Below?expected sales across US, Europe, emerging markets and PSAI segment caused a 16% miss in our revenue estimates. 8 Incremental expenses such as remediation spend, NDA launching expenses in the US, higher R&D (15% of sales), and lower sales from the US (better margin) led to a negative surprise in profit 8 DRRD guides for expiry of a supply contract (with ~50% profit margin) in the US starting Q1 – this would have an annual negative PAT impact of ~US$ 25mn 8 Considering visible delay in plant clearance by the USFDA, no major product launches in the near future, and weak profit outlook, we downgrade our rating from Buy to SELL with a lower TP of Rs 2,750 – 20x FY18 (earlier Rs 3,700).we downgrade our rating from Buy to SELL with lower TP of Rs 2,750 – 20x FY18 (earlier Rs 3,700).
Trendlyne has 24 reports on DRREDDY updated in the last year from 7 brokers with an average target of Rs 3339.2 . Brokers have a rating for DRREDDY with 1 downgrade,6 price downgrades,1 upgrade,2 price upgrades in past 6 months and 3 downgrades,8 price downgrades,2 upgrades,8 price upgrades in past 1 Year.
Revenue growth was in line with their expectations; affected by slowdown in rural markets and sluggish demand in urban markets .Flagship brand Bajaj Almond Drops saw volume growth of 1% vs. our expectation of 2%. NoMarks sales fell 16% as ongoing repositioning of the brand has not met with success.Margins continued to expand led by further fall in prices of key raw material – LLP PAT growth was in line with our expectations.Phillip Capital value Bajaj Corp at 23x FY18 EPS (22x earlier) at Rs 450 (Rs 440 earlier). While target multiple is at a substantial discount of 40% to the sector’s target multiple due to the Bajaj Corp's limited diversification, maintain Buy on upside potential and valuation comfort.
Trendlyne has 7 reports on BAJAJCORP updated in the last year from 4 brokers with an average target of Rs 463.3. Brokers have a rating for BAJAJCORP with 1 price downgrade,1 price upgrade in past 6 months and 2 price downgrades,2 price upgrades in past 1 Year.
Ambuja's operating results in Q2CY16 were largely in line with our estimates and beat consensus by 12% despite the miss on volumes (like its sister concern ACC). In our opinion, Ambuja has once again played the volume?cut strategy to benefit in terms of realisations (realisations up 7% qoq, beat all peers). Management interactions suggest that highest exposure to North India among all peers helped. 9 EBITDA/tonne at Rs 994 (+62% yoy; +40% qoq) is in line with the industry leader, UltraTech, whose blended EBITDA (inclusive of white cement) was at ~Rs 1,012.Cost excellence continues at Ambuja. Opex/tonne lower by 6% yoy; flat qoq. We see an upgrade potential here for Ambuja, given that the consolidation with ACC is likely to be through shortly.For the time being, Phillip Capital maintain estimates and target multiple of 15x EV/EBITDA for Ambuja. Factoring in consolidation with ACC, with a 10% holding discount,upgrade price target to Rs 300 (+11%; Rs 230 earlier).
Trendlyne has 19 reports on AMBUJACEM updated in the last year from 6 brokers with an average target of Rs 248.3. Brokers have a rating for AMBUJACEM with 2 price downgrades,2 downgrades,4 price upgrades,1 upgrade in past 6 months and 5 price downgrades,5 price upgrades,2 upgrades in past 1 Year.
Volume growth was a key disappointment. Negative volume growth in a scenario where peer growth was 6% is unjustifiable. Operating margin is 1.3% lower vs. our expectation, largely due to no volume growth (LafargeHolcim’s lack of focus in adding capacities has been the key reason).Operational efficiencies have sustained; realisation trend appears in line with peers. Near?term positive triggers are present – consolidation with Ambuja and commissioning of Jamul expansion – but we see all the positives largely factored in.Despite upgrading the target multiple to 14x CY17 EV/EBITDA (vs. 12x earlier), and even after considering the benefits of consolidation with Ambuja,see no upside.Phillip Capital maintain Sell with a revised price target of Rs 1,430 (Rs 1,230 earlier).The only potential trigger would be a recovery in cement prices.
Trendlyne has 17 reports on ACC updated in the last year from 7 brokers with an average target of Rs 158.7. Brokers have a rating for ACC with 1 downgrade,3 price downgrades,2 upgrades,6 price upgrades in past 6 months and 5 price downgrades in past 1 Year.
Key takeaways from Q1FY17 : IT services revenue up 4.3% qoq in USD – inline with consensus, but ahead of our estimates – driven by strong growth in IBM (IoT Watson deal).The remaining business, excluding IBM, declined -0.7% qoq. EBITDA margins, at 15.1%, declined 80bps qoq – due to visa cost (-100bps), provision for doubtful debt (-30bps) and IBM deal – inline with consensus, but better than our expectations. EBIT Margins declined by 190bps qoq – higher due to amortization of the assets acquired through acquisitions in the last quarter and marginally due to transition to IND-AS accounting.Phillip Capital have revised our FY17/18 estimates,on lower margin expectations continue to value the company at 14x FY18 P/E (unchanged). Their price target of Rs 610 (unchanged) offers 8% downside from current levels. Maintain Sell.
Trendlyne has 18 reports on PERSISTENT updated in the last year from 5 brokers with an average target of Rs 715. Brokers have a rating for PERSISTENT with 2 downgrades,4 price downgrades,1 price upgrade in past 6 months and 3 downgrades,5 price downgrades,1 upgrades,3 price upgrades in past 1 Year.
Key takeaways from Q1FY17 : 8 NII declined 5.7% yoy to Rs 6.8bn, below our expectation, as NIMs contracted 116bps yoy to 6.5% and AUM growth remain sluggish at 11%. 8 Disbursement growth remained moderate at 8% led by flat growth in Auto/ UV/ Cars, even as Tractors and commercial vehicle reported healthy growth of 15% and 40% respectively.Phillip Capital Maintain BUY with a PT of Rs 350 (unchanged). They value MMFS standalone at 2.4x March 2018 BV, implying a value of 323, MRHF at 14 per share, and MIBL at 13 per share.
Trendlyne has 13 reports on M&MFIN updated in the last year from 4 brokers with an average target of Rs 296.8. Brokers have a rating for M&MFIN with 2 upgrades,3 price upgrades in past 6 months and 1 downgrades,5 price downgrades in past 1 Year.
Margin fall was mainly on change in revenue mix towards the domestic business. Key highlights: Revenue remained flat, 10% lower than estimates as export declined by 41% yoy to Rs 433mn. Ethanol revenue grew marginally by 2.5%yoy to 1.2bn while emerging business reported growth of 16.5%yoy to Rs 531mn. Lower execution in brewery by 36%yoy to Rs 216mn.Order inflow up 73% yoy to Rs 2.8bn (ethanol 51%, brewery 18%, and emerging 31%), order book up 7.3% qoq to Rs 10.3bn.Praj usually has a seasonally weak 1H and report 80-85% profits in 2H;therefore, strong order inflow in 1Q is positive. Orders in emerging business accounted for 31% of total; we expect traction in these. Adjusted profit...
Usually, central government spending receives considerable attention while state spendingisgivenonlyacursoryglance,despitestatescontributing54%oftotalspend. Whatwefound:StatescontributemoretoIndia'seconomicgrowthundercooperative federalism. State + centre spending on rural + agri is sharply lower in FY17. Focus...
Vedanta has proposed a revised and final offer for the longimpeding merger of its subsidiary Cairn India with itself. It has sweetened its initial offer with three additional preferencesharesofRs10facevalue,whichmaybringinCairnIndia'sminorityshareholders tothedealandallayfearsoftheirdisapproval.Themergerwillultimatelyhelpimprovethe...
Q1FY17 was marked by a challenging operating environment due to continuing pressure on legal cigarettes industry volumes and sluggish demand conditions in FMCG Due to lack of clarity on new rules pertaining to health warnings on the packs, ITC's cigarette factories were shut from 1st April to 15th April 2016 and from 4th May to 8th May 2016 this impacted production Our channel checks suggest that in Maharashtra (~10% of sales volume), seizure of...
