Emami Limited's (Emami's) Q4FY2020 performance was below our as well as street expectation with revenue and PAT declining by ~17% and ~25%, respectively, during the quarter. Lockdown at the end of the quarter affected pre-season sales of the summer portfolio, resulting in a sharp decline of 19% in domestic revenue (international business decreased by just 4%). Post acquiring required approvals, the company started manufacturing essential products from April 10, 2020, and gradually scaled up its operations to 100% in some of its plants. Trade and supply chain have normalised in few...
Oil India Limited's Q4FY2020 adjusting PAT stood at Rs. 502 crore (down 38.6% y-o-y), which was above our estimate of Rs. 462 crore. The beat was on the account of higher-than-expected other income at Rs. 673 crore (which excludes one-time interest income of Rs. 321 crore on tax refund) and lowerthan-expected DD&A; expenses (down 40.4% y-o-y) partially by weak gas sales volume (down 14.4% y-o-y; down 11.2% q-o-q) and higher operating cost excluding provision (up 44% y-o-y). Oil sales volume at 0.75mmt (down 3.7% y-o-y; up 3% q-o-q) was in-line with our estimates and net oil realisation at $52.2/bbl (down 15.5% y-o-y; down 17.5% q-o-q) was marginally ahead of...
Loss at Dhariwal Infrastructure reduced to Rs. 10 crore in FY2020 as compared to Rs. 93 crore in FY2019. Loss at distribution franchisee shrunk to Rs. 38 crore in FY2020 as compared to Rs. 60 crore in FY2019....
Initiating coverage on Coromandel International with a Buy rating, valuing it at 20x FY2022 EPS with a PT of Rs. 1,000 Company among India's top integrated agri solutions provider; significant backward integration drives margins, cashflows and return ratios...
Petronet LNG's (PLNG) Q4FY2020 adjusted operating profit of Rs. 907 crore (up 44.5% y-o-y; down 8.2% q-o-q) was lower than our estimate of Rs. 952 crore due to lower margin on spot volumes. We have adjusted operating profit for forex loss of Rs. 178 crore and inventory loss of Rs. 31 crore in Q4FY2020. Dahej re-gas volume at 206 tBtu (up 4% y-o-y; down 7.2% q-o-q) was largely in-line with our estimate of 204 tBtu. Kochi terminal's volume stood at 13 tBtu (up 18.2% q-o-q), leading to higher utilisation rate of 20.4% in Q4FY2020 versus 17.3% in Q3FY2020. Adjusted PAT at Rs. 559...
ITC's Q4FY2020 performance was affected by lockdown with revenues declining by 6.4% and adjusted PAT stood flat. Cigarette business revenue declined by ~6.5%, largely due to a 10-11% dip in cigarette sales volumes. The sales volumes stood almost flat in January-February. Non-cigarette FMCG business declined by ~3% (comparable revenue growth excluding stationary business and hived-off the retail business stood at 5%). Revenue and PAT grew by 2.2% and 23% (aided cut in the corporate tax rate) in FY2020. Manufacturing of essentials such as personal wash, hygiene...
APL leads domestic decorative paints industry with a 55% market share; decorative paints fetch over 85% of APL's overall revenue unlike peers that have meaningful contribution from automotive/industrial paints. A rising middle-income class; rapid urbanisation, shift to organised from...
Century Plyboards (Century) reported a 10% y-o-y decline in standalone revenue for Q4FY2020 as the quarter was affected by COVID-19 related lockdown during last two weeks of March 2020 (which is considered the peak sales period as dealers stock up to avail annual turnover discounts). Consequently, plywood and laminate divisions registered 13.5%+ y-o-y decline in revenues. The company expects overall Rs. 90 crore loss of revenue due to lockdown. The OPM expanded by 333 bps y-o-y led by improved margins in laminate and MDF verticals. However, OPM was lower by 192 bps q-o-q which came in lower than our estimate.Further, lower interest...
Margins improved, with global NIM during Q4FY2020 at 2.67% from 2.62% in Q4FY2019 and domestic NIM increasing to 2.78% from 2.68%. Fresh slippage for the quarter was at Rs. 3,050 crore, lower sequentially,...
For Q4FY2020, The Ramco Cements (Ramco) reported in-line standalone net revenue of Rs. 1,390 crore, down 9.3% y-o-y, on account of a decline in cement volume (down 11% y-o-y) led by COVID-19 led nationwide lockdown in last ten days of March 2020. Blended realisation rose by 1.6% y-o-y (up 5.1% q-o-q) on account of cement price hikes undertaken in the Southern region. Ramco posted positive surprise on EBITDA/tone at Rs. 909 versus our expectation of Rs. 786. The EBITDA/tone was down 5.3% y-o-y owing to higher ad/promotional expense (other expense/tonne up 26.8% y-o-y) at lower capacity utilisation....
Thermax's consolidated net revenue reported a sharp decline of 36.2% y-o-y in revenue for Q4FY2020 (lower than our estimates) at Rs. 1,323 crore due to impact of lockdown (loss of revenue of Rs. 400 crore-500 crore), wherein the decline in revenue was seen across segments. Operating profit margin (OPM) declined by 343 bps y-o-y, led by lower absorption of fixed costs on lower revenue. Hence, operating profit fell sharply by 63% y-o-y to Rs. 64 crore. Further, lower other income (-41% y-o-y to Rs. 30.7 crore) and higher depreciation (+25% y-o-y to Rs. 30.8 crore) impacted PBT (-70% y-o-y) and adjusted PAT declined by 70% y-o-y...
The Q4FY20 results of Cadila Healthcare Limited (Cadila) were a mixed bag and reflected the impact of Covid-19. The sales at Rs 3752 cr were flat on a y-o-y basis, but missed estimates. Revenues amounting to Rs 250 cr were deferred due to supply chain / logistics issues, which the management expects to recoup in the current quarter. The gross margins for the quarter improved by 350 bps y-o-y but an increase in the employee cost and higher other expenses wiped out the gains, leading to a 60 bps y-o-y contraction in Operating Margins. OPM's stood at 21.1% while operating profit stood at Rs 791 crdeclining by 2.4% y-o-y,...
Ratnamani Metals & Tubes Limited (RMTL) reported in-line revenue performance, while margins and net profit remained above our expectations. RMTL reported revenue decline of 12.1% y-o-y, in line with our modest estimates, owing to closure of plants during the last 10 days of March due to nationwide lockdown restrictions. Ease in input cost pressures along with revenue mix change led to 320 bps y-o-y improvement in gross margin to 33.3%. However, gross margin expansion was offset by 29.5% y-o-y and 31.2% y-o-y increase in employee expenses and other expenses, resulting...
Ipca Laboratories Limited (Ipca) reported weak performance for the quarter. Revenues stood at Rs 1073.8 cr, up by 22% y-o-y. The growth in the topline was driven by a strong 17% and 30% growth in the formulations and the API segment respectively. The operating margins for the quarter contracted steeply to 15.7% attributable to higher employee costs and higher other expense. Consequently operating profit for the quarter at Rs 168.5 cr grew by a meager 2.4%. Higher depreciation charge coupled with a weak operating performance resulted in the PAT declining by 12.7% y-o-y to Rs 86 cr and missing estimates. IPCA has guided...
Mahindra & Mahindra's (MM+MVML) Q4FY2020 operating results were ahead of our as well as street estimates as the company managed to maintain margins despite the steep fall in the topline. Better mix, soft commodity prices, and cost-control measures enabled the company to retain margins in a challenging demand environment. Going ahead, management expects quicker recovery in rural areas, driven by record rabi production, higher MSPs, outlook of a normal monsoon, and increased rural spending by the government. We expect M&M; to perform better than other automotive players, given it derives 35%...
Grasim Industries Limited's (Grasim's) reported marginally better-thanexpected Q4FY2020 results. Its standalone net revenue declined 19% y-o-y (down 4.1% q-o-q) as both the viscose and chemical divisions were affected by loss of sales during last ten days of March 2020 (COVID-19 led nationwide lockdown) along with continued weak pricing environment. OPMs of the viscose division were 75 bps higher q-o-q than chemicals led by lower pulp prices. Adjusted OPM of the chemicals division declined 374 bps q-o-q led by lower user demand, higher imports and domestic capacity additions. Hence on a blended basis, OPM remained almost flat q-o-q at...
The Q4FY20 results of Greaves Cotton (Greaves) were lower than estimates across parameters. Earnings pressures are expected to sustain in near term as economic slowdown on account of COVID-19 would impact growth across segments. Moreover, negative operating leverage and pricing pressures from customers would impact margins. At CMP, the stock is trading at 14.4x FY22 earnings which is close to its long-term historical average of 16-17x....
Titan Company Limited's (Titan) consolidated revenue (including other operating income) declined by 3.6% to Rs. 4,711.6 crore. Revenue growth during January-February stood at 16% (driven by 16.5% growth in the jewellery business). Despite the decline in revenue, consolidated gross margin improved by 255 bps, led by higher studded ratio and lowering of customer discounts. The lockdown had a significant impact on the company's store fundamentals. April witnessed a complete washout, while gradual opening of stores led to 10-15% of sales in May. Post the easing of lockdown norms, 85% of Tanishq...
Valuation: Long trek to back normalcy, downgrade to Hold: We lowered our earnings estimates FY2021E/FY2022E due to a challenging environment in the view of COVID-19 and an anticipated delay in return of normalcy in multiplex business. However, in the long term, we remain positive on the stock, given its strong balance sheet (net debt free) and potential for healthy earnings growth considering India's movie-goers appetite for movies. The stock of ILL has moved up around 60% from its lows over one month and trading at 15x FY2022E earnings. We reduce our target multiples given multiple headwinds...
Relaxo Footwears Limited (Relaxo) posted mixed numbers in Q4FY2020 with revenues declining by 15% y-o-y (affected by lockdown) but higher gross margins leading to a 282 bps rise in reported OPM to 17.8% (comparable OPM improved by ~70 bps to 15.7%). FY2020 revenues grew by 5.2%y-o-y affected by lockdown in the fag end of Q4FY2020 (9MFY2020 revenue grew by 12.9%). Volumes declined by 2.7% in FY2020 affected by a lockdown in the last 1015 days of March and higher sales of premium products (~20% of overall revenues). Q1FY2021 performance would be affected by no sales during the lockdown period. Gradual opening of lockdown would help in recovery in...
