15 August 2020 Engineers India (ENGR)s revenues were 14% higher than estimated; however, the lack of operating leverage led to a 16% miss in EBITDA. Margins in consultancy projects were weak at 14.3% v/s 39.3% in 1QFY20. Order inflows plunged 91% YoY to INR810m, with another INR160m worth of orders received thus far. Order inflows were primarily from the Hydrocarbon segment. The order book (OB) declined 20% YoY to INR91.2b, with OB/rev at 3.1x, the lowest in last four years. With superior execution and lower order inflows, a depleting order book remains a concern, although it is not alarming at this stage. On account of lower order inflows and a hazy outlook for FY21E, we reduce our FY21/FY22E EPS by 14%/5% and maintain our Buy rating, with TP of Revenue fell 36% YoY to INR4.7b (14% above our estimates). EBITDA was down 85% YoY to INR214m (16% below our estimate). The EBITDA margin stood at 4.
15 August 2020 Endurance Technologies (ENDU) 1QFY21 performance was a mixed bag as the revenue miss was off-set by good cost management. ENDU continues to outperform the underlying 2W industry, which should further widen due to new customers and content increase. Thus, we believe it is the best proxy on the 2W industry in India. We have upgraded our estimates for FY21E by 15% to factor in the cost cutting initiatives in both its businesses. This translated to recurring loss of INR249m (v/s est. S/A revenues declined ~73% YoY to ~INR3.6b (v/s est. ~INR5.3b) as compared to the underlying 2W industry production decline of 78.5% YoY.
14 August2020 Shriram Transport Finance (SHTF)s 1QFY21 PAT halved to INR3.2b (6% miss). While growth was muted, collection efficiency improved MoM. SHTF also cut opex by 30% QoQ. We modestly increase FY21 estimates to factor higher AUM and lower opex. Our credit cost estimate of 3.5% for FY21 remains unchanged. on the books stood at INR115b as of 12 Aug20. With the COVID-19 provisions, SHTF has increased its Stage-3 PCR from 35% to 39% and Stage-1/2 PCR from 3.1% to 3.7% QoQ. Less than 10% of customers would need restructuring, according to management. Due to a change in accounting policy, the fair value of hedges is now routed through OCI rather than the P&L.; Since the IL&FS; crisis, the company has diversified into new borrowing sources such as retail NCDs and ECBs. The share of ECBs in total borrowings increased meaningfully to 18% YoY from 10%.
14 August 2020 HMCL has posted a notable operating performance in these tough times. The narrative around rural demand is positive, but supply chain ramp-up and broad-base demand are important for demand sustainability. We upgrade our EPS estimate by 9% for FY21 to factor faster volume recovery. But, we maintain our Neutral rating, with TP of INR3,045 (~16x Sep22 S/A EPS + INR98/share for Hero FinCorp). Revenues fell 63% YoY to ~INR29.7b on a ~69% YoY decline (-58% QoQ) in volumes. Realizations increased 21% YoY (+12.8% QoQ) to INR52.7k (v/s est. of INR48.9k), driven by BS6-related price increases and no discounts. didnt load contribution margins on the BS6 cost pass-through. Lower other expenses supported EBITDA margins to 3.6% (v/s est.
14 August 2020 Reported EBITDA was higher than est. INR25.2b and INR21.5b in 1QFY20), led by lower other expenditure. Opex decreased in INR terms and stood roughly at ~USD2/bbl during the quarter. Inventory gains for the quarter stood at INR5.6b (on refining loss of INR4.4b and marketing gains of INR10b). Adj. for inventory, EBITDA stood at INR34.1b (v/s INR26b in 1QFY20). The company reported forex loss of INR0.6b.
Divestment-related measures (part receipt of International Shipping business, Arutmin, and Tata SED) and the infusion of INR26b from promoters would continue to aid debt reduction. The approval of a tariff hike at Mundra, possible benefits from the merger of CGPL & Tata Power Solar with TPWR, and favorable InvIT valuations provide upsides. Divestment-related measures (International Shipping business, Arutmin, and Tata SED) and approval for the infusion of INR26b from promoters would continue to aid debt reduction. The approval of a tariff hike at Mundra, merger of CGPL & Tata Power Solar with TPWR, and favorable InvIT valuations provide upsides. It expects these to be at a similar While certain clarity is pending with respect to upcoming new regulations for Divestment-related measures (International Shipping business, Arutmin, and Tata SED) and approval for the infusion of INR26b from promoters would With normalization in its EPC businesses and some WC, and lower interest costs, we expect EPS to increase at a 910% CAGR over FY2023.
EBITDA was down 40% YoY to USD219m on like-to-like basis (excluding Aleris) due to the impact of COVID-19. Aleris) with EBITDA of USD34m (included in 1QFY21 results). Re-iterate *estimate based on ex-Aleris basis, hence, not comparable Beverage can volumes declined to low single-digit during the quarter as weakness in South America and Asia can volumes was offset by strong demand Demand remains resilient in North America and Europe due to strong in-house consumption trend. The company achieved record shipments in automotive in China during the However, volumes recovered gradually during the quarter led by restocking demand from customers and are back to pre-COVID levels. Demand is also gradually improving on MoM basis, led by strong demand from Management expects aluminum-scrap spreads to remain strong in North Interest cost should stand at USD260-270m for the full year (v/s USD240m in FY20), which is lower than expected due to lower prevailing interest rates.
In the HFC segment, loan book grew 23% YoY to INR23.7b. yields (on AUM) stand at 19.3% (+20bp QoQ) while spreads are at 9.7% In 1QFY21, SCUF raised ~INR5.5b from term loans (INR3.5b from SIDBI at 6.2% with the balance from banks at 9%) and ~INR5.1b from retail deposits. Since the IL&FS; crisis, the company has faced issues on the liability front, which has led to muted disbursements and loan book growth. In MSME financing, it was 70% Expect incremental credit cost of 90-100bp due to COVID-19. Some branches are open only for part of the In Gold loans, business has improved in urban areas compared to pre-COVID levels. Tightness in liquidity has also led to muted disbursements and loan book growth. While disbursements would pick up gradually, the high book churn will keep total AUM Asset quality has been improving over the past few quarters.
12 August 2020 Overall, Gujarat is expected to have an available capacity of 40mmtpa over the next 2-3 years, up 54% from now. HPCL-Shapoorji is expected to complete its 5mmtpa LNG terminal at Chhara in another 2-3 years. current ~1.5mmtpa) once the Anjar-Chotila pipeline capacity is augmented. The company currently has pipeline capacity of ~42mmscmd. executing partial stretches of Mehsana-Bhatinda (340km) and Mallavaram- Bhilwara (364km) pipelines. Both have capacity of 76-77mmscmd and would enable evacuation of gas from upcoming LNG terminals. GUJS is already transporting ~40-42mmscmd of gas. Even if the last mile pipeline connectivity of Chhara and Swan is executed by other companies, Gujarat State Petronet GUJS has moved to the lower tax rate. As a result, the regulator might cut its tariffs by 10-12% to maintain regulated RoCEs. Additionally, GUJS has two pipeline grids High Pressure (HP) and Low Pressure (LP) with their economic lifetime being defined as 2026 and 2025, respectively.
S/A revenue declined ~68% YoY to ~INR4.3b; however, EBITDA/PAT loss of ~INR74m/INR563m was reported. While tonnage declined 71% YoY, realizations grew 8% YoY (9% QoQ) to The Auto segments revenues declined 78% YoY, impacted by decline across segments, with 85%/86% and ~79%/53% declines in CV/PV (domestic and exports, respectively). The Non-Auto segments revenue declined ~51%, impacted by similar declines in both domestic and export revenues. EBITDA loss stood lower due to better fixed cost management. Higher other income and lower depreciation/interest restricted net loss. Revenue is expected to decline in 2Q on a YoY basis, but domestic revenue would be flat, with growth in Industrial, PV, Mining, and Tractor to cover for expected 67% decline in CV. Oil & Gas) would be flat in 2Q on a YoY basis. The Oil & Gas business would be lower; however, Brent sustaining above USD42/barrel could drive recovery in demand.
