ICICI Securities Limited Broker Research reports

In FY20, IRFC had financed 76% of the rolling stock purchased and leased to the MoR (Ministry of Railways). IRFC's total revenue from operations increased by 19.3% from 9207.9 crore in FY18 to 10987.4 crore in FY19 and by 22.2% to 13421.9 crore in FY20, and was 7384.8 crore in 1HFY21. In FY18, FY19, FY20, and 1HFY21, net profit stood at 2001.46 crore, 2139.93 crore, 3192.09 crore and 1886.84 crore, respectively....

FIL has enhanced its focus on value added products like FDY, DTY which provide better margins than chips, POY. The share of value added products in Q3FY21 was ~ 85% of revenues. We expect the share of value added products to increase from 65% in FY20 to ~ 82% in FY22E. This would provide a fillip to the margin profile of the company. Also, the company's 30 MW thermal power plant is expected to be operational from April 2021, which is expected to result in annual power cost saving to the tune of | 4045 crore, thereby further aiding improvement in EBITDA margins. From a longer term perspective, the company is planning to foray into recycled...

Restructuring of business, large deals to drive growth We believe Wipro possesses all the key ingredients of robust growth in the long run. The company has strong full services capabilities across applications, infra, BPS and engineering, which should help it as integrated deals gain prominence. Further, the induction of a new CEO with focus on profitable growth make us positive on its future growth. This, coupled with the new CEO's focus on simplification of organisation, improving client mining, focus on fewer verticals and geographies to drive growth are...

Energy sold in Q3FY21, in the standalone business, grew 1.8% to 215.7 crore units vs. our estimate of 221.7 crore units while realisation was at | 7.69/kWHR vs. our expectation of 7.8 kWHR. Total generation was down 1.2% YoY at 120.9 crore units. PLF of the Budge Budge and southern plants for Q3FY21 was at 71% (69% in Q3FY20) and 13% (26% in Q3FY20), respectively. Revenues came in at | 1659 crore vs. our estimate of | 1729.3 crore, mainly on account of lesser-than-expected energy sold. On a consolidated basis, revenues came in at | 2539 crore, up 8.3%, which was...

Food inflation in December is down sharply at 3.4% compared to 9.5% in November and 11.0% in October. Within food, almost all items witness decline in growth led by de-growth in vegetables (10.4% in December vs. 15.5% growth in November). In food, only...

Digital acceleration, large deal continue to be growth drivers We believe the technology sector will witness multi-year growth in coming years led by traction in digital technologies. Infosys is in a sweet spot to capture this growth considering the investment it has made in digital technologies. This, coupled with increase in outsourcing in the US and Europe, vendor consolidation opportunities, captive carve outs and cost take out deals will further boost its revenues. In addition, Infosys has executed well on large deal conversion and is expected to be a key driver of...

Sales volume of city gas distribution (CGD) companies with higher CNG contribution are expected to fall in the range of 4-5% YoY as demand was not fully restored. Industrial PNG segment, however, witnessed faster recovery and are expected to report YoY growth. Domestic PNG sales volume are expected to remain steady. On the margin front, we expect an improvement YoY as CGD companies have not fully passed on lower gas cost to customers. On a QoQ basis, margins are expected to decline, to some extent, on account of an increase in spot gas prices during the quarter. For...

EBITDA to grow 12.4% YoY with bottomline up 15.3% YoY Increase in the value added segment revenue from the basket of specialty chemical companies along with a rise in realisation for selected companies can aid the operational performance. We expect our coverage universe companies OPM to expand 30 bps YoY to 18.4%, leading to EBITDA growth of 12.4% YoY. Bottomline is expected to grow 15.3% YoY, largely on the...