Ashok Leyland (ALL) reported 0.8% yoy and 40% qoq growth in the topline. Volume dip was at 1% yoy while growing at 32% qoq. The realizations were up by about 2.2% yoy and 6% qoq. The company's market share rose by 180 bps to 36.9% by the end of the quarter and this year. Margins came in at 11.1%, 70 bps down yoy and 80 bps up qoq as RM costs were up, high margin...
We downgrade our rating on Indusind Bank from BUY to Market Performer with revised TP of 1693 on worries of higher credit cost than guided by the bank and likely change in the mgmt. For Q4FY19, the bank reported PAT of 3.6 bn which was down by 62% yoy led by higher provisioning on IL&FS; exposure while operating profit growth was strong at 34%. Importantly, the bank has exposure to the troubled cos including names like Essel Group and Reliance ADAG Group. Jet Airways is 1.9% or 35.4 bn while these are yet to be recognized as NPAs. In our view, there is outsized possibility of these assets turning into NPAs leading to higher credit cost. In our view, credit cost estimate could be at 1.2% for FY20 vs. mgmt. guidance of 0.6%....
We reduce our rating on Yes Bank from BUY to SELL with revised TP of 124, valuing the bank at 1x FY21e ABV on concerns of eroding balance sheet strength, rising NPAs, capital raising concerns and weak visibility of profits. In our view, credit cost for FY21 could disappoint street by large margin which we estimate to be at 1.8% and a miss on FY20 mgmt guidance of 1.25% vs. our estimation of 1.5%. Profits will drop over the next 2 yrs due to higher slippages and provisioning. Yes Bank could see fall in profits to the tune of ~25% in FY19e to 12.9 bn and ~70% in FY21e to 3.9 bn. Capital raising would therefore come at lower multiples going forward....
Apollo's standalone net sales slowed down to 6% yoy while falling by 3.1% qoq to 29.6bn. The yoy growth came on the back of a strong India replacement volume growth, out of which the Truck segment volumes grew at 8% and car segment volumes grew 7%. OEM segment sales remained in negative territory. On a sequential basis, volumes declined as OE segment declined much steeper. The company did not take any price change in Q4 though RM prices started to move down and they had rolled back a price hike last quarter. RM prices saw a drop of 3.7% qoq as the RM price basket showed a benign growth. Hence, at the EBITDA levels, margins improved to 11.8% marginally by 60 bps, while on a yoy basis they still saw a drop of 260 bps. Depreciation moved up by 26% yoy as AP...
micro loans reported growth of 40%. Non-micro loan AUMs growth was at 37.3% yoy. Liabilities of the bank are gaining more traction CASA touching 41%, retail to total deposits forming 77.4%. Margins improved further during the quarter from 10.5% to 10.7% led by improvement...
via the launches of Destini and Maestro Edge, as we see industry wide shift from 110cc to 125cc on the scooters. In this way, we believe that despite competition from Bajaj Auto, the company will be able to maintain its overall market share at 50%. On BS6 pre-buy, HMCL indicated that there would be a meaningful incentive for customers to buy a BS4 product over a BS6 product. Prima facie it looks...
MSIL witnessed a -0.7% growth in volumes in Q4 and 5.5% growth in FY 2019. This has been a result of several macro headwinds such as rising fuel prices and interest rates, dampening sentiments, intensifying competition and subdued urban demand. Exports business also saw a negative growth...
J M Financial has become a full-fledged financial service conglomerate offering services across the spectrum including lending services, asset management, ARC business, investment banking, wealth management, broking and securities business and private equity. Over the years, its various business segments have achieved decent size and scale and are higher profitable as well. For e.g. mortgage lending business has ROA/ROE of 4.3%/17.4%, AMC's ROE 23%, ARC's IRR is 34%. Management approach to grow assets conservatively but good quality assets has worked well for them. Despite NBFC crisis which has been one of the toughest, asset quality of company has held up well. In nutshell, business model has become more resilient and less volatile and less dependent on uncertain securities business. It is present across all high-growth and important business lines where the size of opportunity is big. More importantly, management bandwidth is strong. Although, recently, Q3FY19 performance has been marred by higher borrowing cost, we are optimistic that growth will resume in FY20 and higher...
Endurance Technologies (Endurance) is one of the biggest suppliers of components to 2wheelers and 3-wheelers in India, having core-competence in aluminium casting, transmission and suspension products. The company is likely to benefit from new customer wins, stricter safety norms in India and increasing demand for aluminium content in passenger vehicles across India and Europe. The company is growing at a rate faster than its peers as well as its underlying industry, hence we believe that the premium valuations of 24x on FY21E earnings, at which the...
LCV merger, better product mix drive margins, guides for muted FY 21 Weak volumes and realizations impact topline Ashok Leyland (ALL) reported 11.1% yoy and 16.9% qoq fall in the topline. Volume dip was at 6% yoy and the realizations were down by about 5%. The company's market share dipped by 1% yoy close to ~32% in the Trucks segment and ~40% in Buses segment. Margins came in at 10.3% better than market estimates as input costs weakened in December and product mix improvement was seen in the form of higher sale of high margin products like tippers & MAVs. Despite higher discounts, the company took price hike in November. RM to sales came in at 70.1% down from 71.4% yoy and...
as well as Advertising revenues grew strongly at 24% and 13% yoy respectively. Management highlighted that despite dip in market share in Q3, there has been a good revival in January. Cable TV revenues grew 24.3% on new tariff regime implementation, while DTH revenues grew by 24.1% pulling up the overall domestic Subscription revenues by 24.2% yoy. Also the continued process of...
Domestic market growth strong despite OEM slowdown in Q3 Margins impacted by higher RM costs Apollo's standalone net sales grew by 16% yoy and 0.5% qoq to 30.6bn. The yoy growth came on the back of 11% blended volume growth, out of which the TBR segment volumes grew at double digit yoy, while PCR de-grew in mid-single digit. OEM segment sales declined, however Replacement segment showed a double digit growth on a yoy basis. The company rolled back price hike of 2% (taken earlier in the quarter) viewing lower demand later. RM prices saw a hike of 13% yoy and 2% qoq on rubber price hike as well as fuel price surge during the quarter. Hence, at...
Yes Bank Q3FY19 results were exceedingly good in terms of asset quality barring IL&FS; account. There is change in the guard with Mr.Ravneet Gill appointed as new MD&CEO; replacing Mr.Rana Kapoor. NII growth was strong at 41% yoy led by strong loan growth and stable margins. However, operating profit growth was muted due to fall in other income. MTM losses on corporate bonds resulted in overall fall in other income by 37% yoy. During the quarter, the bank declared IL&FS; account as an NPA it has total exposure of 25.3 bn ( 19.1 bn is added in NPAs while 6.2 bn remains standard). Barring this one-off, gross slippages were at 3.8 bn vs. 16.3 bn last quarter. Major headwind on the stock wrt Mr.Rana Kapoor exit seems to be waning with Mr.Ravneet Gill...
Q3FY19 results of the bank were in-line with our expectations PAT grew by 30% yoy to 3.3 bn. Balance sheet growth was strong credit grew by 24% yoy led by corporate and retail loans. Core fee income (CEB + loan processing) grew by 34% - which is one of the highest growth we have seen in the recent past. Slippages were less at 4.3 bn vs. 4.8 bn last quarter. The bank has front-loaded some of Kerala flood related slippages during the quarter. On the other hand, positively, RBI audit of the bank for the year FY18 is done and there is no NPA divergence to be reported. Cost ratios inched up during the quarter to 50% (up by ~220 bps) due to higher provisions on gratuity (led by increase in gratuity limits) and rise in CSR expenses....
In our view, better days are ahead for the bank in terms of asset quality going forward. Large part of restructured assets has already been recognized as NPA by the bank (5.8 bn, down 77% in 4 yrs). Of this 5.8 bn of restructured stock, 2.8 bn is exposure to Air India and balance 3 bn are...
By the end of FY 18, the CV industry grew at a growth rate of 19.4%, while by 7M YTD FY19, it has grown by 42%, and is expected to end the year with at least 15-20% growth. Despite the short term trend of slight weakening of CV sales on the back of liquidity crunch, rising interest rates and fuel costs, we believe the long term trend is intact...
and fuel costs the long term demand is intact as BS VI implementation and scrappage policy will trigger a strong and continuous demand for the sector. The company being market leader in axles business is well placed in gaining incremental business from its...
associated with Marazzo. FES margins zoomed up at 20.1% which was a surprise to us despite higher RM costs. Higher other income (up by 50% yoy) and lower tax rate at 23% (due to deferred tax asset of 1.34 bn) led to net profits to be higher at 23.9%, however, adjusted net profits grew by 14% to 15.2 bn....
and yoy. Due to reduction in tax sops in Pantnagar, the tax rate came in at 29.7% qoq. Net profits however surged by 41.2% yoy as topline and operating profits moved up strongly. Resignation of the company's MD and CEO Mr Vinod Dasari may act as an overhang on the stock....
Yes Bank showed dismal performance PAT declined by 24% qoq (4% yoy) to 9.6 bn largely led by higher credit cost. Gross slippages escalated sharply for the quarter at 16.3 bn ( 5.6 bn qoq) led by one large corporate account defaulting amounting to 6.3 bn (most likely it expects upgrade in this account in Q3). Bank has exposure to IL&FS; amounting to 26.2 bn which is currently recognized as standard account in the books of the banks (lent to SPV and no holdco exposure). Investment provisions were also high due to a) 2.5 bn provided for corporate bonds b) 0.9 bn amortised MTM...
