1Q Action Replay: Revenue Below Estimate, Margin Exceeds Estimate KPIT Technologies (KPIT) has delivered a mixed performance in 2QFY19. While its USD revenue grew by 1.3% QoQ to US$152.5mn (1.4% below our estimate), EBITDA margin rose by a robust 147bps QoQ. In CC terms, revenue rose by 2.9% QoQ. While IES (-5.9% QoQ) and SAP (-2.6% QoQ) businesses again pressurised revenue, USD revenue from Product Engineering and Products & Platforms (P&P;) businesses grew by a healthy 5.1% QoQ and 33.7% QoQ, respectively. Notably, P&P; business is lumpy in nature. Beating our estimate by 222bps, EBITDA margin expanded by a robust 147bps QoQ to 13.6% despite wage hike impact of 220bps owing to INR depreciation...
ff The Bank expects its loan book to grow in 20% range over next few quarters and at the same time, it will continue to avoid concentration risk. Demand for personal vehicle loan book remained subdued during the quarter. ff The Bank allowed short term corporate loan book to rundown due to sharp volatility in...
From operating metric perspective, RIMS business clocked a solid 8.3% QoQ growth on top of two successive quarters of double-digit sequential growth. Consistently maintaining a healthy performance, this business recorded 10% USD revenue CQGR over the past 8 quarters, clocking excellent average annualised growth of >46% over the same period. Analytics also grew by a healthy 9.2% QoQ, while BPO grew by 4.5% QoQ. Geographically, while Europe out-performed...
Revenue Impresses; Better Outlook for Key Verticals Encouraging Wipro's 2QFY19 IT revenue came above our estimate with CC revenue growing by 2.8% QoQ (vs. our estimate 0.5% QoQ growth), while USD revenue rose 0.7% QoQ to US$2,041mn (1.2% ahead of our estimate). On the vertical front, BFSI (+3.1% USD terms, +4.4% CC terms), CBU (+2.7%/+4.8%), COMM (+1.9%/+4.2%) and ENU (+1.8%/+4%) drove revenue growth. Notably, all these verticals clocked 4% or more sequential growth in CC revenue, while Technology (-3.6%/+1.8%), HLS (-3.2%/-3%) and MFG (-0.4%/+1.7%) pressurised revenue growth. Issues continue to remain in Healthcare vertical due to HPS headwinds and uncertainty with regard to...
Sales volume grew by 9% YoY to 5.5mnT (at a base of 10% YoY growth in 3QCY17), led by sustained demand environment in its key markets. Revenue grew by ~11% YoY to Rs25.2bn led by robust volume growth. Notably, sales volume grew by 5.8% YoY to 18.1mnT in 9MCY18....
Geographically, Americas saw a healthy 4.4% QoQ growth in USD terms, while Europe (-0.9% QoQ) faced some growth headwinds. Regards other operating metrics, voluntary TTM attrition rate rose to 17.1% (16.3%), which is a key negative, in our view. While utilisation rose to 86.7% (vs. 85.5% in 1QFY19), net headcount rose by >3,750 (>11,600 gross addition) taking the total...
Asian Paints (APNT) has reported significantly lower-than-estimated performance in 2QFY19 led by disappointing realisation growth. APNT saw a significant increase in distemper and putty sales (low-realisation products) compared to the base quarter having higher contribution of emulsion paints. Though the Company hiked prices by 2.35% in Oct'18, it may not completely offset the spiraling input cost witnessed in Sept'18 led by INR depreciation and higher crude prices. Looking ahead, we believe APNT will continue to witness challenges on margin front, as fixed cost will continue to rise owing to commissioning of new plant, while price hikes are likely to be calibrated. We remain cautious on APNT on account of high valuation multiple of 42x FY20E...
TVS Motor (TVSL) has delivered a healthy performance in 2QFY19 primarily owing to strong volume performance led by better product-mix and higher export realisation. Reported EBIDTA margin was strong due to accounting adjustment (higher by 30bps), while adjusted EBIDTA margins were broadly in line with our estimates. While revenue and EBIDTA grew by 23% YoY (+20% QoQ) and 18% YoY (+33% QoQ) to Rs49.9bn and Rs4.3bn, respectively PAT declined by 1% YoY (+44% QoQ) to Rs2.11bn. Its EBIDTA margin contracted by 35bps YoY (+87bps QoQ) to 8.6%. Volume grew by 15% YoY and 17% QoQ to 10,88,335 units on higher YoY base, while average realisation grew by 7% YoY due to clubbing the interest income from customer contracts with...
Led by strong growth in fee-based income and loan book along with best-in-class NIMs (4.3%), HDFC Bank continued to deliver a healthy performance on business growth as well as operating front in 2QFY19. NII grew by 20.6% YoY and 8.8% QoQ to Rs117.6bn on higher loan growth and healthy margin. Further, the Bank's core fee income grew by 26.1% YoY and 3.9% QoQ to Rs33bn aided by strong growth in transaction banking fee, third party product distribution income and retail assets fee. Resultantly, its operating profit grew by 21.3% YoY and 9.6% QoQ to Rs94.8bn, while PAT grew by 20.6% YoY and 8.8% QoQ to Rs50.1bn. The Bank's loan book grew by 24.1% YoY and 6% QoQ to Rs7,508bn owing to strong sequential growth in Business Banking (+6.8%),...
Mindtree posted in-line revenue in 2QFY19, which stood at US$246.2mn (+2.4% QoQ in CC terms, 2% USD terms, below our estimate by 0.6%). From vertical perspective, Travel & Hospitality (+7.5% QoQ USD terms) was the out-performer, with Mindtree winning its largest-ever deal in this vertical. Hi-tech & Media (+3.1% QoQ) and BFSI (+2.3% QoQ) also grew ahead of company average. A negative was de-growth witnessed in MFG, CPG & Retail vertical (-3.8% QoQ) owing...
