NCC Ltd. (NJCC) reported a stellar performance in 2QFY19 as well with its revenue and adjusted PAT growing by 138% YoY and 167% YoY, respectively mainly underpinned by better execution and higher-than-expected operating margin. Its reported revenue stood at Rs31bn (+32% QoQ). While EBITDA grew by 194% YoY to Rs3.65bn, EBITDA margin rose by 220bps YoY and 41bps QoQ to 11.8%. The Company secured orders worth Rs83.6bn during the 1HFY19 taking its total order book to Rs330bn (4.4x of FY18 revenue). While finance cost increased by 22% YoY to Rs1bn led by ~Rs3.6bn increase in gross debt during 1HFY19 and higher interest on mobilisation advances. APAT grew by 164% YoY to Rs1.57bn mainly led by strong operating...
Poor Performance Continues; Recovery Likely in Next Quarter Skipper continued to deliver a very poor performance in 2QFY19 as well, with its PAT declining by 89% YoY to Rs25mn. Its revenue grew by 1.6% YoY to Rs5.2bn led by 16% de-growth in Polymer division and lower execution in Engineering Products business. Looking ahead, we continue to believe that a sizeable order book, huge imminent opportunity and diversification into PVC business firmly place Skipper on a higher growth trajectory. Further, the stock is available at attractive valuation following a sharp correction during last 6 months. We maintain our BUY recommendation on the stock with a revised Target Price of Rs147 (from Rs214 earlier)....
Shree Cement (SRCM) has reported a healthy operating performance in 2QFY19 mainly on account of healthy realisation, stronger volume and improved performance of power division. Its EBITDA adjusted for Rs840mn MTM loss and Rs304mn freight rebate stood at Rs5.73bn exceeding our estimate of Rs4.83bn. Cement EBITDA/tonne came at Rs946 vs. Rs1,133 and Rs863 in 2QFY18 and 1QFY19, respectively. Cement operating cost/tonne stood at Rs3,268 vs. Rs3,037 and Rs3,244 in 2QFY18 and 1QFY19, respectively mainly due to higher fuel prices. Sales volume including clinker of 0.21mnT stood at 5.64mnT (+16% YoY and -19% QoQ). Average realisation grew unexpectedly by 3.9% QoQ to Rs4,268/tonne. SRCM has also provided Rs1.78bn total...
Injectable Portfolio & New Launches to Drive US Biz; Maintain BUY Aurobindo Pharma (ARBP) has delivered a better-than-expected performance on all metrics in 2QFY19. Aided by strong sequential growth in the US, ARV and RoW business (barring Europe), its revenue/EBITDA/PAT exceeded our estimate by 3%/8%/15%, respectively. Its revenue grew by 11.8% QoQ to Rs47.5bn led by healthy US business (+17.8% to US$318mn), ARV (+57%), RoW (+20%) and API business (+9%), while Europe sales declined by 3.6%. Despite recovery in high margin injectable biz and sales from NBO, gross margin contracted by 314bps YoY (+188bps QoQ) due to change in business-mix (higher growth in ARV and RoW business)....
Reported EBITDA grew by 378% YoY to Rs39.1bn, while EBIDTA margin improved by 1,312bps YoY to 17.6% led by 2.2% YoY decline in employee expenses to Rs89.5bn vs. Rs91.5bn in 2QFY18. Notably, employee cost peaked to Rs426.3bn in FY18, as CIL provided for increase in gratuity limit from Rs1mn to Rs2mn and wage hike for executives and non-executives. We expect CIL's employee cost to normalise at Rs360-370bn in FY19E. Other operating income increased to Rs20.1bn (vs.Rs10.2bn in 2QFY18) owing introduction of evacuation charges facility of Rs50/tonne on all coal dispatches (except rapid loading system) in Dec'17. Its consolidated reported PAT...
At a broader level, eClerx continues to face revenue growth headwinds owing to issues such as project roll offs. This is being witnessed in legacy projects (>5 year old projects), where roll offs in the near-term will continue to pressurise offshore revenue, which will be offset by robust onshore revenue growth led by managed services, analytics and RPA. Outlook remains healthy in these areas, with client demand strong and focus on cost cutting. However, from a margin perspective, new business in these areas comes at lower margins initially, and higher share of this business along with higher onshore revenue is likely to pressurise the margin profile in the short-term, till such time as offshore revenue sees a revival. INR depreciation is the biggest...
Kalpataru Power Transmission (KPTL) has delivered a strong performance in 2QFY19 led by better-than-expected execution in Railway, Oil & Gas Pipeline and T&D; business. We continue to believe that KPTL is well-placed to benefit from continued spending in T&D;, railway and pipeline segments. Considering the strong visibility on revenue and order flow front, sustained earnings momentum and likely improvement in return ratios in next 2 years, we maintain our...
ff US Biz (32% of Sales): The Management expects the US sales to report strong growth in 2HFY19E led by new launches (gLevothyroxine & gRanexa), pick-up in gTamiflu/ Cephalosporin sales led by upcoming flu season and ramp-up in Solosec sales. With lower sales in 1HFY19, LPC expects its US sales at lower end of earlier guidance of US$800-850mn in FY19E. On positive note, the Management indicated that pricing pressure has been moderated in the US due to exit of MNCs in unviable products. Notably, gLevothyroxine launch is postponed to 4QFY19 vs. earlier guidance of 3QFY19. ff Women's care brand i.e. Solosec contributed US$3mn to sales, LPC aims to achieve 15-20%...
Ajanta Pharma (AJP) has delivered a better-than-expected performance on all operational metrics in 2QFY19 led by strong sales growth in Asia/US as well as lower-than-expected decline in Africa sales. Domestic business reported flat growth due to high YoY base led by channel re-filling post GST roll-out. Despite marginal sales growth, AJP's EBITDA de-grew by 9.5% YoY to Rs1.7bn on account of higher staff and other operating expenditure, owing to which EBITDA margin contracted by 345bps YoY to 30.5%. However, AJP's gross margin expanded by 255bps YoY to 82.4% due to better product-mix. Led by higher taxes, PAT de-grew by 4.9% YoY to Rs1.3bn. The Company is expected to file 10-12 ANDAs with the USFDA in FY19E. LPC maintained...
Merger Overhang Remains A Key Concern; Maintain HOLD Bank of Baroda (BoB) has delivered a strong performance on asset quality front in 2QFY19, marked low fresh slippage of Rs22.8bn for seventh successive quarter. It's PCR including technically written-off accounts sequentially improved to 70.75%, which excluding technically written-off accounts stood at 61.79% in 2QFY19 vs. 69.11% and 59.94% in 1QFY19. The Bank's NII grew by 20.8% in 2QFY19 led by strong growth in loan book and relatively stable NIMs of 2.61%. Further, its core fee-based income remained strong ((+14.3% YoY and +12.3% QoQ) at Rs9.6bn. Domestic credit grew by 20.4% led by retail loans, which grew by 33.6% YoY. Within retail loans,...
