Q: What is the impact the recent RBI guidelines on stressed assets impacting Yes Bank and the credit costs outlook thereof? For Yes Bank, the impact of the recent RBI guidelines on our Restructured Book as well as on exposures to entities with systemic exposures above INR1Bn is minimal and it doesn't alter the Bank's outlook on its credit / asset quality parameters. The Bank has been...
We upgrade Oracle Financial Services Software (OFSS) to BUY on a 19% upside. The stock's participation in the broader IT sector rally over the last two months has been restricted by muted 3QFY18 results; it has also under-performed global peers over this period. However, given management's commentary of a robust deal pipeline + a seasonally stronger period ahead, we find current levels attractive to play to its structural strengths. We also raise our FY19/FY20E EPS by 6.6%/6.8% on superior margin management. Our revised INR 4,480 TP...
Beat on cost controls; growth constrained by clinker capacity Ambuja's 4QCY17 EBITDA exceeded expectations primarily on lower costs. Revenues grew by 20% YoY primarily on volume growth of 17%. Realisations grew by 2% YoY; remained flat sequentially. EBITDA/t, reported at INR865/t vs INR658/t grew realisation growth, lower raw material cost and other expenses more than offset the freight and power/fuel cost escalations. We believe Ambuja's long term growth is constrained by the clinker capacity and limited expansion plans (phase 1 expansion of 1.7MTPA clinker at Marwar Mundwa expected by 2HCY20). As a result we expect Ambuja's market share to decline in the interim and see...
Dismal performance in 9MFY18; volume off take a key monitorable Indo Count Industries (ICNT) reported a weak set of numbers for 9MFY18, driven by a) decline in the volume of bed sheets exported to the US, b) INR appreciation and c) higher costs. Margins for 9MFY18 compressed 604bps YoY to multi-year lows. 9M PAT declined 42% YoY to INR 1bn, below our estimates of INR 1.1bn. The company has completed phase-I capex to augment capacity from 68mn mtrs to 90mn mtrs. Management maintained FY18 volume guidance at 56mn mtrs. Cotton price movement and the off take in volume going forward remains the key monitorable. The Board has...
PAT +52% YoY; working capital pressures creep in DBL's 3QFY18 net profit grew 52% YoY to INR 1.65bn driven by 40% revenue growth from better execution of OB base. Although interest cost has remained flat QoQ, the benefit of refinancing INR 6bn of debt through cheaper NCDs will be evident in 4QFY18. However, net debt increased to INR 29bn at 9MFY18 (vs. INR 24bn in 1HFY18) on pending receivables of c. INR 8bn from a) GST receipts from customers and b) delays in receiving mobilisation advances as announcement of project appointed dates got postponed. The OB fell from INR 175bn (3.5x FY17 sales) in Mar'17 to INR 123bn (2.4x FY17 sales), as NHAI ordering remained...
Repco Home Finance (Repco) reported 3QFY18 earnings of INR 485mn, up 5% YoY. Loan growth moderated to 9.6% on account of i) Sand Mining ban in TN after Madras High Court's order in Nov'17; ii) sluggish LAP growth (flat YoY) with company focusing on lower ticket LAP iii) higher repayments due to increase in competition and iv) slower growth outside TN in Kerala, Karnataka and AP due to state specific issues. Recently, Supreme Court has issued an interim stay on this order. Therefore, if the sand mining ban is revoked; this would help in reviving growth. Other highlights: i) There was marginal pressure on asset quality as GNPL ratio increased 10% QoQ while Net NPL increased 7% QoQ. GNPL ratio increased...
Quarterly performance tracking aheadraising TP to INR 225 GTPL's 9M-FY18 results point to a better-than-expected performance of the video [cable] business, and therefore we raise our TP to INR 225 from INR 200 previously, based on: (1) higher EBITDA forecasts; (2) lower capex; and (3) DCF rollover to Mar-19 from Sep-18. GTPL remains the best run and the most undervalued video business among listed MSOs, having exposure to a secular home-broadband-growth opportunity. Our revised forecasts imply a 47% EBITDA growth in FY18 [versus 37% previously], followed by an 18% CAGR over the next two years [FY18E-20E]. PAT is likely to triple over a three year...
Stable operations; Chennai Mall back on track Phoenix Mills (PHNX)'s 3QFY18 profit increased 46% YoY as reduction in interest cost and improving operations across assets improved profitability. Consumption and trading density of its retail assets grew 8% and 6% YoY, respectively. While Kurla and Bangalore malls recorded consumption increases, Chennai and High Street Phoenix (HSP) saw muted consumption growth during the quarter. In HSP, 11% of leasable area became operations in Dec'17; Chennai consumption has stabilised on completion of category changes introduced in the mall. Rentals continued to improve across malls (10% YoY) and hotel revenues...
Prataap Snacks, owner of the Yellow Diamond' brand, has established a sizeable presence in the Indian Snacks industry over the past few years by capturing a reasonable share in the Extruded Snacks space through its product innovations, intelligent marketing campaign and focus on distribution which has helped quadruple its market share over a 6-year period. This drove 27% revenue CAGR over FY13-17 but the company's current scale is still way too small at INR9bn p.a. when compared to the size of the opportunity; the organised snacks market is a c.INR220bn (c.$3.5bn) one. We believe Prataap can easily sustain high-teens revenue growth rate over next few years its high exposure to faster-growing sub-segments...
Infosys (INFO) reported a modest 0.8% QoQ constant currency (CC) revenue growth in 3QFY18 with stable operative metrics. Management commentary on the outlook was optimistic even though the -0.6%-3.1% band for the implied 4QFY18 USD revenue growth guidance, widest in at-least the last 3 years, suggest a caution from any lag impact of the August 2017 events, in our view. Like TCS, INFO has done well on cost containment and while the common levers appear peaking, we expect margins to remain stable. The Our FY18/FY19 EPS estimates are broadly unchanged; the impact of lower other income (due to the recent buyback) has been largely offset by the reduced share-count + a lower effective...
