12 August 2020 Ashoka Buildcons (ASBL) 1QFY21 results were robust. Top line decline was limited to INR5.7b (18% above est.). On account of one-off items as well as release of contingencies, EBITDA and PAT came in well above expectations. A key surprise was the reduction in gross debt to INR2.4b (v/s INR4b at end- FY20), indicating strong focus on cash flow management. Strong execution over the past two years is commendable. However, the pending PE exit in the asset portfolio is an overhang on the stock. We have increased our FY21E EPS by 16%, but FY22E EPS remains broadly unchanged. Strong order book and continuous improvement in the balance sheet augurs well for ASBL. Maintain with revised TP of INR88. Revenue declined 35% to INR5.7b and was 18% above our expectations. EBITDA was down 25% YoY to INR819m (ahead of est.
This was weighed by the COVID-19 impact on volumes (-21% YoY) and structural increase in fixed cost due to a >5x increase in land license fee (LLF) charged by the Railways for the use of its land. Revenue declined to INR11.9b (-27% YoY / -24% QoQ), v/s our estimate of INR12.1b, on weaker volumes and realization. EXIM volumes stood at 627,905 TEUs (-20% YoY / -19% QoQ) and domestic volumes were at 104,806 TEUs (-25% YoY / -37% QoQ). EXIM realization was weak at INR14,344/TEU (-11% YoY / -2% QoQ), while domestic realization stood at INR27,524/TEU (+5% YoY / +4% QoQ). Total expenditure, however, declined marginally to INR10.3b (-17% YoY, -6% QoQ) on higher LLF effective from 1QFY21. However, from 1QFY21, MoR changed the LLF charged to 6% of the value of the land and raised demand for INR7.76b for FY21 (>5x of INR1.
10 August 2020 Titans (TTAN) 1QFY21 results were broadly in line with estimates. Gold volumes declined by 81% during the quarter. However, decent recovery was seen in Jun20 with Tanishqs like-to-like growth declining 18% YoY. The recovery prospects in the jewelry segment (over 80% of sales) appear brighter with good demand in Jul20 (101% of sales in Jul19, albeit aided by weak base and significant activation in Jul20) and first week of Aug20 as well. However, recovery in watches/eyewear is tracking slower than jewelry. Another impact of ineffective hedges on margins in 2QFY21 as well is expected. However, we believe there is a possibility that recovery in the jewelry business may take place in 3QFY21, instead of 4QFY21 as guided by management. However, given the volatile demand and COVID environment, we prefer to be conservative and are assuming recovery in 4QFY21. Maintain with a TP of INR1,300 with 17% upside.
Shree Cement (SCRM)s 1QFY21 result was relatively weaker than large-cap peers (UTCEM, Ambuja) as EBITDA/t declined to INR1421/t v/s sharp While we keep our estimates largely unchanged, we see challenges related to near-term margins for SRCM. Depreciation expense declined 33% YoY to INR2.7b, driving the beat on PAT While SRCMs home market of northern India remains better placed (due to consolidated market structure and lower capacity additions), its increasing exposure to the eastern region is expected to result in blended margin decline. A strong balance sheet (~INR33b net cash at FY20-end) and limited capex provide comfort in the current uncertain demand environment on account We value SCRM at 16x FY22E EV/EBITDA and add the value of the UAE operations at USD70/t to arrive at TP of INR21,500. market of northern India continues to be better placed (owing to a consolidated market structure and lower capacity additions), its increasing exposure to the eastern region would likely result in decline in blended margin.
10 August 2020 CNG volumes were down 78% YoY to 0.48mmscmd. PNG domestic was higher by 7% YoY to 0.43mmscmd. PNG I/C was down 49% YoY to 0.20mmscmd. At the end of 1QFY21, the company had ~256 CNG stations (~184 belong to OMCs). Raigad had ~14 CNG stations, and the minimum work program (MWP) is fulfilled at Raigad. Opex increased ~44% YoY to INR5.8/scm (+15% QoQ). Thus, EBITDA was 5% higher than est. at INR0.8b (-71% YoY; -67% QoQ). Reported PAT stood at INR0.45b (-73% YoY, but +9% vs.
10 August 2020 Lemon Tree Hotels (LEMONTRE) cost saving initiatives have aided in achieving positive EBITDA (higher than est.). This is commendable in our view, especially at a time when hotel players have either reported or are likely to post EBITDA loss (for players yet to announce results). Although EBITDA was above our estimates, we have maintained our FY21/22E estimates as 1QFY21 is not expected to contribute materially to FY21 EBITDA. We have a rating on the stock with TP of INR33. 1QFY21 revenue was down 71% YoY to INR407m (v/s est. ARR declined 34% YoY to INR2,626, while occupancy decreased 48.7pp to 28.9%, leading to RevPAR drop of 76% YoY to INR759. EBITDA plunged 90% YoY to INR44m (v/s est. INR3m) while Adj. loss stood at INR419m (v/s loss of INR17m last year). On same hotel basis (excluding hotels, which were commissioned over the past 12 months i.e.
10 August 2020 Bank of Baroda (BOB) reported weak operating performance, with subdued margins and revenue growth; elevated provisions led to net loss of INR8.6b. On the asset quality front, slippages were trending lower, primarily on account of the asset classification benefit; however, NPL formation in the international portfolio stood elevated. The moratorium book declined to 21.4% and remains a key overhang on asset quality. Furthermore, CET-I declined to ~9.1%, which raises concerns regarding the banks capitalization levels and its ability to absorb further loss as we expect credit cost to remain elevated. We cut the EPS estimate for FY21/FY22 by 66%/31%, primarily as we factor higher credit cost and moderate our business growth/margin estimates. BOB reported a weak quarter with net loss of INR8.6b, affected by weak operating performance and elevated provisions. NII grew at 5% YoY (flat QoQ) to INR68.2b, with global NIMs declining by 8bp QoQ to 2.55%.
We value DIVI at 35x prospects for generic APIs, (b) its strong relationship with innovators, which is improving the scope of business in CRAMS (Contract Research And Manufacturing Services), and (c) capex support to meet the future requirements of customers. Accordingly, we arrive at TP of INR3,350 on a as we believe DIVI to be well-placed to benefit from renewed API as well as opportunity in CRAMS, supported by strong chemistry skill sets, manufacturing capacity/capabilities, and minimal The overall outlook for API manufacturers has improved on account of lower supplies from Chinese companies. We raise our EPS estimate by 16%/13% for FY21/FY22E to factor favorable demand for DIVIs APIs, margin enhancement owing to an increase in the in- house manufacturing of intermediates, and additional revenue from new capex. We expect a 33% earnings CAGR over FY2022E, led by increased business prospects from Custom Synthesis and Generics as well as ~600bp margin We value DIVI at 35x 12M forward earnings to arrive at TP of INR3,350.
lower yield and the impact of negative carry, (b) the GNPL ratio was stable at 3.6%, with PCR improving 500bp QoQ to 39%, (c) management expects 50% of GNPL to be recovered/resolved in FY21, (d) the share of retail loans has increased to 19% YoY from 15%, (e) the HFC loan book has been largely flat over the past few quarters at ~INR120b, and (f) NBFC disbursements in July 2020 were close to monthly run-rate levels. The past four to six quarters have been challenging for the company, with the run- down of the loan book and emergence of asset quality stress due to certain large- However, the key monitorable is how this portfolio behaves once it is free of moratorium in September. However, the company has responded by running down the wholesale lending book (especially structured finance, which is high-risk However, the key monitorable is how this portfolio behaves once it is free of moratorium in September.
While the structural investment case remains intact, the recent earnings track record, lower ROCEs (in the mid-20 levels) v/s consumer peers, and valuations of 54x FY22 do not leave much room for us to turn constructive from a one- Overall gross margins expanded 210bp YoY to 53.5%. Revenue from domestic subsidiaries declined 82.2% YoY to INR295m in 1QFY21; EBITDA stood at INR308m v/s INR176m in 1QFY20. The management expects this to continue in the near term, with the caveat that these low levels are unlikely to sustain as the demand Improvement in the demand scenario is likely to lead to positive topline and FY2022 is likely to be muted. While the structural investment case remains intact, the recent earnings track record, lower ROCEs (in the mid-20 levels) v/s consumer peers, and valuations of 54x FY22 do not leave much room for us to turn constructive from a one-year with TP of INR1,335 (50x Jun22 EPS).
