Capital allocation exercise gathered pace in 1HFY21 as MM continued its focus on exiting non core/loss making business. We reiterate BUY on M&M; (MM) led by 1) positive rural sentiments and stable tractor outlook providing margins and cash-flow cushion to compete in UV business, 2) renewed focus to gain back lost market share in UV business with new product launches, 3) dominating presence in LCVs to help ride CV upcycle and 4) increased focus on capital allocation with exit of non-core...
We reckon NBFCs conversion into banks would imply limited scope, stringent norms and lower returns. Unlike previous occasion, permit for industrial houses to opt for banking license and increased cap on promoter stake increase the scope of eligibility. While this would imply significant changes to the Banking Regulation Act, the details of which are awaited by most, licenses are not likely to come easy especially to the corporate houses. Conversion into a bank will be a call on trade-off between operational flexibility and a gradual liability franchise built which NBFCs have to take....
In a group call we hosted recently, management of VIP Industries highlighted 1) timeline of ~12-18 months for sales to revert to pre-COVID levels 2) plans to reduce cost by ~1.8bn in FY21E (~50% of the reduction is expected to be sustainable in nature) and 3) pressure on GM in FY21 (replica of 1HFY21) given higher discounts and reduction in share of Bangladesh operations. Amid indications of slightly back-ended recovery we cut our sales estimates by 5%/9%/6% for FY21/FY22/FY23 respectively. While we expect EBITDA loss to widen in FY21E to Rs844mn (Rs719mn earlier) and cut our FY22E EBITDA...
We reckon NBFCs conversion into banks would imply limited scope, stringent norms and lower returns. Unlike previous occasion, permit for industrial houses to opt for banking license and increased cap on promoter stake increase the scope of eligibility. While this would imply significant changes to the Banking Regulation Act, the details of which are awaited by most, licenses are not likely to come easy especially to the corporate houses. Conversion into a bank will be a call on trade-off between operational flexibility and a gradual liability franchise built which NBFCs have to take....
order book declined 17% YoY to Rs90bn. Management indicated the tendering pipeline remains healthy as the process of ordering continues during 1Q and expects an order inflow of ~Rs15bn for FY21E. Key project such as NRL, Kaveri Basin (few packages), HEML, petrochemical projects, etc. to be awarded in FY21E. HMEL petchem, MRPL expansion, Panipat...
MSS hosted a virtual investor meet (Link for PPT) outlining key strategies to Change in Estimates | Target | Reco achieve for their vision 2025 targets. These include 1) Consol revenues at USD36bn 2) 3CX10 (no country/component/customer contribute >10% in...
Cement Beats estimate on better realisations, lower costs Consumer Rural leads, urban demand recovery from 2H likely Consumer Durable Demand recovery beyond expectations IT Services Exponential uptick in technology transformation Infra Strong execution on Improving labour availability Life Insurance Growing in right areas...
Cement Beats estimate on better realisations, lower costs Consumer Rural leads, urban demand recovery from 2H likely Consumer Durable Demand recovery beyond expectations IT Services Exponential uptick in technology transformation Infra Strong execution on Improving labour availability Life Insurance Growing in right areas...
GoI's move to provide additional Rs 65000 crs of fertiliser subsidy is positive We maintain reduce rating (TP- Rs 676) on CRIN due to capacity constraints in NPK and likely headwinds on the raw material side starting 4Q...
Management expects revenue growth of 10-15% in FY21E with lumpy execution from IACCS, LRSAM, Akash and Homeland Security projects. Bharat Electronics (BEL) reported a strong quarter where revenue grew by 16% YoY leading to higher profitability. Execution of large value projects such as LRSAM and IACCS, Ventilator (Rs8-9bn) along with smart city & HLS orders led to higher topline. Order inflows declined 78% YoY at Rs16bn as base quarter had high value order of Akash Missile and some deferment of...
bold management initiatives as initial signs of trajectory reversal. Thierry Delaporte (new CEO) along with senior leadership team held a virtual analyst day to highlight Wipro's new strategy. The new CEO has outlined new strategic direction, 1) accelerate growth, 2) strengthen clients and partnerships, 3) lead with business solutions, 4) build quality talent at scale, and 4) simplify the operating model. Management has recognized that speed is the new cost, making strategy more client focused thus enabling agility in...
GoI's move to provide additional Rs 65000 crs of fertiliser subsidy is positive We maintain reduce rating (TP- Rs 676) on CRIN due to capacity constraints in NPK and likely headwinds on the raw material side starting 4Q...
Labour availability stands at 80% pre-covid levels (vs 60% pre-covid levels by Sep'20); Company expects to reach ~100% by Dec'20. Ahluwalia Contracts (ACIL) posted a strong quarterly performance with execution rising 4.1% YoY (vs PLe 23% decline) led by rise in labour...
months. However, that is largely led by equally weak base. We expect growth to taper off to 7% November onwards due to improved base. In spite of attractive on valuations (EV/EBITDA at 2.5x FY22e), stock would continue to...
IPM grew by 4% YoY in Aug-Oct after second consecutive growth month. Oct-20 data points indicate that IPM growth could be back at pre-COVID level as 1) IPM witnessed second consecutive month of strong growth, for the first...
IPM grew by 4% YoY in Aug-Oct after second consecutive growth month. Oct-20 data points indicate that IPM growth could be back at pre-COVID level as 1) IPM witnessed second consecutive month of strong growth, for the first...
EIM consol results exceeded our estimates as Revenue/EBITDA/PAT were higher by 4%/22%/10%. This was led by, 1) better margins at RE at 22% (PLe 18.7%, -260bp YoY) and VECV at 6.9% (PLe 5%, +150bp YoY). We expect ~50bp contraction in margins in 2H as higher RM cost will be partially diluted...
returned to normalcy (96.2% in Oct'20) and is likely to emerge stronger from and 49.8% YoY) 2) lower competition as several smaller players have gone out of business 3) closure of dine in focused 105 stores which will be replaced...
Shree cement (SRCM) reported Q2FY21 EBITDA above our/consensus estimates (CE) by 7%/20% at Rs9.9bn, up 17% YoY. The beat was largely led by better than expected realisations. SRCM has evolved as a mature player over last couple of years with discipline on both volumes and prices in its North markets (constitutes 2/3rd of its volumes). This is reflected in highest ever margins since FY09. However,...
respectively and upgrade to Buy (earlier Hold) given 1) resilient scale up of operations helped by charter demand 2) sustained increase in load factors on the back of easing lockdown restrictions and rising consumer confidence....
