17 August 2020 United Breweries (UBBL)s results were worse than our expectations. Its in various urban centers thus far in 2QFY21, (c) no repeal of excise duty increase in the majority of the states (which saw a steep excise increase in May), and (d) the continued likelihood of closure of on-trade sales for a few more months. As highlighted in our Alcobev downgrade in May20, we expect FY20 FY22 to be lost years for alcobev players, which are severely affected by a weak demand environment in FY21. Moreover, recovery in FY22 is also threatening both net sales growth and profitability for the next few quarters and (b) the risk of weak state finances leading to delay in payments, thereby increasing receivables. EBITDA loss stood at INR957m (v/s est. INR750m loss and EBITDA profit of INR3.3b in 1QFY20). PBT loss stood at INR1.5b (in-line) v/s PBT profit of INR2.6b in 1QFY20.
Maintain NTPC's reported S/A PAT (including the impact of a rebate) was down 5% YoY to INR24.7b (v/s our est. PLF of coal-based plants fell to 58.2%, v/s 73.9% in the previous year, weighed by lower power demand. Interest cost at S/A was also impacted by INR2.1b on account of the The co.s numbers also included an INR2.2b CSR contribution in the current quarter related to COVID-19 care packages NTPC plans to reach ~130GW capacity by 2032. NTPC expects its capitalization run-rate to be at 56GW p.a. for the next three to four years. The balance is to be paid only when DISCOMs withdraw their NTPC has discussed the possibility of a buyback in its previous board meetings Outstanding overdues have reduced to INR145b (currently) from INR164b at June-end. This provides strong With the pickup in capitalization, which was partly hampered due to coal availability issues, we expect a regulated equity CAGR of ~11% over FY2023.
IIFLWAMs 1QFY21 PAT grew 33% YoY to INR819m (63% beat), driven by Operating expenses were down 20% QoQ (up 2% YoY) to INR1.3b (7% beat), driven largely by lower employee cost. Our earnings estimates remain largely unchanged for L&T; Wealth (AUM of INR99b) and strong MTM gain of INR150b, net AUM Annual Recurring Revenue (ARR) assets grew 17% QoQ to INR732b around half of this increase came from the L&T; Wealth acquisition. Lower ARR revenue is on account of (a) lower AMC fees (of which, 60-70% will come back in 2QFY21), (b) NII on loans (due to INR2.3b lower capital translating to INR60m impact), and (c) lower average AUM in distribution and IIFL assets. The push in the asset management business will be one of its key With IIFL-ONE, the company is looking to revolutionize the way wealth management is offered in India.
17 August 2020 Despite reduced sales in India (DF)/the US/ROW/LATAM, Glenmark Pharma (GNP) delivered better-than-expected 1QFY21 performance led by product mix change and sharp reduction in other opex. We have raised our EPS estimate by 19%/14% for FY21/FY22E and raised our P/E multiple to 14x (from 12x earlier) to factor in (a) cost rationalization benefits, and (b) the gradually improving outlook for India and other emerging markets (EMs). Accordingly, we have arrived at a price target of INR495 on 12M forward earnings basis. While 17% earnings CAGR over FY20-22E should be better than the earnings decline over FY17-20, we are yet to see meaningful improvement in return ratios. Revenues grew 2.7% YoY to INR23.4b (v/s est. The YoY growth was driven by Europe and DF, partially offset by decline in RoW markets and LATAM sales. DF (34% of sales) revenue grew 3.7% YoY to INR7.8b. Europe revenue (12% of sales) grew ~13% YoY to INR2.
This led to an increase in export share in total sales volume of 5.5% in FY20 (v/s 2.4% in FY19), mainly driven by the launch of 650cc Twins. It reflects the companys confidence in its new REs new mix of semi- synthetic oil helped it to extend the service and oil- change intervals for its Unit Construction Engine (UCE) based models It has brought down the in-use ownership cost of the motorcycles by The Make Your Own (MYO) program was launched in FY20 to enhance the customers purchase experience. The new vehicles are indigenously developed with two new engines (2L and 3L Operations for VECVs started operations at its new plant at Bagroda, near Bhopal, for the assembly of new engines for the Pro 2000 series with delivery expected in VE Powertrain (VEPT) engines sales declined 28.7% to 28,383 units. CFO from operations declined 30% to ~INR6b due to EBIT loss of ~INR83m (v/s ~INR5.98b profit), partially offset by lower tax and reduction in overall working capital.
15 August 2020 The Ramco Cements (TRCL) 1QFY21 results highlight the companys continued market share gains. Volumes declined only 28% YoY for TRCL (v/s 53% YoY decline for regional peer India Cements). Cement EBITDA/t also improved to INR1,283 (+34% QoQ), led by higher prices in the South. We maintain our FY21/FY22E EPS estimates and retain valuation at 13.0x FY22E EV/EBITDA prices in the benefit of the expansion- led market share gains. Commissioning timelines of ongoing expansions have also been pushed ahead by 2-3 months due to COVID-19 disruption. Revenue/EBITDA/PAT was down 24%/ 25%/ 43% YoY to INR10.4b/INR2.6b/INR1.1b, but was 8% above est. for all three numbers due to better than expected volumes. Sales volumes declined 28% YoY to 1.94mt (v/s est. 1.76mt), better than industry that declined by ~50% YoY in South India.
15 August 2020 Tata Steels (TATA) 1QFY21 consolidated EBITDA at INR5b (-91% YoY) was the weakest in the past 10 years. The COVID-19 crisis led to a sharp decline in both volumes and margins across all entities. Margin outlook in Indian operations, however, is much better with prices bouncing back to near pre-COVID levels. Europe, though, should remain a drag with EBITDA losses expected to continue in the near term. We have raised FY21/FY22E EBITDA estimates by 16%/7% to factor in the improved outlook in Indian operations. However, leverage remains unfavorable at 6.8x FY21 EBITDA. reported EBITDA plunged 89% QoQ (-91% YoY) to INR5.1b (v/s est. INR10.3b) in 1QFY21, led by significantly lower profitability in Tata Steels India operations and losses in Europe. Adjusted EBITDA (eliminating impact of forex movement on investments) was also weak at INR10.4b (-81% YoY).
15 August 2020 Sun TV Network (SUNTV)s revenue fell by 45% YoY, weighed by a plunge in ad revenues and the absence of an IPL season, but partly cushioned by subscription revenue growth. EBITDA fell 39%, partly offset by no fresh content production cost and SG&A; cost rationalization. We revise our FY21/FY22E EBITDA by 9%/8% as we factor IPL earnings in FY21E, better subscription revenues, and the benefit of sharp cost rationalization. SUNTVs 1QFY21 revenues declined by 45% YoY to INR6b (in-line), largely due to the postponement of the IPL season, through which the company had generated INR2.4b in 1QFY20. EBITDA thus declined 39% YoY to INR4.2b (38% above our estimate), supported by a reduction in operating cost, and EBITDA margins expanded 670bp YoY to 68.7%. Net profit thus fell by 25% YoY to INR2.8b (51% beat); PAT margins were at 47%, supported by other income and lower opex.
15 August 2020 Shoppers Stops (SHOP) 1QFY21 revenues tanked 93.5% YoY (40% miss) due to store closures. However, better-than-expected cost control measures with 45% reduction in operating expense restricted EBITDA loss to INR1b (v/s est. INR1.1b and INR1.4b profit in 1QFY20). Despite outstanding cost rationalization, we have cut FY21 EBITDA by 37%, due to 10% revenue cut given the prolonged recovery expectation and lower gross margin. We have cut FY22E EBITDA marginally by 4%, led by revenue cut. Revenues plunged 93.5% YoY to INR539m (40% miss). Gross margin dropped 970bp to 32.1%. The revenue decline was due to complete store closures in Apr-May20 and partly in Jun20. Owing to the lockdown-led restrictions, SHOPs stores operated at 17.6% capacity in 1QFY21.
15 August 2020 Kaveri Seeds (KSCL) 1QFY21 revenue increased on account of growth in hybrid rice, selection rice and vegetable seed segments. Cotton seed volumes grew 5% despite challenges faced by the industry as illegal cotton seeds were sold in the market. EBITDA growth was higher than revenue growth due to (a) non-payment of royalty fees (of INR140m), and (b) savings on travel costs. This was partially offset by contraction in gross margin. Revenue and EBITDA were in line. Factoring in the same, we have increased our PAT estimates by 15% for FY21 and maintained FY22E estimates. Maintain KSCLs 1QFY21 revenue (standalone) was up 14% YoY to INR7,485m (v/s est. EBITDA was up 20% YoY to INR2,793m (v/s est. EBITDA margin expanded 170bp YoY to 37.3%, mainly due to savings on royalty payment. However, it was partially offset by lower gross margin, which contracted 220bp YoY to 44.
