EIIL balance sheet likely to get de-leveraged post monetization of Chennai land for Rs 1 Bn. Management sounded confident about 1/ monetizing other non-strategic assets in the near term as and 2/ strengthening balance sheet...

We initiate coverage on Brigade Enterprises (BEL) with a Buy rating. Our optimism is driven by its strategy focused on increasing the portfolio of rental assets - both commercial and retail - and the expected strong growth in the hotel sector. BEL has an impressive array of 2.6mn sqft of leasable area (commercial and retail) in 1HFY19 which is expected to increase to 4.9mn sqft by FY21E and to 8mn sq ft by FY25E. An expected sharp rise in commercial and retail portfolio amid a reducing vacancy rate and likely rise in rental rates will help cash flow in the medium to long term and partially mitigate the concerns arising from continued weakness in the residential segment. Further, a favourable demand-supply balance in the...

We initiate coverage on Brigade Enterprises (BEL) with a Buy rating. Our optimism is driven by its strategy focused on increasing the portfolio of rental assets - both commercial and retail - and the expected strong growth in the hotel sector. BEL has an impressive array of 2.6mn sqft of leasable area (commercial and retail) in 1HFY19 which is expected to increase to 4.9mn sqft by FY21E and to 8mn sq ft by FY25E. An expected sharp rise in commercial and retail portfolio amid a reducing vacancy rate and likely rise in rental rates will help cash flow in the medium to long term and partially mitigate the concerns arising from continued weakness in the residential segment. Further, a favourable demand-supply balance in the...

We visited JSW Steel's (JSTL) Vijaynagar steel plant on 11-12th December 2018. This plant is the largest single location steel producing facility in India, accounting for 12mtpa of JSTL's overall capacity of 18mtpa. We note capacity at this plant will increase by 1mtpa to 13mtpa in FY20 as JSTL executes its 6.7mtpa overall expansion plan.

Indraprastha Gas Ltd. (IGL) is a JV between GAIL and BPCL; while Government of NCT of Delhi holds 5% equity. IGL operates in two segments - compressed natural gas (CNG) and piped natural gas (PNG). The CNG business (76% of FY18 sales) involves distribution of CNG to vehicles through gas stations. In PNG (24%), IGL supplies natural gas to homes and commercial/ industrial users.

Central Depository Services (CDSL) is one of two depositories in India and the only one to be listed. The BSE initially promoted CDSL,but subsequently diluted its stake to leading banks, which became CDSL's 'Sponsors'.

Headquartered in Gurugram, Whirlpool of India Limited (WIL) is one of Indias leading manufacturer and marketers of major home appliances like Refrigerators (57% of revenues), Washing machines (21% of revenues), Air Conditioners (9% of revenues) and Microwave ovens.

TeamLease Services Ltd. (TEAM) is the largest player in the organized staffing industry with a market share of ~6%. It has presence in all 29 states with a network of partnerships delivering in over 6,000 locations with 2,250 clients and 1,700 core employees.

Our TP is Rs. 329/sh, based on 17x Dec-20 EPS. We met Petronet LNG (PLNG) recently. Capital allocation and competition from new LNG terminals are the legitimate concerns. However, we believe that 100% take or pay contracts (running till 2028), contractual 5% escalation in regas tariff and sensible capital allocation is likely to protect shareholder value. Valuations are reasonable at 12.7x FY20E and 10.7x FY21E EPS, in view of PLNGs de-risked business profile and earnings visibility.

Outlook Ramp-up of downstream projects to help boost refining and petchem margins; Retail and telecom businesses on strong footing: We expect RIL's refining margins to remain strong in FY2020E as the petcoke gasification project is expected to be fully ramped up by Q4FY2019E. Moreover, implementation of IMO regulation from January 2020 is expected to further benefit refining margins of RIL. Outlook for...

A Low-cost Call Option On Longevity And Higher Margins Contrary to our lukewarm stance earlier, we are turning structurally more positive on HCL Technologies (HCLT) post announcement of its purchase of seven select IBM IPs for US$1.8 bn on 7 December 2018. We believe this stance may be non-consensus. We also believe the cumulative investment of ~US$3.1bn in acquiring the IPs over the past two-and-a- half years to be the price of a low-cost call option on longevity and higher margins. At ~6x EBITDA (for the cumulative IP), we believe these acquisitions do not have much downside. But it opens up the potential for a large upside in terms of the enterprise software opportunity which has hitherto not been addressed...

We attended Persistent Systems' (PSYS) Analyst Day, where the company showcased - through panel discussions - its capabilities and references in the areas of Data/Machine Learning/IoT/Cloud for catering to industries such as BFS and Healthcare & Life Sciences.

and fuel costs the long term demand is intact as BS VI implementation and scrappage policy will trigger a strong and continuous demand for the sector. The company being market leader in axles business is well placed in gaining incremental business from its...

visibility; Strong growth in the aftermarket space to further bolster growth: Rico Auto Industries (RAI) has a robust order book (valued at Rs. 4,800 crore) currently, which is executable over the next five to seven years. The size of the order book is substantial (FY2018 turnover was about Rs. 1,200 crore). As per management, RAI has also received new business (new orders in the order book...

We recently met the management of TCS to discuss its outlook on the demand environment, revenue growth trajectory going forward, its digital strategy and potential challenges relating to H1-B visa issues...

JLR's wholesale volumes declined 9% YoY (+5% MoM) to 49.3k units (est. 50k units) including the China JV volume at 4.1k units (-49% YoY) in Nov'18. Jaguar volumes increased 23% YoY to 15.1k units (est. 14k units) while Land Rover volumes declined 18.5% YoY to 34.2k units (est. 36k units).

We attended Zensar's analyst meet where it highlighted the progress on its strategy and initiatives taken for future growth. Zensar emphasized its focus on Digital through its RoD Next platform. It outlined the digital spend across the verticals and why Zensar is well positioned to capture the opportunity. The company took a bold and aggressive decision about 2.5 years ago to become a 100% digital company before taking the platform to its customers. Company's digital enterprise is built on 34 digital platform having 650+ releases with over 1.5mn downloads. The company is building...

DFC continues to be the most important long-term trigger as apart from boosting volumes, it will aid margins. Distribution logistics will help reduce rail dependence and counter falling lead distances. Management is...

Funding of Heinz India acquisition will be done through a mix of equity and debt in the ratio 1.7:1: Zydus Wellness (Zydus) is planning to raise Rs. 4,075 crore through a mix of preferential allotment of equity shares and issue of non-convertible debentures for funding the acquisition of the entire shareholding of Heinz India Pvt. Ltd. valued at ~Rs. 4,600 crore. The...

Muthoot Finance's Q2FY19 has seen revival in momentum of its core business with AUM growth of 17% YoY as against 11% during last quarter. NII at Rs4.8bn (growth of 9% YoY) and PAT at Rs11bn (de-growth of 5% YoY) has narrowly missed our estimate of Rs4.9bn and Rs11.3bn respectively. Stage III loan assets have eased by 94bps sequentially to 1.9%. All the subsidiaries are witnessing healthy traction, accounting for 10% of the overall loan book. On the back of higher loan growth, we raise our TP to...