ITC's Q2FY2021 performance was affected by localised lockdowns in July-August resulting in a 12% decline in volume of core-cigarette business (net sales was down by ~14%). Cigarette sales started recovering from September but yet to reach preCOVID levels. Non-cigarette FMCG performed strongly, rising by 18.4% led by staples, operating profit grew 66% y-o-y to Rs. 366 crore (margins rose 300 bps to 9.7%). As non-cigarette FMCG business scales up, its OPM is expected to improve further...
Automotive demand is improving with Bosch expected to reap benefits of increased content per vehicle. Bosch topline grew 7% yoy in Q2; with ongoing festive season, Bosch expects double-digit growth in Q3. We expect strong recovery in FY22 driven by normalization of economic activities. Margins are expected to improve going ahead, driven by increased localisation,...
Q2 results were ahead of estimates across parameters; BKT posted best ever quarterly volumes; OPM rose 540 bps yoy to 32.8% BKT is witnessing strong demand traction particularly agri segment and has raised...
Consolidated revenue grew by 4.1% y-o-y to Rs. 1,880.3 crore (driven by a sales and volume mix of 3.6%), ahead of our expectation of Rs. 1,842.9 crore. The consumer bazaar business registered volume and mix growth of 7.2%, while B2B (largely industrial products) business declined by 8.4% in Q2FY2021 (but recovered from 53% decline in Q1). Improved growth in the consumer business is attributable to double-digit growth in the rural markets and tier-IV towns. Globally, the American region registered a strong growth of ~52% in revenues and EBIDTA margins improved to 26% (excluding one-time tax gain of Rs. 9.5 crore). Benign input prices (largely those of VAM) aided in gross margins to remain high by 256 bps to 55.9%....
Divis Laboratories Limited (Divis) reported impressive numbers for yet another quarter with results ahead of estimates. A double digit growth in the API as well as custom Synthesis business drove the topline growth, while backward integration benefits and gross margin expansion drove the growth in operating margins, leading to a sturdy double digit earnings growth. Consolidated sales for the quarter stood at Rs. 1,749 crore, is up 21% y-o-y, due to 26% growth in API and 18% growth in custom synthesis business. OPM at 43.3% expanded sturdily by 933 bps y-o-y because of rise in gross margins and benefits of backward integration. Consequently, reported PAT at Rs. 519.6 crore was up 45.6% y-o-y and was ahead of estimates....
Q2FY2021 was a mixed bag, as revenues grew by ~19%, but gross margins declined by 269 bps, in turn limiting rise in OPM to 97 bps to 14.4%; operating profit grew 27%. The India beverages grew by 32%; India foods revenues rose 13%; Tata Coffee (including Vietnam) grew by 17%, while international tea business' growth moderated to single digits as effect of pantry loading faded. Market share gains in domestic branded tea and salt, doubling of distribution reach, better penetration of packaged foods portfolio and new launches remain key growth levers in the near term. A significant increase in domestic tea prices will stress margins...
Q2FY21 PAT at Rs. 2,477 crore (up 2.4x y-o-y) substantially beat street estimates led by large inventory gains of Rs. 1,780 crore and beat in core GRM at $2.7/bbl. However, earnings missed our estimate due to lower marketing margins. HPCL outperformed peers with strong core GRM of $2.7/bbl vs. $1.5/bbl for BPCL and negative $1/bbl for IOCL; refinery utilization of 103% (vs. 79.5%/82% for IOCL/BPCL). Board approved share buyback not exceeding Rs. 2,500 crore at maximum buyback price of Rs. 250/share (34% premium to closing price of Rs. 187 on November 04, 2020) from open market. Buyback and healthy dividend yield of ~8% to support stock prices....
Godrej Consumer Products Limited's (GCPL) revenue grew by ~11% to Rs. 2,915.1 crore with India and international business growing by 11% and 12%, respectively. Domestic soaps category reported strong double-digit growth; household insecticide growth moderated to 4% due to supply disruption. On the international front, Africa and Indonesia grew by 10% and 5%, respectively, during the quarter. HI growth is expected to rebound due to higher consumer demand, while soap...
Indian hotel Company Limited's (IHCL's) Q2FY2021 performance improved sequentially as revenues rose to Rs. 256.7 crore from Rs. 143.6 crore in Q1FY2021. Standalone occupancy ratio improved to 32.3% in Q2FY2021 from 20.5% in Q1FY2021; average room rentals (ARR) rose by 12% to Rs. 5,424 from Q1. Company's RESET initiative is giving desired results - 1) Newer initiatives contributed Rs. 135 crore to revenues, operating cost fell 51% (fixed cost fell by Rs. 134 crore through effective asset management). Hotel industry set for strong revival in FY2022/23 as foreign tourist arrivals are...
Q2 performance was strong with revenue and earnings beating estimates. Management expects domestic formulations business to improve further led by new launches and a gradual improvement in the acute therapies, while the chronic segment is likely to grow strongly. Pick up in the specialty business and sturdy new product pipeline would enable US business growth....
JK Lakshmi Cement Limited (JKL)reported strong outperformance for Q2FY2021 earnings led by strong cement volume offtake and reduced opex/tone. JKL's standalone revenues grew 11.7% y-o-y to Rs. 1045 crore led by 15.8% y-o-y rise in cement volume to 2.39 million tone (much higher than our as well as street estimate). The blended realization improved by 1.1% q-o-q (down 3.5% y-o-y) to Rs. 4381/tone. On the opex front, lower power & fuel cost (down 14.9% y-o-y on per tone basis led by lower pet coke prices) and lower freight costs (down 4.8% y-o-y, down 2.1% q-o-q) led to an overall decline in opex/tone at Rs. 3598 (down 5.8% y-o-y, up 0.5% q-o-q). Hence, EBITDA/tone increased by 8.5% y-o-y (up 4% q-o-q) to Rs. 783 (versus our estimate of Rs. 736/tone). Consequently,...
State Bank of India's (SBI's) Q2FY2021 numbers largely met expectations, wherein operational numbers were in-line, but asset quality performance was mixed. Collection efficiency for domestic loans (excl. agri loans) is at an encouraging 97%. However, on a normalised basis, asset quality deteriorated marginally, with GNPA and NNPA ratios increasing by 44 bps and 22 bps, respectively. Asset quality picture appears manageable, PCR of 88.2% is a cushion for investors; legacy assets are well-provided for; margins expected to be stable SBI currently trades at 0.8x / 0.7x its FY2022E / FY2023E book value; we maintain a Buy...
Solid presence in the chronic and sub-chronic segments (which are the key growth drivers for Indian pharmaceutical markets) and an improving outlook for the acute segment provide ample growth visibility for India business Easing pricing pressures, sturdy new product pipeline, and ramp up in the recent product launches would be key growth drivers going ahead for the US business. Strong growth prospects, sturdy balance sheet, and healthy return ratios would...
Q2 FY2021 results were strong, with operational results beating expectations; asset quality improved sequentially and margins too rose. Overall collection efficiency for individual loans stood at 96.3% in September (first month after RBI moratorium ended) which is encouraging Asset quality improved with overall NPA ratio falling 6 bps q-o-q to 1.81%; company is better capitalised (Tier-I at 19.5%; up from 16.2% in Q1 FY2021) which adds to balance sheet strength. HDFC is currently available at reasonable valuations of 3.7x / 3.4x its FY2022E...
Value of New Business (VNB) written during H1FY21 grew by 20% y-o-y, while New Business Margin (NBM) expanded by 320 bps y-o-y to 24.2%, helped by a shift in product mix towards NPAR- Savings and Protection products. EV was at Rs 11,047 Cr., with RoEV at 17.5%. We believe the Indian insurance sector has a long growth runway; and Max Life, with strong metrics, stable bancassurance partnership with Axis Bank, etc is well-placed to benefit from growth opportunities. Max Financial is available a reasonable valuation of 1.7x / 1.5x FY2022E / FY2023E MCap / EV; We maintain Buy with a revised PT of Rs. 750....
With a three-pillar strategy, ZWL is strongly placed to achieve earnings CAGR of 27% over FY2020-23. We stick to our Buy rating with unchanged PT of Rs. 2,300. Zydus Wellness Limited's (ZWL's) revenue grew by 5% y-o-y to Rs. 342 crore, almost in line with our expectation of Rs. 336.5 crore driven by leadership position and market share gains across key categories. High input prices (palm oil prices increased by ~30%) led to a 301 bps decline in gross margins to 53.7%. In spite of this, OPM fell by 141 bps to 7.9%, largely due to lower advertisement costs and other expenditure. Operating profit declined by 10.9% y-o-y to Rs. 27.1 crore due to lower operating leverage. Pre-tax...
City Union Bank (CUBK) posted in-line with expectations results; asset quality was largely stable with improving PCR. Margin also improved on a sequential basis. Asset quality improved on a sequential basis, with GNPA at 3.44% and NNPA at 1.81%...
MLL posted better-than-expected performance for Q2FY2021 led by rebound in its SCM business revenue growth at almost pre-COVID level. E-commerce and consumer drive non-M&M; segment revenues. The company added 0.8msf warehousing space and introduced Flexi Warehousing...
Revenue beat was driven by strong out-performance in domestic business (33% y-o-y growth) and exports (25% y-o-y increase). Gross margin expansion and higher operating leverage led by sharp improvement in EBITDA margin. Robust order book position of $1.5 billion in CSM business and decent growth in domestic market bodes well for sustained strong revenue growth for PI Industries. Management maintained its FY2021E growth guidance of 20%. Focus on acquisition in high RoCE business of Pharma and specialty chemicals would boost yield on QIP funds and improve margin and return profile of PI Industries in the...
We maintain our Buy rating on Bharti Airtel with an unchanged price target (PT) of Rs. 710, given favourable market structure and continued weakness in Vodafone Idea. Beat on revenue and margin fronts; ARPU improvement surprised positively, led by strong net 4G subscriber additions; growth was broad-based across portfolio, though star segment was India wireless business (EBITDA grew 12.8% q-o-q) Digital capabilities have been helping Bharti to acquire quality customers, increase wallet share,...
