10% fall in textile segment. Though gross margins improved 340 bps YoY to 48.5% owing to lower input cost, negative operating leverage led to a fall in EBITDA margin by 80 bps to 14.1% with EBITDA down 15% to | 225.1 crore. Hence, PAT fell 18% YoY to | 149 crore....
Tepid consumption demand across product categories and a challenging Q4FY20 led to overall topline de-growth of 6.4% YoY to | 1699.3 crore in FY20. On the segmental front, fabrics division (~74% of revenues) de-grew 4% YoY whereas garmenting segment (~20% of revenues) saw revenue degrowth of 14% YoY to | 350.0 crore. Higher competitive intensity and subsequent lower realisation weighed on the performance of garmenting segment. As on date, trading channels are stuck with excess inventory. Hence, primary sales are expected to pick up only when the cash cycle starts to improve. On the profitability front, price cuts and higher trade discounts...
While in FY19, the company's flight catering business faced a setback with the grounding of Jet Airways, FY21 has brought in new challenges to operate in the pandemic environment. During the first full quarter of lockdown, most of EIH's property remained closed with 85-88% dip in the business during April-May. With almost 60-70% of cost being fixed in nature, we expect a sharp fall in EBITDA for FY21E. To cope with these challenges, EIH has entered the food delivery segment, with salary cuts being taken by top executives and directors. The company has launched The Oberoi...
Coal India (CIL) reported a mixed set of Q4FY20 numbers. EBITDA came in higher than our estimate while reported PAT came in lower than our estimate. PAT came in lower than our estimate on the back of higher-thanexpected effective tax rate. CIL reported sales volumes of 164 million tonne (MT), flattish YoY. Fuel supply agreement (FSA) sales volume was at 139.2 MT (142.4 MT in Q4FY19) while FSA realisation during the quarter was at | 1446/tonne (| 1460/tonne in Q4FY19). E-auction volumes were at 21.0 MT (16.7 MT in Q4FY19) while e-auction realisations were at | 2106/tonne (| 2754/tonne in Q4FY19). Total operating income was at | 27568.2 crore...
US generics comprise ~30% of total revenues. So far, the company has received approval for 165 ANDAs while another 44 are pending approval, of which 24 are Para IV applications. However, Glenmark's derma portfolio is facing stiff pricing pressure in the US. Going ahead, traction from the newly commissioned US based Monroe facility will be the key determinant besides sustained product launches. We expect the US to grow at 6.5%...
Kajaria Ceramics posted a weak set of Q4FY20 numbers on the topline front with steep volume decline due to Covid-19. Sales volumes fell 20% YoY to 18.2 MSM on account of Covid-19 impact, specifically in the second of March. However, it is pertinent to note that the volume decline was relatively lower than ~28% decline reported by its key peer Somany Ceramics. The topline de-grew 20% YoY to | 652 crore. The EBITDA margin contracted 76 bps YoY to 14.3% and was higher than our expectation of 13.2%, largely on account of lower other expenses. EBITDA at | 93.4 crore fell 24.1% YoY....
Goodyear India (GIL) is a leading domestic tyre player with manufacturing presence in farm equipment i.e. tractor and CV segments. It also serves the PV segment, albeit through trading route (manufacturing to trading mix as of FY19 was at 67:33). We expect the domestic tractor industry to outperform wider automotive space over FY20-22E as 1) it does not suffer from similar demand-side shocks on account of relatively stable rural incomes pursuant to remunerative crop prices, expectations of a normal monsoon in 2020, government focus on doubling farm incomes and...
