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Sharp cost focus expected to pay dividends Despite soft revenue performance during the quarter (~20% capacity utilisation), BFL nearly managed EBITDA breakeven in standalone and consolidated operations. Its focus on reducing breakeven levels by downsizing costs, enhancing efficiencies while simultaneously controlling capex spends is seen leading to improvement in margin trajectory. BFL expects to continue to post sequential improvement in coming quarters and return to previous margin levels on these cost initiatives. We build 17.4%...
Less impact of pandemic on overseas business Sharp fall in domestic revenue by 77% YoY was partly arrested by relative lower fall in oversees revenue by ~17% YoY. Hence, consolidated revenue fell ~47% YoY. While dealers managed to liquidate their inventory holding by ~60% in Q1FY21, management reiterated a demand recovery post lockdown relaxation. While we continue to expect H1FY21 to be challenging, recovery may start from H2FY21 onwards with lockdown restrictions easing. On domestic front, revenues may grow at 16% FY19-22E, driving overall...
In the current quarter, eClerx witnessed demand and supply side challenges. However, we believe the company could see improving revenue growth in coming quarters led by receding supply side challenges and improving demand. eClerx also witnessed healthy deal wins upwards of quarter million dollars. A few deal wins include a Nordic banking client, food business client and higher wins from existing clients. In addition, the company expects CLX business (that we believe contributes 18% to topline) to see improvement in coming quarters. Hence, we expect eClerx to witness a gradual...
Farm sentiments are bullish with VST seeing healthy demand for its product profile. Key highlights from the call include: (i) VST expects tractor sales volume to grow ~10-15% in FY21E with power tiller sales volume growth guidance at 15-20% in FY21E; (ii) Noticeably, more and more farmers are buying power tiller on cash basis (~58-59% in July 2020) and not withholding purchase for want of state subsidies, a big positive surprise; (iii) VST is in final stages of negotiation for tie-ups in the contract manufacturing space for power tillers given the import restrictions (lower price points;...
India formulations growth core to overall growth Domestic formulations (~63% of FY20 revenues) grew at 6.5% CAGR in FY16-20. The subdued growth can be attributed to high concentration of acute therapies and one of the lowest MR productivity. With a market share of ~0.7% and overall rank of 29, the company is still a marginal player with some top brands in smaller categories like stomatologicals. However, with a positive outcome of restructuring exercise and likely improvement in MR productivity besides therapy calibration, we expect Indian formulations to...
Post decline in Q1FY21; order book to increase, going forward RMTL's order book as on August 1, 2020 was at | 860 crore (| 1380 crore as on June 1, 2020). Higher margin SS order book was at | 483 crore (| 660 crore as on June 1, 2020) with CS orders of | 377 crore (| 720 crore as on June 1, 2020). In terms of domestic and exports mix, domestic orders were at | 533 crore while export orders were at | 327 crore. Of the | 533 crore domestic order book, | 373 crore is in the SS segment while balance | 160 crore is in the CS segment. Of the | 327 crore export order book: | 110 crore...
Mining volumes expected to revive gradually over FY21E During the quarter, sales volumes came in at 53177 MT, down 16.4% YoY dragged down by cement/other segment volumes. Mining segment volumes came in at 41055 MT, up 1.0% YoY and cement & others segment volumes came in at 12112 MT, down 47.3%, YoY. Mining segment is expected to at least sustain the run rate of 40-41000 MT in coming quarters while non-mining segment reduced owing to slower infrastructure, utilities spend across the world. The company did not face much supply chain...
Post Covid-19, the domestic auto industry is expected to see gradual volume improvement, with rural-facing (tractors, motorcycles) and personal mobility enablers (passenger cars) expected to outpace CVs and public transport categories. Bosch expects the industry to take four to five years to return to peak FY19 volumes, pending affirmative policy intervention (GST cut, scrappage policy, etc.). While overall demand picture remains subdued for Bosch courtesy high exposure to CV space and dwindling presence of diesel powertrain in India, we expect it to outperform its OEM clients courtesy (1)...
