Fee income at INR 10.2 bn continued to exhibit strong growth, up 26% yoy. The bank delivered a PPOP of INR 21 bn, +21% yoy/3% qoq while simultaneously improving opex/assets ratio (at 2.57% vs 2.66% in Q2FY18 and 2.56% in Q1FY19). Provisioning at INR 3.5 bn includes provision on investments of INR 1.3 bn and was up 63% yoy/down 25% qoq. Credit costs of 51 bps is lower sequentially owing to low MTM losses as compared to Q1FY19. PAT at INR 11.4 bn was up 15% yoy/ 11% qoq, translating into ROE of 11.6%. GNPA at INR 40.3 bn was up 3.4% qoq translating into stress of 2.15%, down 2 bps qoq. NNPA was 0.86%, flat qoq and PCR stands at 62.8% (+196 bps qoq). CAR stands at 18%. The...

Reliance Industries Ltd (RIL) reported net sales for the quarter at INR 1,433.23 bn (+11.3% QoQ, +56.7% YoY) driven by robust performance in the petchem and its consumer businesses retail and telecom. The petrochemical segment reported a strong performance with revenues at INR 437.4 bn (+8.6% QoQ, +56.2% YoY) from increase in volumes as well as higher realizations for petchem products as a result of higher crude prices. Production came in at 9.4 MMT (2.17% QoQ, 18.9% YoY) led by stabilization of the ROGC cracker and the new Px facility. Under the refining segment, the GRM stood at $9.5/bbl below market expectations while outperforming benchmark Singapore Complex margins by $3.4/bbl. The lower GRM was attributed to higher crude prices and tighter product cracks on a sequential basis. Retail segment reported a strong performance with revenues at INR 324.3 bn (+25.3% QoQ, +121.5% YoY) with 213.5% YoY growth in EBITDA driven by accelerated store expansion and strong value proposition. NPM for the quarter...

HDFC Bank (HDFCBK) reported PAT of INR 50.1 bn, +21% yoy/9% qoq translating into ROA/ROE of 1.8%/15.2%. Advances growth at 24.1% yoy/6% qoq was commendable given the tough environment, driven by 24% yoy growth in retail and 25% yoy growth in corporate book (loan mix retail/ corporate stands at 53%/47%). Unsecured lending continued to grow at hgiher rates with PL up 37% yoy and CC up 31% yoy. Business banking (BB) is witnessing growth taper off with yoy growth at 19% (vs. 45% avg over Mar'17-Jun'18). Auto grew by 16% yoy and CE/CV grew by 26% yoy. Though the bank is witnessing some pricing pressure in the CE/CV segment on account of competition, yields on the incremental book are higher. NII growth at 21% yoy/9% qoq lagged loan book growth (on yoy basis) on account of NIM compression (-10 bps yoy). Sequentially, NIMs were up around 10 bps, benefitting from the capital raise done during the quarter. Considering the rising rates scenario, the bank has been prudent in parking funds in tbills/bonds in order to create liquidity on the balance sheet (LCR at 118%). CASA, up 18% yoy (vs. deposits growth of 21% yoy), stood at 42%. The bank...

IndusInd Bank (IIB) reported a strong operational performance with advances growth of 32% yoy/8% qoq, led by robust traction in both corporate banking (+35% yoy/10% qoq) and consumer finance (+29% yoy/+5.6% qoq). Despite the above-industry growth, IIB witnessed NIM compression; contracted by 6 bps qoq/8 bps yoy to 3.94% resulting in NII growth lagging at 21% yoy/4% qoq. 25 bps increase in cost of funds qoq was disproportionately larger, offsetting 13 bps increase in advances yield. However, as re-pricing of the back-book catches up, we expect NIM pressure to subside. Opex at INR 15.3 bn grew 11% yoy/1% qoq translating into C/I of 43.4% (-80 bps qoq, -230 bps yoy). Despite strong PPOP growth of 22% yoy/4% qoq to INR 20 bn, heavy provisioning weighed down on bottom-line profitability. Provisioning at INR 5.9 bn (including INR 2.8 bn towards ILFS) translated into credit costs of 102 bps (vs. 63 bps average for preceding 5 qtrs). The bank continued to improve on its asset quality with GNPAs at 1.09%, down 6 bps qoq / NNPAs at 0.48%, down 3 bps qoq. Net accretion to GNPAs during the quarter was INR 0.4 bn (11 bps net slippage). Capital...

OVERVIEW concentrated India, diversified financial services Annual Report FY18 The Indian financial services space was always inhabited by a few visionary groups for whom demonetisation was a boon and the event only accelerated their agenda of financialization. One such visionary group is Kotak which offers financial products across the board credit, deposits, wealth management, broking, life insurance, general insurance, investment banking, asset management, auto loans. With such a vast array of products in its kitty, the opportunity to cross-sell across the group is large. For example, 50% volume for life and general insurance comes from Kotak's own distribution network. In this note, Decoding Kotak, we have tried to dissect each of the main subsidiaries that we believe will continue to grow larger and will be instrumental in driving synergy benefits and cross-sell opportunities as well as improving profitability level at the group level. While 811 continues to be the bank's strategy to acquire customers, our recent interaction with the bank...

CCAvenues registered a growth of 128% YoY in payment processing to INR 102.45bn. Total number of transactions processed volume stands at 27mn translating into ticket value of INR 3,795/transaction. Adjusting the exception items to the tune of INR 75mn, EBITDA for the qtr remained at INR 45.9mn (-78% QoQ, -69% YoY). Adjusted OPM for the qtr stands at ~5%, which was dropped by 1557bps YoY. The drop is largely attributable to management's strong focus of improving the transaction size resulting into higher payment processing charges along with delay in recovering MDR charges for transactions below INR 2000 had impacted financial performance during the qtr. Adjusting exceptional item to the tune of INR 107mn (INR 32mn impairment on investments, INR 50mn stamp duty impairment, INR 25mn MDR...

Revenue grew by 24.4% YoY to INR 20.9bn against our estimates of INR 19.6bn. The growth was led by agro processing segment (+39% YoY). Further, steady growth from Hi-tech and plastic segment also supported overall growth for the qtr. The revenue from hi-tech segment was up by 17% YoY to INR 10.1bn, while the same from plastic remained higher by 15% YoY to INR 5.9bn supported by low base. OPM dipped by 101bps YoY to 12.9% due to contraction in operational performance into Hi-tech and agro segments. OPM for both segment fell by 78bps YoY & 229bps YoY respectively. On the other side, plastic segment OPM improved by 65bps YoY to 9% due to improvement in the sales mix of PE. EBITDA grew by 15.4% YoY to INR 2.7bn against our estimates of INR 2.6bn. PAT was up by 84.4% YoY to INR 0.8bn against our estimates of INR 0.5bn. The beat is due to higher other income (+356% YoY)....

Net sales came in at INR 12.8 bn (+24.1% YoY, +6.0% QoQ) due to increased volumes from both CNG and PNG segment. Total gas sales volumes were reported at 505 mmscm v/s 446 mmscm in Q1FY18 (482 mmscm in Q4FY18). CNG volumes increased by 10.1% YoY while PNG volumes increased by 18.3% QoQ with the highest growth coming from the industrial/commercial segment at 28.9% YoY. Gross margins were dented by 475 bpd YoY and 185 bps QoQ to 42.4% due to increased cost of NG resulting in a higher RMAT (+35.3% YoY, +9.6% QoQ). OPM was further negatively impacted by 381 bps YoY and 108 bps QoQ to 22.9% from higher operating expenses (+18.3% YoY, +2% QoQ). EBITDA stood at INR 2.95 bn (+6.4% YoY, +1.3% QoQ). Other income was higher 46.8% on a YoY basis at INR 262 mn. However, this was negated by higher finance costs (+55.6% YoY) resulting in a PAT margin of 13.7% (-188 bps YoY and -73 bps...

The Company reported net sales at INR 6047 mn as against our estimates of INR 5733 mn; which grew by 34% YoY and 10% QoQ. Better realizations under Specialty Carbon Black (SCB) segment and Coal Tar Pitch (CTP) segments combined with healthy volumes aided the top line growth for the company. EBIDTA (excl. FX losses) stood at INR 1408 mn (+40% YoY; 11% QoQ). EBITDA/ton surged to INR 14,190/ton (+33% YoY; +9% QoQ). OPM came in at 23% in line with our estimates of 22.4% on the back of lower other expenses....

Net sales came in at INR 172.9 bn (+51.7% YoY, +12.1% QoQ) driven by robust volumes across the petchem, trading and transmission business. Gas transmission and gas trading volumes increased by 7.1%/23.9% to 107/97 mmscmd respectively, while the petchem segment registered a volume growth of 43% YoY to 173 TMT. Gross margin declined by 444 bps YoY on account of higher direct costs (+60.8% YoY). However, this was partially offset by lower other expenses which resulted into an OPM of 13% (-368 bps YoY, +198 bps QoQ). EBITDA stood at INR 22.4 bn (+18.1% YoY, +32.3% QoQ). Despite lower finance costs (-56.5% YoY), NPM declined to 7.3% (-171 bps...

Mahanagar Gas Ltd. (MGL) reported revenues of INR 6.19 bln, (+16.7% YoY and 5.5% QoQ) led by higher volume growth. Total sales volumes for the quarter stood at 2.9 mmscmd 2.1 mmscmd for CNG and 0.8 mmscmd for PNG. CNG sales volumes increased 12.6% YoY while PNG sales registered a growth of 10.1% YoY. EBITDA stood at INR 2.1 bn, up +4% YoY, however the EBITDA margins declined 416 bps YoY due to a one-time payment to OMCs with respect to increase in marketing margins and also due to rise in other expenses (+24.3% YoY). Other income for the quarter increased by 25.8% YoY. However, it was negated by an increase in D&A; by 19.8% YoY thus leading to only a marginal growth in the PAT on a YoY basis which came to INR 1.28 bn (+3.2% YoY, +22.5% QoQ)....

The revenue of the company grew by 36% YoY to INR 10,785 mn in line with our estimates of INR 10706 mn. The revenue growth was led by higher demand from value added products under speciality segment (+35% YoY) as well as pharmaceuticals segment (+41 YoY). EBITDA for the quarter stood at INR 1879 mn (+36% YoY; 4% QoQ). Operational performance was impacted by INR 289 mn on account of...

Suzlon reported revenue a fall of 50.5% YoY to INR 12.8bn against our estimates of INR 16.05bn. The subdued growth is on account of lower than estimated execution, which was 155MW against our estimates of 200MW. There was solar revenue in Q1FY18, which was not the case in Q1FY19 and hence other revenues declined from INR 3.31bn in Q1FY18 to INR 0.27bn. EBITDA excl fx remained at INR 77cr against INR 475cr in Q1FY18 due to poor executions which impacted operational performance of WTG segment. WTG segment reported EBITA loss of INR 3.85bn against a profit of INR 2.1 bn in Q1FY18....

Robust growth on back of capacity addition plans: During Q1FY19, net sales for the company came in at INR 3509 mn as against INR 2959 mn in Q1FY18 and INR 3128 mn in Q4FY18. The growth in the top line was attributed by higher realizations coupled with increased infrastructural activities driving demand for Phthalic Anhydride (PAN). Further, on account of Company's dominant presence in India combined with capacity expansion plans (PAN addition of 53,000 Tons Per Annum) and foray into downstream products (plasticizers), we believe IGPL would be one of the key beneficiaries in favorable market scenario. Likewise, we expect...

ITC posted its Q1FY19 results which were in line with our estimates, revenue stood at INR 107 Bn (+7.6% YoY). The top line was mainly driven by Food-FMCG, Hotels and Agri segment, which grew by 10.3%, 12% & 14% YoY respectively, this was mainly due to revival in consumer demand and increase in room occupancy rate. EBIDTA stood at INR 42 Bn (+12% YoY), with OPM at 39.2% (+161 bps YoY). Lower operating overheads (-3% YoY) has resulted in better margins. PAT for Q1FY19 stood at INR 28.2 Bn (+10.1% YoY),...

UPL reported revenue growth of 11% YoY to INR 41.34bn against our estimates of INR 41.06bn. The growth was led by steady growth from agro activities (+7.6% YoY) supported by higher growth from LATAM (+17% YoY) along with decent growth from India market (+12% YoY) due to low base. OPM expanded by 34bps YoY to 20.5%, which led EBITDA to up by 12.9% YoY to INR 8.5bn against our estimates of INR 8.15bn....

EBIDTA during the quarter came in at INR 369 mn which was up by 54.3% YoY and down by 8.5% QoQ. OPM stood at 20.7% impacted by changes in inventory and was broadly in line with our estimates of 20.8%. Further, the bottom line stood at INR 177 mn growing by 40% on YoY basis while taking a hit of 24% on sequential basis mainly on account...

Heritage foods Ltd posted its Q1FY19 which was below our expectation. Net revenue stood at INR 6.4 Bn (+4.1% YoY), as against our estimates of INR 7 Bn, mainly due to a recovery in demand resulting from reduced prices for dairy products. EBIDTA was at INR 460 Mn (+70.9% YoY), with OPM at 7.2% (+280 bps YoY). Reduction in milk prices and lower operating expenses has resulted in better margins. PAT for Q1FY19 stood at INR 207.9 Mn (+12% YoY), with NPM at 3.2% (+23 bps YoY). Higher tax out go (+88% YoY) and a...

Reliance Industries Ltd (RIL) reported net sales for the quarter at INR 1,287.5 bn (+10.1% QoQ, +54.3% YoY) driven by robust performance in the refining, petchem and digital services business. Under the refining segment, the GRM of $10.5/bbl was in-line with market expectations while outperforming benchmark Singapore Complex margins by $4.5/bbl. GRMs were marginally lower QoQ because of decrease in naphtha, gasoline and jet fuel cracks as against Q4FY18. On a QoQ basis, gasoline cracks decreased 10.4% QoQ at $8.6/bbl while jet kerosene cracks decreased 6.6% QoQ at $12.8/bbl as compared to Dubai Fateh crude. The petrochemical segment reported a strong performance with revenues at INR 402.87 bn (+5.7% QoQ, +58.2% YoY) from higher realizations (+24% YoY) for petchem products as a result of high crude prices as well as strong volume growth driven by the stabilization of the petrochemical projects. Petchem EBIT increased 22.1% QoQ and 94.9% YoY led by higher YoY volume growth supported from stabilization of the ROGC cracker. Petrochemical...

GCPL Ltd. reported Q1FY19 revenue of INR 24.7 Bn (+13.7% YoY), as against our estimates of INR 24 Bn. The India Business recorded sales of INR 13 Bn (+9.5% YoY), the domestic business was driven by volume led growth of 14% YoY. The International business sales grew by 9% YoY on a comparable basis, the international business improved mainly due to revival in Indonesia and Africa business. EBITDA for Q1FY19 was at INR 4.4 Bn (+27.1%), with OPM at 17.9% (+189 bps) on consolidated basis mainly due to operational efficiency. PAT for Q1FY19 was at INR 4 Bn (+80% YoY), with NPM at 16.4% (+602 bps YoY). PAT improved mainly due to tax credit...