Led by lower volume, Ramkrishna Forgings (RFL) has delivered a weak performance in 1QFY20 with its revenue declining by 8% YoY and 14% QoQ to Rs3.8bn (vs. our estimate of Rs3.9bn). Its volume declined by 14% YoY and 6% QoQ to 28,558 tonne owing to slower M&HCV; sales in the wake of higher axle load norm, production cut by OEMs and ongoing economic slowdown. While EBITDA dropped by 17% YoY and 19% QoQ to Rs722mn (slipping our estimate by 4%), EBIDTA margin contracted by 204bps YoY and 112bps QoQ to 19% owing to 100bps YoY (-235bps QoQ) rise in RM/sales to 49.8%, despite 25bps YoY reduction in other Expenditure/Sales to 24.8%. However, staff cost/sales increased by 130bps YoY and 75bps QoQ to 6.4% due to negative...
HG Infra Engineering (HGINFRA) has reported a better-than-expected performance in 1QFY20 despite a marginal misses on revenue front, which grew by 17% YoY to Rs5.26mn (vs. our estimate of Rs5.35bn). While EBITDA grew by ~19% YoY to Rs795mn, EBITDA margin stood at 15.1% (+21bps YoY and -96bps QoQ) vs. our assumption of 15%. Higher-than-estimated margin and lower finance cost led to better-than-estimated 27% YoY growth in PAT to Rs344mn (vs. our estimate of Rs312mn). Having secured orders worth Rs36.5bn in FY19 (EPC components), HGINFRA did not bag any order in 1QFY20 due to slowdown in ordering activities. Order backlog stands at Rs57.1bn (2.7x of TTM revenue) as of 1QFY20-end vs. Rs62.2bn in FY19. Further, gross borrowings...
Poor Performance on Soft Execution & Projects Disruption in AP NCC (NJCC) has reported a poor performance in 1QFY20, as projects cancellation, reassessment of projects and payment delays impacted its revenue booking. Resultantly, revenue declined by 7% YoY and 35% QoQ to Rs21.8bn. EBITDA broadly stood flat on YoY basis at Rs2.66bn, while EBITDA margin stood at strong 12.2% (+84bps YoY and +45bps QoQ) mainly led by settlement of claims with the clients during the quarter. Dismal revenue booking along with higher finance cost (+24% YoY and +8% QoQ) and lower other income (-15% YoY and -31% QoQ) led to steep 21% YoY decline in net profit to Rs813mn. A high exposure in AP and political shift in the state along with general slowdown led by...
Shree Cement (SRCM) has reported a stellar operating performance in 1QFY20 with EBITDA surging by a sharp 57% YoY to Rs9bn (vs. our estimate of Rs8.3bn) mainly led by higher-thanestimated recovery in average cement realisation. EBITDA/tonne came in at multi-year high of Rs1,443 as against Rs863 and Rs1,103 in 1QFY19 and 4QFY19, respectively. While average cement realisation recovered by strong 14.5% YoY and 11.3% QoQ to Rs4,703, cement operating cost/tonne stood at Rs3,260 (+0.5% YoY and +4.4% QoQ). On the flip side, sales volume (including clinker of 0.23mnT) was subdued, as it declined by 13% YoY and 17% QoQ to 6.06mn.T SRCM commenced commercial production at Seraikela (Jharkhand) GU on 26th Jun'19 having capacity of 2.5mnT, while 3mnT Cuttack SGU (capex of Rs4.25bn) is to be commissioned in...
Beating ours as well as consensus estimates, GAIL (India) has reported a strong performance in 1QFY20. Its EBITDA grew by 1% YoY and 34% QoQ to Rs22.6bn led by higher margin (US$0.39/ mmbtu vs. US$0.26 in 1QFY19) in gas trading and higher tariff realisation (US$0.62/mmbtu vs. US$0.56 in 1QFY19) in gas pipeline segment. Despite lower spot LNG prices and 2% QoQ fall in gas trading volume, gas trading segment's EBITDA jumped by 46% QoQ on the back of favourable gas trading mix (higher RLNG and lower domestic gas). Its reported net profit grew by 2% YoY and 15% QoQ to Rs12.9bn backed by higher other income (+26% YoY) and lower interest expense (-46% YoY). The Company expects to increase the utilisation level of its petrochemical...
Despite good performance in marketing segment, Bharat Petroleum Corporation (BPCL) has reported weak operating performance in 1QFY20 with EBITDA falling by 44% YoY and 55% QoQ to Rs21.8bn (in line with our estimate) led by lower refining throughput and margin. It reported a GRM of US$2.81/bbl in 1QFY20 vs. US$7.49/bbl in1QFY19. We believe 4% YoY fall in crude throughput was mainly due to Mumbai refinery upgradation for BS-VI fuel. Its net profit declined by 53% YoY and 66% QoQ to Rs10.7bn (11% above our estimate) mainly due to higher interest cost (+50% YoY and +28% QoQ). Notably, its debt increased by Rs15.5bn sequentially. Further, adoption of Ind AS-116 resulted into net Rs520mn decrease in PBT. In Jul'19, benchmark complex...
mmbtu), as it procured spot LNG in 1QFY20. Despite sequential increase in APM gas prices (from US$3.36 to US$3.69/mmbtu) the company's cost of gas reduced by 5% QoQ. Reported EBITDA grew by 31% YoY and 29% QoQ to Rs2.7bn (18%/26% above street and our estimates), while EBITDA realisation of Rs10.3/scm improved by Rs2.2/scm YoY. Other expenses declined by 13% QoQ impacted by Ind As-116. Reported net profit grew by 33% YoY and 28% QoQ to Rs1.7bn (above street and our estimates). MAHGL is reaping benefits of lower spot LNG prices, which is likely to continue at least in 2QFY20. In view of the recent correction in the stock price,...
J. Kumar Infraprojects (JKIL) has reported soft performance in 1QFY20 with revenue growing by 8% YoY to Rs6.7bn lower than our estimate of Rs7.4bn, mainly due to labour shortage in its key projects on the backdrop of general elections. EBITDA grew by 11% YoY (-17% QoQ) to Rs1.11bn vs. our estimate of Rs1.14bn, while EBITDA margin stood at 16.7% (+51bps YoY and +15bps QoQ). Net profit marginally grew by 2% YoY to Rs409mn below our estimate of Rs443mn. Order Book as on 30th June 2019 stood at Rs96bn (3.4x FY19 revenue). JKIL added a single project worth Rs15.4bn in Aug'19 and thereby taking total order backlog to Rs112bn as on date. Whilst the SEBI issue continues to be a overhang on the stock performance, it has neither impacted...
IITS Revenue Slightly Soft, IP-Led Biz Continues Upward Journey Sonata Software (SSOF) posted a soft performance in 1QFY20, with its USD revenue from IITS Business rising by 1.8% QoQ to US$44.3mn, missing our estimate by 2.1%. The entire revenue growth was led by full consolidation of the acquisition of Sopris Systems, while organic revenue growth remained flat in USD terms. In CC terms, total revenue rose by 2.7% QoQ, while organic CC growth was ~1% QoQ. Lower revenue in the Travel vertical (down 5.4% QoQ in USD terms) was the main driver for the softer-than-expected revenue. This was owing to growth not coming in as expected, with deal ramp-up slower-than-expected. Given that Travel is mainly...
Sustained market leadership in room AC segment and foray into other consumer durables segments continue to augur well for Voltas. At CMP, the stock trades at 30.6x of FY20E and 26.5x of FY21 earnings. Reducing our earnings estimate by 6%/3% for FY20E/FY21E, we reiterate our BUY recommendation on the stock with a revised Target Price of Rs663 (from Rs681...
