Monarch Networth Capital Limited Broker Research reports

Strong distribution reach across the country with 3400+ dealers. Growing market share in cables & wires business Strong market share gains opportunity due to shift from...

Relentlessly growing Indian auto component industry ...................................................................... 5 Rising credibility of Indian auto components ...................................................................................... 8 Vast domestic playing field ................................................................................................................. 9 Expanding domestic aftermarket ...................................................................................................... 10 Work towards localisation had already begun ................................................................................. 11...

We believe the recently announced merger of Tata Metaliks (TML) with Tata Steel Long Products Ltd. (TSLP) does not present a fair deal for the investors of TML. The future value of TML, once it turns into a 75% DI pipe (EBITDA level) driven business deserves a higher swap ratio as the merged entity will always be perceived and valued as a commodity play with substantial debt on balance sheet rather than a value added product manufacturer which is net cash. Although the entities undergoing a merger have overlapping operations, we believe that the synergies for TML are meagre as it already benefits from pooled resources and expertise...

We maintain a BUY with a slightly revised TP of Rs1,610 (earlier Rs1,650) as we remain positive on Lumax Industries (LMXI) strong entry segment client mix and excellent R&D; support of Stanley. Being the largest in India and catering to mainly the PV lighting (~67%), makes LMXI more resistant to reversion to halogen lamps as PV auto lighting systems are complex and difficult to meddle with. We are convinced that greater LED penetration, higher local content and the recently announced PLI...

We change our rating to BUY from ACCUMULATE with a revised TP of Rs670 (Rs650 earlier). FIEM's 2QFY21 performance has been outstanding on the EBITDA margin front and the Aisan Fiem Automotive India (AFI) JV also turned positive for the first time contributing positively to FIEM's PAT. As promised, the management continued its debt repayment of ~Rs100mn per quarter, started supplying to new models and continued to bag new orders. The management is being extremely prudent with its low capital expenditure and the company is on the right track to diversify its OEM client base. We feel that while 2QFY21 was buoyed by festive months too, the overall...

INDIA | Institutional Research | Consumer | 13 November 2020 Mayur Uniquoters l ACCUMULATE l TP: 290 Nothing artificial' about this bounce back Valuation and risks: We have slightly revised our earnings estimates by incorporating minor price hikes and accounting for conservative volumes from Volkswagen and Mercedes. Mayur's buyback of 0.75mn shares at Rs 400 per share indicates management's strong belief in the future business environment and after a successful buyback, the D/E should remain well below 1.0x. We continue to value...

limited given the nature of loan exposure, improved collection efficiencies (CE), and NIFTY *as on 12 Nov 2020; Source: Bloomberg, MNCL Research underlying collaterals. We are factoring in 18.5% / 17.1% CAGR in AUM/profit over...

INDIA l Institutional Research l Chemical l 6 November 2020 Oriental Carbon & Chemicals l BUY l TP: 1,030 Amber product showing green shoots Better domestic sales than exports: 2QFY21 saw the revenue decline by 6% YoY to Rs905mn. This decline was primarily due to lower volume and realisation of sulphuric acid and greater domestic sales i.e. OCCL maintained a domestic/export IS revenue split of ~45%/55% in IS. Lower depreciation and finance cost along with higher other income aided the bottom line leading to a growth of 26% YoY. The PAT...

Valuation and risks: We value RMT at an average of 20x Sept'22 PE and 12x Sept'22 EV/EBITDA (10% premium to its FY16-20 average 1-year forward multiple) to arrive at TP of Rs1,420. Despite lowering our FY21E and FY22E estimates to account for lower sales volumes, the cash accumulation (due to working capital release in 1HFY21) aids in maintaining our older target price. Key risks: Steel pipe demand slowdown due to the pandemic, delayed payments from EPC contractors...

We retain BUY on Central Depository Services Ltd (CDSL) with target price revised upwards to Rs560. In our IC note (https://bit.ly/3jAh1O7), we had highlighted CDSL as a play on the revival in capital market activities (as also evident from the test of significance study and stock ). On a systemic-basis, Beneficiary account (BO) addition coupled with delivery-based volumes has been on the rise. This in addition to surge in fund-raising activity by corporates and a steady rise in avenues for annual issuer charges bodes well for CDSL. This was also got reflected in its recent results that saw was a sturdy 69% YoY rise in revenues / 68% YoY rise in PAT. Empirical...