Alembic Pharma (ALPM) has underperformed the midcap and Sensex indices since 2015 due to subdued earnings. This cycle should reverse in the next 3-4 years.

Launched the loyalty program (see details on page 2). renovated property in Mumbai), Siddharth Jain, Director, emphasized on how the strategy of penetrating in metro/tier-1 markets with constrained aggression has helped in improving ATP/SPH/Ad revenue per screen. In order to penetrate deeper into the North, lot of screens have been signed in Gurgaon & Noida. However, Delhi continues to remain a challenge given scarcity of new malls. In all, the target of adding 70 screens for FY20E remains intact. A new loyalty program was also unveiled with a clear focus on...

The number of dengue cases has increased considerably in 2019 due to rising temperature, which promotes mosquito breeding. More than 67,000 people have been diagnosed with dengue this year across India. Excessive rain, flooding and poor sanitation have also led to multiple dengue cases, especially in Bihar, Maharashtra, West Bengal and Gujarat. This will result in higher demand for Household Insecticides (HI) products in the domestic market (especially out of home creams/gels). Further, the threat of illegal incense sticks has been gradually receding as the government is taking stringent regulatory measures...

This was driven by an increase in generation from pit head (lower variable cost) plants in the northern and eastern regions of India; on the other hand, higher variable cost generation from the southern region CERC, in its order, has taken note of this and (1) extended its implementation up to end-FY20, and (2) set out a methodology for sharing of benefits accumulated in the pool. The CERC has directed that benefits within the SCED pool should be shared equally between the participating generators and DISCOMs (after compensation for part load operations of generators). The benefit for each generator would be in proportion to their share of SCED schedule for the time Our analysis suggests that NTPC is entitled to a net benefit of ~INR1b for the first three months of the pilot scheme (see As observed, PLF for NTPCs non- pit head plants (such as Simhadri, Kudgi, Solapur and Dadri) have declined.

Larsen and Toubro (L&T;) has underperformed the broader market over the trailing two months, correcting by ~9%, led by sustained delay in revival of project tendering in the infrastructure sector against earlier expectations of revival post normal monsoon. L&T;'s FY2020 order inflow growth guidance of 10-12% seems unlikely to be achieved, with order inflows announced for Q3FY2020 till date remaining weak (three significant orders in Rs. 1,000 crore to Rs. 2,500 crore range, one mega order above Rs. 7,000 crore). To achieve the targeted FY2020 order inflow, L&T; would require Rs. 1 lakh...

Kotak Mahindra Bank (KMB) has forged a powerful banking franchise backed by a formidable liability profile.

High ARPU prepaid plans have seen ~27% price hike, which would result in ARPU increasing by INR38 from INR142 to INR180. While no rates have been disclosed for low ARPU Jio feature phone subscribers, we assume ~30% price hikes for these subscribers too. Low ARPU Jio phone subscribers would probably see a hike of INR25 in ARPUs from INR84 to INR109. The price differential between RJio and Bharti/VILs price plans is constant at ~INR40-50 for most of the popular quarterly bundled plans; however, we see the discount of RJios plan over Bharti/VIL reducing to ~8% from ~11-13% witnessed in the previous months. The hike in ARPUs should result in ~INR134b/INR119b incremental revenue/EBITDA, which is ~25%/58% rise over the previous revenue/EBITDA (2QFY20 annualized) with 89% incremental EBITDA. This is on the back of INR100b interest cost, which should be contained due to the recent capital reorganization announcements and reducing capex intensity in the market as indicated by RJio and other telcos.

5 December 2019 GATI is engaged in express distribution (surface, air and rail parcel), which contributes ~80% of its revenue. It has a pan-India network in the surface express industry. We, however, note that GATIs consol. Post-acquisition, AGLL will gain management control in GATI and thus an entry in express distribution, which is lacking in its portfolio. The SPA involves the acquisition of up to promoters of GATI, viz. Mr Mahendra Kumar Agarwal, Mahendra Investment Advisors, and TCI Finance. The SSA is for subscribing to the AGLL will thus acquire 19.4% of equity share capital (post preferential issue) of GATI. AGLL has also approved an open offer for the acquisition of 31.7m shares representing 26% of the paid-up equity share capital (post preferential issue and vesting of stock option) of GATI at a price of INR75/share. AGLL will acquire ~45% stake in GATI for INR4.2b.

In Q2FY20, Sheela foam Ltd. reported sales revenues of Rs 497 cr (down 7%YoY& down 3%QoQ), EBIDTA of Rs 70 cr grew strongly by 66% YoY& 13% QoQ. EBIDTA margin improved to 14.2% up 625 bps YoY& 210 bps QoQ. Profit of Rs 59 cr was up 2.4x on yearly basis and 1.5x quarterly basis.

Our constructive stance on ICICIBC (for a while now) has been mostly premised on the reduction in stress pools, consequently lower provisions and (therefore) earnings expansion. The visible risk-consciousness in corporate lending (and limited exposure to recent defaulters) reconfirms our stance on asset quality. The action on the digital and retail fronts sets the bank up for strong, granular and efficient growth. We think ICICIBC now merits a hike in valuation multiple from 2.0 to 2.2x. Maintain BUY. Our revised SOTP is Rs 565 (2.2x Dec-21E core ABV of Rs 200 and sub-value of Rs 125). At the recently concluded ICICIBC Analyst Day, we noted a common desire (and plan) across verticals to drive up risk-adjusted RoAE. The primary drivers of this expansion are (1) Improving oplev due to digitalisation of processes, (2) Expanding margins via faster growth of higher yielding retail loans, and (3) Reducing credit costs by following a calibrated growth path. The emphasis on digital capacity building seems to be a cross-company imperative.

ICICIBC held an analyst day to showcase its digital capabilities being placed at the core and leveraging the same across business segments & operations of the bank. Bank emphasized its journey of making One Bank One ROE as a principle for every business enabled through high focus on core operating profit. This will be led by high use of digital, technology & data analytics helping lower costs, maximize risk adjusted NIMs and enable customized offerings to increase stickiness. We have been witnessing some of the initiatives play out in past couple of quarters with improved market share in...

Refer to important disclosures at the end of this report Transforming into a strong retail-cumdigital bank; maintain Buy ICICI Bank has re-emerged as a strong retail bank over the years and has now showcased its cutting-edge in-built and impressive digital capabilities not only in retail but also in corporate, commercial and transactional/payment banking. The entire bank has imbibed the principle of One Bank, One RoE' with a focus on riskcalibrated profitable growth coupled with a strong digital edge. It will continue with branch...

In addition, (1) marquee client connects, (2) sales driven by multiple units (e.g. alliances, customer success, large deal teams), (3) strong focus/expertise in a few segments (e.g. CIB and WM in BFSI), (4) optimal scale and (5) a high quality management team remain the key competitive advantages of the company. Over 9MCY19, LTI has witnessed deceleration in growth (~9pp YoY) and drop in utilization (~300bp) due to issues faced at three of its key clients. While client specific issues seem to be largely behind, the key question is whether growth and margins will bounce back in a cautious spending environment. The recent large deal wins hint at growth accelerating over the next 12-18 months. L&T; Infotech It is interesting to note that during the previous cycle of cautious IT spending (Jun16 to Dec17), LTI consistently outperformed growth of Tier-I companies and that too by a wide margin (1-11pp YoY).

For e.g. many companies are offering fans, yet the market concentration is quite high amongst the top 4-5 players. In Air Coolers, the growth rate is ~30%+ with again a clear path to rank among the top-3 players in 3 years. While its market share is quite low in many categories that come under Kitchen Appliances, CROMPTON believes that there is room for growth. The need is for meaningful distinctive offerings, (b) investment in marketing is required, the cost structure needs to be in place to enable the above two parameters without charging unusual premium, and have a GTM strategy to sell the product. Though LEDs have longer replacement cycle, demand is expected to be strong in the near term as new socket growth is quite robust, the replacement socket growth needs to be tapped and there is huge scope for premiumization in LED products compared to traditional lighting includes 3,500+ primary customers and 1,50,000 retail touch points.

PV segment : Passenger vehicle sales saw a downfall in November due to lower discounts (post festive season) coupled with higher base year (Diwali being in November last year). However on positive side, inventory days has reduced to comfortable levels of 25-30 days due to festive season and heavy discounts coupled with a major production cut by 11-13% initiated by all the players which meant to be push factor for the uptick in sales and inventory management. Auto players namely Maruti Suzuki, M&M;, Honda and Tata motors reported a degrowth in sales volume while Hyundai motors reported a uptick in volumes on yearly basis on account of extending consumer offers and exchange bonus. We are expecting market scenario to improve in next month owing to year end discounts for clearing existing inventory. But we need to closely monitor over...

We initiate coverage on Lemon Tree Hotels Ltd (LTH) with a BUY rating and TP of Rs85 based on 26x EV/EBITDA on FY22E. We believe LTH's 1) Leadership in mid-market hotel segment in the domestic market, 2) Robust pipe line of inventory addition, 3) Focus on asset light business model, 4) Inorganic expansion through acquisition of Keys Hotels and 5) Foray into upscale segment through Aurika brand would be key catalysts for earnings growth. We expect the company to clock net sales/EBITDA/PAT CAGR of 19.4%/22.6%/36.8% over FY19-22E. Our earlier thesis of domestic hotel industry to benefit from increasing occupancy owing to demand-supply mismatch, which will lead...

We initiate coverage on Gujarat State Petronet Ltd (GSPL) with a Buy and SOTP-based target price (TP) of Rs303 (39.8% upside from CMP, including the value of its stake in Gujarat Gas Ltd. Key catalysts are: (i) GSPL's expansion of its statewide gas grid in India's gas hub Gujarat and foray into the northern markets through its new Mehsana Bhatinda- Srinagar pipeline - MBPL (ii) huge leverage to likely surge in new gas supplies from KG basin as well as imports (iii) healthy free cash flows and (iv) compelling valuation. GSPL, India's second largest gas transmission company, is now setting its eyes on pan-India growth. We expect 6% CAGR in transmission business volume based on ongoing network expansion in Gujarat and proposed last mile links...

3 December 2019 Indonesia and Malaysia are the worlds largest palm oil producers and together account for ~86% share of palm oil production globally. According to both the South-East Asian countries are likely to increase the usage of palm oil for the production of biodiesel, which shall be used for their own consumption. The Indonesian government intends to implement B30 biodiesel (from B20 currently) in 2020, which would increase domestic consumption of crude palm oil by 3MMT. Therefore, post implementation of B30, incrementally 9% of Indonesias supply would be directed toward biodiesel Additionally, Malaysia which accounts for ~32% of the global production is also in the process of implementing B20. If B20 is implemented, domestic consumption of crude palm oil in Malaysia will incrementally increase by 1MMT; the country currently produces ~19MMT crude palm oil. GOAGRO is a participant in the governments Oil Palm Development Program (OPDP), which gives the company access to produce of Fresh Fruit Bunches (FFBs) from farmers in designated areas.

ICICIBC has started offering online credit cards to pre-approved customers, while the effective use of technology has facilitated a significant improvement in opex and delinquency trends across key product segments. ICICIBC suggested for robust traction in its unsecured loans business it has reported a 41% CAGR since FY15 and will continue growing strongly as the market share in these segments is not very high. ICICIBC has built customized digital solutions to accelerate growth in business banking and expects this segment to grow at 35-40% over the next few years. The bank follows four levers of business based on risks, (ii) customized product offering, (iii) partnership with fin techs and (iv) strong distribution. ICICI Bank ICICIBC is engaging with various start-ups to provide improved customer proposition, penetrate into newer markets and reduce operating costs across product segments. It is making equity investments into high growth and disruptive fintech start-ups which helps build cutting-edge customized banking solutions for customers and improves competitive positioning.