Reliance Securities Broker Research reports

ff It made additional contingency provisioning to the tune of Rs2.6bn towards exposure to IL&FS; Holdco (exposure at Rs20bn), taking the total provisioning on this account to 30%. Further, haircuts could be ~40-50% on this exposure and the Bank will make additional...

Whilst PMPL's EBITDA margin marginally declined by 25bps YoY to 12.8% owing to sales mix, it remains healthy due to higher contribution of international projects, high-margin Civil & Other Works and O&M; business. Looking ahead, the Management expects margin to improve owing to shift in revenue-mix to high-margin O&M; business and growth in non-power business. Its reported PAT grew by 67% YoY to Rs284mn. Total consolidated debt stood at Rs2.8bn as of 2QFY19-end vs. Rs 3.1bn as of 1QFY19-end with net debt/equity ratio coming in at 0.2x, which provides a significant headroom for growth. As the Management is confident of utilising internal...

NBCC reported a mixed performance in 2QFY19 with a better-than-expected growth in revenue booking and disappointing EBITDA margin. Beating our estimate, its reported revenue grew by 37% YoY to Rs15.4bn mainly led by 39% YoY increase in PMC revenue and 266% YoY rise in real estate revenue. PMC revenue accounted for 90% of its total revenue. A significant increase in other income (+207% YoY and +70% QoQ) resulted in 16% YoY growth in PAT to Rs859mn. NBCC stated that change in accounting rules to IndAS resulted in deferment of revenue booking especially for upfront fees under PMC contracts. Earlier, these incomes used to be reported in P&L;, which are shown under liabilities as advances received. These incomes would be booked...

Better Operating Performance on Lower Freight Cost JK Lakshmi Cement (JKLC) has reported a better-than-expected performance in 2QFY19 with its EBITDA coming in at Rs916mn (-4% YoY and -2% QoQ) vs. our estimate of Rs824mn led by unexpected decline in freight cost (-1% YoY and -18% QoQ) owing to ~30kms reduction in lead distance. EBITDA/tonne stood at Rs431 vs. Rs505 and Rs410 in 2QFY18 and 1QFY19, respectively. While operating cost/tonne stood at Rs3,572 (-0.9% YoY and -1.7% QoQ), input cost/tonne increased by 7% YoY and 2% QoQ to Rs1,944 mainly due to increase in Power & Fuel cost. Average NSR declined by 2.6% YoY and 0.9% QoQ at Rs4003/tonne, while sales volume grew...

Ahluwalia Contracts (AHLU) has reported a strong performance in 2QFY19 mainly led by rampup in execution in recently bagged projects. While revenue grew by a strong 31% YoY to Rs4.4bn (+9% QoQ) vs. our estimate of Rs3.8bn, EBITDA rose by 15% YoY to Rs574mn (+9% QoQ) and EBITDA margin stood at 13.1% vs. 14.9% and 13% in 2QFY18 and 1QFY19, respectively. Net profit grew by 21% YoY and 11% QoQ to Rs312mn vs. our estimate of Rs256mn. AHLU received order inflow of Rs31bn in FY19 YTD taking its total order backlog to Rs53bn (3.2x of FY18 revenue). Upgrading order inflow guidance to Rs40bn from Rs24bn, the Management has maintained revenue growth guidance of 15-20% with EBITDA margin of >13% for FY19 and >30% revenue growth in FY20E. We continue to maintain our positive stance on AHLU on the back of healthy...

CESC's net profit grew by 9.7% YoY to Rs2.7bn in 2QFY19 primarily owing to recognition of regulatory revenue of Rs370mn along with 7.3% YoY growth in unit sales to 2,964mn units. While its revenue grew by 6.3% YoY to Rs22bn, EBITDA grew marginally by 1.1% YoY to Rs5.5bn. Realisation remained flat at Rs7.5/kwh. Valuing CESC's power business on FCFE methodology, we maintain our BUY recommendation on the stock with a revised Target Price of Rs775...

Mangalam Cement (MGC) continued to deliver disappointing performance in 2QFY19 as well with adjusted EBITDA declining by 67% YoY to Rs92mn, while EBITDA/tonne coming in at mere Rs127. While sales volume remained robust at 0.72mnT (+20% YoY and +12% QoQ), steady NSR at Rs3929/tonne (+0.8% YoY and +1.3% QoQ) led to 21% YoY growth in revenue to Rs2.9bn broadly in-line with our estimates. Adjusted for prior period rebate in railway freight, operating cost/tonne surged by 9% YoY to Rs3,775 (-1.7% QoQ) mainly led by increase in Power & Fuel cost. Adjusted net loss stood at ~Rs14mn vs. Rs11mn profit in last year. Looking ahead, we expect higher PPC production, WHRS capacity and recent softening of fuel prices along with likely...

Led by sustained acceleration in project execution especially in Metro projects, JKIL's revenue grew by a stellar 62% YoY (-17% QoQ) to Rs5.1bn. Mumbai Metro Line-3, Metro Line-2&7 and JNPT contributed Rs1.85bn, Rs1bn and Rs0.75bn, respectively to its total quarterly revenue, while Rs400mn revenue was booked from Delhi Metro project. Further, JKIL looks forward to book Rs8bn from Metro Line-3, Rs3.5bn from JNPT and Rs3bn from Metro Line-2&7 in FY19E....

Glenmark Pharmaceuticals (GNP) has delivered a better-than-expected performance on all metrics in 2QFY19. Aided by growth in all geographies (except LatAm), its revenue/EBITDA/PAT exceeded our estimate by 4%/7%/12%, respectively. Its revenue grew by 14.4% YoY to Rs25.8bn led by healthy growth in US (+11.5%) to Rs8.1bn, India (+9.5%), RoW (+21.1%) and Europe business (+30.4%), while LatAm sales declined by 5.9% YoY. Gross margin contracted by 83bps YoY to 65.9% due to adverse product-mix, while EBITDA margin remained YoY flat at 17%. Its EBITDA and PAT grew by 13.3% YoY and 16.4% YoY to Rs4.4bn and Rs2.4bn, respectively. We maintain...

ff India Biz (27% of Sales): Weak sales (-16.3% YoY) in domestic business is attributable to one-time inventory reduction in supply chain and high YoY base, excluding which , SUNP could have reported a low single-digit decline. SUNP launched 13 new products in 2QFY19. ff R&D; Spend: SUNP's R&D; spend stood at 6.4% vs. 6.8% in 1QFY19). The Management expects R&D; spend to increase in 2HFY19E owing to specialty clinical development programme. SUNP is focussing on calibrating R&D; investments of generic portfolio (low value). ff SUNP provided Rs12.1bn towards Modafinil anti-trust litigation (Rs9.5bn in 1QFY18). As this is...