Colgate's 4QFY18 volume growth was a tad below our forecast at 4% - on a soft comparator, though (volume had declined 3% in 4Q LY due to the continued impact of demonetisation). Overall revenue, though, was significantly lower (470bps) vs expectations due to a rather sharp deceleration in net realisation growth to merely 1% in 4Q vs 4-6% in past 6M - possibly a function of Colgate's pre-GST price-hike having now anniversarised. On the positive side, toothpaste market share appears to have now stabilised for past 9M at c.53% without any incremental loss therein. On the flip side, management is pointing to a volume growth trajectory of just 4-5% level for the company going forward, which is a tad...
Steady operations; 8msf launch planned in FY19 Sobha 4Q profit was +42% YoY, on higher revenue recognition during the quarter. Revenue recognition increased by 35% YoY while contractual revenues improved by 24%. Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across regions. Bangalore reported improvement in sequential volume primarily contributed by Dream Acres and launches in last 2 quarters. The company launched 2 (0.63msf) projects during the quarter in Bangalore and Chennai. Net...
Inline results; Next phase of growth from East Dalmia Bharat (DBEL) reported revenue growth of 21% YoY in 4QFY18, led by volume growth (14% YoY) on rising demand in key markets - East (+17% YoY), Northeast (+14% YoY), South (+14% YoY) and Maharashtra (+14% YoY). Realisations declined marginally on a sequential basis and was 3% higher YoY. EBITDA/t at INR1,137/t declined 6% YoY as cost escalations more than offset the realisations improvement. Net debt declined by INR4.4bn in 4QFY18 and net debt-to-EBITDA reduced to 1.72x from 2x QoQ with cost of debt declining to 8% (8.9% in 4QFY17). Company has embarked on its next phase of growth through...
During 4QFY18, Bajaj Auto (BJAUT) reported EBITDA margin of 19.4% (+90bps YoY, +10bps QoQ) due to positive operating leverage accruing from 33% volume growth (despite a 160bps YoY drop in gross margin). With the upswing witnessed in oil price and ramp-up in newly added markets, export volume witnessed second successive quarter of 25%+ YoY growth. However, domestic 2W segment growth of 20.3% YoY in 4QFY18 was lower than the industry's 24.8%. The company is confident of regaining market share in FY19 with CT100 and the new Pulsar (with twin discs) acting as the primary growth drivers. BJAUT has taken a price hike of 1-1.5% during Mar'18 and May'18, to offset the impact of commodity...
Improving financials, but outgo to group rises 4x in 10 years We read ABB India's CY17 annual report and the key takeaways are as follows: a) healthy free cash flow generation continued as FCF yield stood at 1.5%, led by improvement in the NWC cycle, b) gross margins scaled up to 10-year highs, but a 4x jump in outgo to parent/group entities from 1.9% to 7.7% of sales has led to moderate growth in EBITDA/PAT (6%/12% in CY17 and -0.6%/-2.3% CAGR over the last 10 years), c) management indicates an improved outlook due to increased opportunities in transportation (railway modernisation and EV charging infra), energy efficiency, service income, renewables (although margins may...
Lower than expected profitability on higher pace of store additions DMart's 4QFY18 profitability is a tad below the kind of trajectory that one has come to expect from the company, and that was in part due to the accelerated store-additions that happened during the quarter - 14 new stores were added vs past 6M's run-rate of 4-5 per quarter. This likely caused a higher than expected rise in 4Q's SG&A; and some adverse impact on mix. Revenue growth is on expected lines 22.5% on reported basis which, as per our workings, translates to an intrinsic growth of 27-28%. Reported LTL growth for FY18 is a modest 14.2% which again, in our view, has the impact of GST-related changes ex which LTL...
Stable Operations; capital raise to improve growth profile GPL reported robust 4Q operational performance with pre-sales at INR10bn which was driven by Sohna Road project and sustenance sales. However reported margin was impacted by INR 1.5bn write-off taken in legacy commercial assets (Kolkata /Chandigarh). With improvement in 4QFY18 operations, GPL has achieved a pre-sales of 6.3msf/INR 50.8bn for FY18. Net debt declined by INR2bn during the quarter as company collections improved to INR 12.8bn (from INR 9bn in 3QFY18). Company is planning to raise INR 10bn through preferential issue resulting in 5.5% dilution. We believe the raised capital will enable company to increase...
Ambuja Cement (Ambuja)'s 1QCY18 EBITDA beat our expectations primarily on lower costs. Revenues rose 12% YoY primarily on realisation improvement of 8%. On a sequential basis, realisations remained flat. Volume growth for the quarter remained muted (+3% YoY) but EBITDA grew 29% YoY and exceeded expectations primarily on lower expenses. EBITDA/t was reported at INR 806/t (vs. INR 647/t in 1QCY17), as realisation growth and lower raw material costs more than offset freight and power/fuel cost escalations. We believe Ambuja's long-term growth is constrained by its clinker capacity and limited expansion plans (phase 1 expansion of 1.7MTPA of clinker at Marwar Mundwa expected by 2HCY20). As a result, we...
A consistent outperformer in a challenging industry UPL reported 4Q18 Revenue/EBITDA/PAT of INR 57bn / INR 12.2bn / INR 7.7bn (+7%/+8%/+6% YoY respectively), in-line with JMFe of INR 59.1bn/11.3bn / 7.87bn. Geographically, (i) India business grew 6% YoY with growth in new fungicides and successful farmer reception of 3 new launches, (ii) LATAM business grew 7% YoY driven by product launches throughout the value chain , (iii) Europe grew at 7%YoY(against the industry negative growth rate of 2%) driven by sugar beet herbicide portfolio (iv) ROW grew at 5% YoY driven by double digit growth in Africa and key South East Asian countries, and (v) North...
Shree Cement (Shree) reported 18% YoY growth in cement revenues primarily on volume growth (+8.7% YoY) and realisation growth (+10.3% YoY). EBITDA grew at 17% and EBITDA/t grew at 18% aided by realisation growth and lower other expenses partially offset by power/fuel and freight cost escalations. Power revenues declined YoY on lower power unit sales. Shree during the quarter commissioned 3.6MTPA and 2MTPA grinding capacities in Sriganganagar, Rajasthan and Aurangabad, Bihar respectively. Additionally company acquired Union Cement Company (4MTPA) in UAE for a consideration of USD304mn (USD75/t). Sustainability of cement demand and realisation trend would be key monitorables...
