Despite the adverse impact on off-take of its Specialty portfolio due to COVID, SUNPs market share remained intact and gradual recovery is expected over the near-to-medium term. Maintain SUNPs 1QFY21 sales were down 10% YoY to INR75.7b (v/s est. Accordingly, we have raised our price target to INR635 (from INR525 earlier) on We believe SUNPs RoE is at a trough and would improve with 19% earnings CAGR over FY20-22E, led by improving traction in the Specialty portfolio, enhanced MR efforts in DF, and better operating leverage. Considering that market share remains intact, SUNP is continuing its efforts to build more traction in its Specialty portfolio. We expect US sales to show moderate growth SUNP delivered 3% YoY growth in 1QFY21 despite challenging market conditions on account of COVID. We expect 9% sales CAGR over FY20-22E in this segment, led by increased traction in DF outperformance (v/s industry) coupled with recovery from COVID related disruptions and gradual improvement in the Specialty portfolio segment.
However, the COVID-19 pandemic and Auto sector slowdown impacted Technical Textiles and Refrigerant segments. Factoring in the estimate beat, we have increased FY21/FY22E earnings by 1QFY21 revenue declined 12% YoY to INR15.5b (v/s est. Significant impact in white goods and automobile revenue declined 3% YoY to INR6.8b with margin expansion of 11.8pp YoY to 32.6% (EBIT grew 52% YoY). Margin expansion was due to higher spreads, led by supply-demand mismatch and higher share of value- added products, resulting in higher value realizations across revenue plunged 63% YoY to INR1.4b due to significant slowdown in demand from tyre majors. SRF already has 95kMT capacity, which is Performance in 1QFY21 was impacted due to the COVID-19 pandemic and auto slowdown. While sluggishness in autos dented performance of the Technical Textiles business, the slowdown in white goods/auto impacted the Refrigerants However, strong margin expansion was witnessed in Packaging Film segment due to demand-supply mismatch and higher share of value-added products.
The bank further built COVID-19 provisions of INR18.4b, taking the total COVID related provisions to INR30b (15% on SMA accounts overdue on 29 NII grew 16% YoY (+17% QoQ) to INR266b with domestic NIMs improving by Other income grew 18% YoY, led by stake sale gains of INR15.4b in SBILIFE while opex growth moderated to 2% YoY (11% QoQ decline), and thus, C/I ratio improved to 50% (v/s 52.5% in 4QFY20). Total slippages declined to INR39.1b (0.7% annualized), facilitating a 13%/18% QoQ decline in GNPLs/NNPLs. PCR improved ~190bp QoQ to 67% Overall, 90.5% of term loans have paid two or more EMIs while the rest have paid less than two EMIs these include 4.2% in retail and SME, 3.3% in private corporates and the rest 2.0% are AAA or AA rated companies. Furthermore, moratorium availed in corporate accounts is much lower than expected while total COVID-19 provisions of INR30b and lower SMA book of INR17.5 (0.1% of loans) provides comfort.
1 August 2020 Laurus Labs (LAURUS) delivered all-time high quarterly PAT at INR1.7b. It is more than average of annual PAT over FY17-20. The company expects this to be sustainable on the back of diversified portfolio, increased customer base, addition of capacity for API/formulation and supported with better operating leverage. After a long wait, the efforts towards product development/building manufacturing base are reflected in the phenomenal financial performance. In fact, 1QFY21 redefines the earnings assessment over near to medium term. Our target PE remains unchanged and target price of INR1,215 at 17x 12M forward earnings factors just the earnings upgrade. Sustainability of growth momentum in FY22 can drive further re-rating. Reiterate Buy. LAURUS 1QFY21 revenues grew at a robust rate of 77% YoY to INR9.7b INR3.5b v/s INR1.1b YoY, Other API (14% of sales) revenue of INR1.3b v/s INR440m YoY, 37% YoY growth in CDMO (10% of sales), and 19% YoY growth in Anti-Viral API (35% of sales).
1 August 2020 JSW Energy (JSWE)s results reflected the impact of lower merchant sales volumes due to lower power demand and merchant prices. At a consolidated level, EBITDA was down 8% YoY to INR7.5b. Debt reduction continues, with net debt (incl. acceptances) declining ~INR1.6b during the quarter. Interest cost also decreased by 11% YoY. Furthermore, FCF generation would continue to be strong given ~80% of JSWEs capacity is under long-term PPAs. account of lower short-term sales. Short-term sales volumes declined 83% YoY to 123MU. Interest cost fell 11% YoY to INR2.5b given the debt reduction. Other income was up 58% YoY to INR0.8b, led by write-backs of INR0.3b.
31 July 2020 Essel Propack Essel Propack (ESEL) reported strong growth (13.6% constant currency growth) across geographies amid the COVID-19 crisis, primarily led by East Asia Pacific (EAP) and Europe. The ramp-up in operations led to an increase in operating leverage in EAP and Europe. Factoring a beat to our estimates for the quarter, we increase our earnings estimate for FY21/FY22E by 20%/12%, after considering a further ramp-up in operations and new launches across geographies, to arrive at TP of INR253. strong performance in EAP and Europe. EBITDA margins expanded by 250bp is attributable to a better product mix and operating leverage, including INR380m). AMESA revenue declined 3% YoY to INR2.2b. EBIT margins contracted by 190bp to 7.3% and EBIT decreased to INR160m (down 23% YoY). EAP revenue increased by 46% YoY to INR2b on a growing business pipeline in China and increased focus on regional players. The EBIT margin expanded 880bp to 21.7%, with EBIT at INR438m (up 2.
EBITDA margin expanded at higher rate of 590bp YoY with superior product mix and controlled opex. We remain positive on AJP on its new launches, rising share in key markets of the US/India/Asia/Africa and improved operating leverage. Re-iterate In the branded formulation segment, AJP witnessed 15% YoY decline in India, while it delivered 27.8%/17.4% YoY growth in Asia/Africa in 1QFY21. AJP has strong pipeline of registration in both Asia/Africa branded segment. We expect Africa branded segment to deliver better 12% CAGR over FY20-22E to INR4.3b owing to increased offerings and better reach. AJPs US sales grew 46% YoY due to increased traction in existing With 19 ANDAs pending approval, the company has an intention to file 10-12 ANDAs annually. Considering 6-7 launches in FY21, we expect AJP to garner 20% CAGR in US sales over FY20-22E to INR7.3b in this segment.
31 July 2020 Despite COVID-19-led industry-wide slowdown in Domestic Formulations (DF), Torrent Pharma (TRP) outperformed owing to its strong presence in the Chronic segment. The Germany business is expected to see revival 2HFY21 onwards. Growth in the US hinges on the Dahej/Indrad regulatory resolution. from COVID-19-led weakness in the India/Brazil business, b) the Germany business returning to normal, and c) reduced opex aiding better profitability. We value TRP at 24x 12M forward earnings and roll our TP to INR2,565. Maintain Neutral on limited upside from current levels. ROW sales grew 31% YoY to INR2.3b (11% of sales), driving overall growth in revenue. India sales grew 2% YoY (INR9.3b; 45% of sales). Brazil revenue (7% of sales) was down 20% YoY to INR1.4b. In constant currency, Brazil sales were steady on a YoY basis.
The EBITDA margin contracted considerably to 11% in the quarter (from 21% in FY20) due to lower revenue from Complex Hospital Generics and The deferment of surgeries in the Hospital segment impacted overall performance in PIELs Pharma segment. However, the phase-wise easing of the lockdown is improving the outlook across the CDMO and Complex The company will roll out retail lending products such as LAP and small business loans around the Diwali festival in 1520 towns. The Pharma business is witnessing increased traction, and the recent stake sale has set a benchmark for its valuation. INR34b of the INR37b Pharma stake sale to Carlyle would go back to PIEL. While PIELs Pharma business was impacted by COVID-19, management indicated U-shaped recovery over the next two to three quarters. We keep credit costs elevated over the next two years The Pharma business is witnessing increased traction.
Our higher multiple (Bharti India mobile valued at 12x EV/EBITDA) captures the digital revenue opportunity, expected gains from any potential tariff hikes, growing market share and possible rationalization of tax levies for the sector, which are not built into our Reliance Retails revenue declined 17% YoY to INR316b. to improve supply chain to handle home delivery and has already converted some Reliance market stores, partly Reliance Retail is leveraging the AJio platform to drive remained shut and 29% were operating partially. Also, China is likely to export more with an increase in its refinery throughput, deepening the supply glut and enhancing the pressure on product Counter measures by RIL includes focus on its deep petrochemical integration and to expand its fuel marketing business (currently, MS/HSD demand recovery in India is ~90% of Jan levels).
