Buy

Maintain BUY with a revised TP of Rs 691 (18x FY20E and Rs 135/sh for pipeline). Glenmark pharma (GNP) reported a decent set of numbers in its 1QFY19 results. Revenue at Rs 21.3bn was down 8.6%YoY and 5.3%QoQ. EBITDA margin at 14.6% declined 880bps YoY but recovered 150bpsQoQ. PAT at Rs 2.2bn was reduced by 31.6%YoY but showed a strong sequential growth of 47.4%. These numbers are not comparable on a YoY basis because GNP had launched Ezetimibe (generic Zetia) with its partner Endo in December 2016, and had exclusivity on the product.

Maintain BUY with a TP of Rs 375 based on 16x FY20 EPS. Sonata delivered a decent quarter with slight miss on revenue but margin beat was a positive surprise. International IT services (IITS) revenue was up 1.1% QoQ (+3.0% CC) to USD 37.8mn, below our estimate of USD 38.5mn. IITS margin jumped to 22.2% (vs. our est. of 20.0%) due to higher IP-led revenue (+5.6% QoQ and 82% of incremental rev). The company is witnessing increased traction on the Microsoft Dynamic AX (Cloud ERP platform) and is a preferred ISV development center partner for Microsoft.

We maintain BUY with SOTP based TP of Rs 436/sh. SADE 1QFY19 net revenues at Rs 9.1bn was 11.0% below our estimates. EBITDA at Rs 1.1bn was 9.1% below our estimates, with EBITDA margin expansion of 43.9bps YoY to 11.7%. Increased mining equipment leasing/interest on subcontractor advances/FDR interest income contributed to 76% YoY increase in other income resulting in PAT of Rs 634mn, 20.1% above estimates.

Sonata Software's USD revenue from IITS business rose by a relatively subdued 1.1% QoQ to touch US$37.8mn, while in CC terms it rose by 3% QoQ, which was largely in-line with our estimate. In INR terms, IITS revenue rose by 6.3% QoQ to Rs2.57bn. On the other hand, DPS revenue grew 12.5% QoQ to Rs4.37bn. Consolidated revenue saw a 10% QoQ rise to Rs6.88bn. Consolidated EBITDA margin rose by 50bps QoQ to touch 10.7% aided by depreciating INR. On YoY basis, the expansion was even more substantial at 314bps. In absolute terms, EBITDA rose by as much as 53.9% YoY, aided by higher contribution of IITS business and INR depreciation. Segment-wise, IITS margin expanded by a robust 307bps QoQ to 22.9%, while DPS margin...

Strong Traction in US Business to Continue; Upgrade to BUY Despite Taro's underperformance, Sun Pharmaceutical Industries (SUNP) has reported betterthan-expected performance in 1QFY19, led by healthy US sales (ex-Taro), strong growth in domestic business and lower YoY base. Its sales and EBITDA grew by 16% YoY and 47% YoY, respectively, while PAT surged by 87% on higher other income, strong operating performance and lower tax rate. Despite 215bps YoY contraction in gross margin to 70.8% due to change in product-mix and Taro's higher raw material cost, EBITDA margin expanded by 459bps YoY to 22.2% owing to lower other expenses and R&D; spend. Taro's US sales fell by 4.2% YoY, while ex-Taro US sales grew by 17.5% YoY to US$240mn owing to launch of gWelchol AG, Yoansa and...

ff Acquisition: CDH has acquired 51% stake in Dehradun-based Windlas Healthcare, which gives access to a USFDA-approved facility (oral solid; plain vanilla and niche products). CDH expects this facility to help in commercialisation of 20-30 products over next 2-3 years,...

NBCC has reported a mixed performance in 1QFY19. While its revenue witnessed a significant ~45% YoY growth (GST adjusted), EBITDA declined by 7% YoY and 67% QoQ to Rs547mn (significantly lower than our estimate) and EBITDA margin fell by 131bps YoY and 435bps QoQ to 3.4%. Execution of low-margin works and unbilled revenue were the prime reasons for dismal margins, which the management expects to improve in subsequent quarters. Net profit grew by 21% YoY (-52% QoQ) to Rs677mn mainly supported by 79% YoY growth in other income. While current order book at Rs800bn continues to look impressive, Rs350bn of order backlog is under execution phase. Order inflow for 1QFY19 stood at Rs40bn and NBCC expects to add...

Background: Dewan Housing Finance Corporation (DHFL) promoted by the Wadhwan group, commenced operations in 1984. DHFL with a total AUM of INR 1,209bn is the 3rd largest housing finance company with a market share of nearly~ 4% and operates through a network spread across in 352 locations. It is the only Housing Finance Company with focus on LMI customer segment. Distribution footprint is primarily spread across Tier II / III cities and outside the municipal limits of the Metros with...

Tata Steel reported a steady set of operational Q1FY19 numbers. Indian operations reported sales volume of 2.97 million tonnes (MT) (up 8% YoY, down 2% QoQ) marginally lower than our estimate of 3.1 MT. European operations reported steel sales of 2.45 MT (up 1% YoY, down 5% QoQ) broadly in line with our estimate of 2.4 MT The consolidated topline came in at | 37833 crore (up 28% YoY, 5% QoQ). EBITDA/tonne of domestic operations were at | 17078/tonne (vs. Q4FY18:| 15872/tonne, Q1FY18:| 10786/tonne), marginally higher...

Net sales grew at a robust pace of 28.9% YoY to | 1625.2 crore (our estimate: | 1509.0 crore) due to 21.2% strong growth in PMC revenues to | 1392.8 crore (our estimate: | 1325.7 crore). Also, given the changes in accounting standard to Ind-As 115 for revenue recognition from contracts with customers, NBCC reported stellar growth of 1370.1% YoY to | 129.7 crore in the real estate division The EBITDA margin contracted 127 bps YoY to 3.9% (our estimate:...