Escorts (ESC) has delivered a healthy performance across parameters in 2QFY19 with betterthan-expected operating margin across business segments despite a challenging business environment. Its revenue, EBIDTA and adjusted PAT grew by 15%, 12% and 25% YoY, while sequentially declining by 8%, 15% and 14% (due to seasonality) to Rs13.98bn, Rs1.58bn and Rs1.03bn vs. our estimate of Rs13.1bn, Rs1.44bn and Rs0.96bn, respectively. Its EBIDTA margin fell by 37bps YoY and 101bps QoQ to 11.3% (vs. our estimate of 11%). While tractor volume grew by just 3.3% YoY, volume of construction equipment and revenue from railway segment rose by a strong 37% YoY and 45% YoY, respectively. Its RM/sales increased by 81bps YoY (-12bps QoQ) to 67.5%, while other expenses/sales rose by 102bps YoY and 106bps QoQ to 13.2%. Its...
Sagar Cements (SGC) has reported disappointing performance in 2QFY19,with higher-thanexpected decline in average NSR and higher power and fuel cost dragging its operational performance. Consolidated EBITDA declined by 45% YoY and 42% QoQ to Rs211mn vs. our estimate of Rs404mn and street estimate of ~Rs392mn. EBITDA/tonne stood at mere Rs294 compared to Rs642 and Rs492 in 2QFY18 and 1QFY19, respectively. Sales volume stood at 0.72mnT (+19.8% YoY and -3.3% QoQ). Prolonged shutdown of BMM unit (for 52 days) along with shutdown of 25 CPP led to higher operating cost in terms of higher power and freight cost (despite benefit from Bayyavaram unit) and other fixed cost. A sharp decline in operating profit and 29% YoY (+26% QoQ) surge in depreciation led to PBT loss of Rs106mn. We believe...
Strong Growth Continues; Performance In-line; Maintain BUY ABB India (ABB) has delivered a robust performance in 3QCY18 (in-line both on top-line and bottom-line front), with its revenue rising by 30.7% YoY to Rs25.1bn led by strong growth by all business verticals i.e. Power Grids (+71.3% YoY), Robotics & Motion (+32.7% YoY), Electrification (+21.1% YoY) and Industrial Automation (+18.7% YoY). Its EBITDA margin rose by 70bps YoY to 7.7%, while reported PAT surged by 29.9% YoY to Rs1.08bn led by cost saving measures, differentiated portfolio-mix, digital value addition and higher sales. We maintain our BUY...
ITC has reported largely an in-line performance in Q2FY19 with an estimated cigarettes volume of ~7% YoY. Despite a robust YoY growth in cigarettes volume, cigarettes revenue declined by 2% QoQ. Further, EBIT growth at 9% YoY is slightly disappointing. Total EBIDTA growth stood at healthy 12% YoY helped by 77% growth in FMCG others segment. PAT grew by 12% YoY, in line with our estimate. At CMP, the stock trades at 25x FY20E earnings, which is reasonable considering the...
ff The Management maintained, that the worst of loan rating downgrade cycle by the Bank is over, which may further normalise in coming quarters. However, the Management expects provisioning to remain elevated in coming quarters due to ageing of existing NPAs along...
CG Consumer Electricals (CGCEL) has delivered an in-line performance in 2QFY19 aided by strong growth in Electrical Consumer Division (+14.6% YoY) offset by poor performance in lighting segment (- 3.8% YoY). In line with our estimate, while its total income grew by 8.7% YoY, while net profit grew by 8.6% YoY. Expected double-digit growth in light electrical industry continues to augur well for CGCEL, in our view. Valuing at 35x P/E to its FY20E EPS, we maintain our BUY...
Subdued Performance; Healthy Exports to Drive Bottom-line Bajaj Auto (BAL) has delivered a subdued operating performance in 2QFY19 with its EBIDTA margin contracting by 292bps YoY and 46bps QoQ to 16.8%. Aided by 24% YoY and 9% QoQ growth in volume to 1.33mn units, its revenue grew by 21% YoY and 7.8% QoQ to Rs78.3bn vs. our estimate of Rs81bn. ASP declined by 2.2% YoY (-1.4% QoQ) led by poor product-mix and price rationalisation. EBIDTA growth came in lower at 3.4% YoY and 5% QoQ due to lower realisation, while PAT increased by 4% YoY and 3% QoQ to Rs11.5bn (vs. our estimate of Rs11.8bn). Higher commodity prices and limited ability to pass on the same led to 327bps YoY and 98bps QoQ...
ff We are positive on Voltas owing to its market leadership position with 22.1% market share in domestic room AC market led by strong growth in Tier-II and Tier-III cities. While the EMPS segment is expected to clock 11% CAGR, the UCP and EPS...
ff However, SMA2 exposure stood at 0.15% of loan book, which clearly indicates that fresh slippages run rate to moderate in 2HFY19. Its exposure towards HFCs stood at 3.2% loan book along with another 2.6% towards other NBFCs, which seem to be similar with the...
Led by cost optimization measures and improved utilisation, Kajaria Ceramics (KJC) has reported a decent operating performance in 2QFY19, beating our estimates albeit marginally. Reported EBITDA stood at Rs1.08bn (-11% YoY and +13% QoQ) vs. our estimate of Rs1.02bn, while EBITDA margin came in at 15% (-316bps YoY and +28bps QoQ). Average realisation improved by 1.3% QoQ to Rs349/sm, broadly in-line with our estimate. Operating cost/sm stood at Rs315/sm (+1.6% YoY and +0.9% QoQ). Revenue grew by 8% YoY and 10% QoQ to Rs7.25bn mainly led by 10.5% YoY growth in volume to 19.54msm. Whilst the Management expected JVs business to revive in current fiscal, persistent loss from the JVs does not bode well for KJC, in our view. Strong...
