Buy

Balance sheet discipline to determine stock performance Tata Steel reported consolidated EBITDA of INR 64.7bn, in-line with JMfe. Indian operations delivered a multi quarter high EBITDA per ton of INR 17k driven by higher realisations. Corus performance improved significantly, driven by higher realisation and better operational efficiency. Strong performance in standalone and European operations were significantly offset by an adverse forex movement of c.INR 11bn at financing entities. Bhushan Steel reported an EBITDA of 46bn in 1QFY19 implying an EBITDA/t of INR 9.7k/ton. We continue to remain positive on the steel cycle and factor in normalized spreads for Indian and...

We retain Buy on State Bank of India (SBIN) with revised SOTP-based TP at Rs350. Q1FY19 results saw several hits healthy NII, improved margins, strong core operating profit and lower slippages; and few misses feeble other income growth, elevated provisions and thus yet another quarter of losses. Watchlist portfolio stands reduced to 1.24%; management has reiterated its stance on moderation in slippages / credit cost for FY19E. Focus shifts towards recoveries and balance sheet growth. Capital position remains strong, subsidiaries profitable. Valuations continue to remain attractive. Retain BUY....

We maintain our Buy rating on Aurobindo Pharma (APL) and revise TP to Rs1,010 (earlier Rs1,070) based on 18x March'20E EPS of Rs56.2. The company's Q1FY19 revenue was in-line with our expectations. However, EBIDTA margin and net profit were below expectation. APL's sales grew 16% YoY, margin declined 460bps to 18.3% and net profit declined by 12% YoY. Its specialised segments such as injectables, penam, microspheres, hormones, oncology, vaccines, neutraceutical, depot injections, OTC and peptides would improve margins due to complexity in the manufacturing. APL has developed a robust pipeline of 487 ANDAs for the US...

Strong Performance across verticals : Maintain BUY GMM Pfaudler Ltd (GMM), for Q1FY19, reported a strong set of numbers. Revenue grew at 35.4% YoY to Rs 932mn (est Rs 925mn). EBITDA showed growth of 93.4% YoY to Rs 153mn (est Rs146mn) with 494bps YoY increase in margin from 11.4% in Q1FY18 to 16.4% in Q1FY19 due to higher export revenue and lower power cost. Net profit inclined by 63.9% to Rs 91mn (est. Rs 88mn) due to operationally strong performance. During the quarter, export accounted for 10% of revenue compared to the...

IPL beat strengthens our view; Subscription and Ad businesses continue the momentum Q1 numbers above expectations on IPL surprise. Sun TV Network Ltd (Sun TV)'s Q1 FY19 numbers came above our expectations as both Subscription as well as Advertising revenues grew strongly at 15% and 20% yoy respectively. IPL revenues got a boost at 3.82bn by the virtue of its team SRH ending up this season as runners up and overall surge in sponsorship and gate revenues. Management highlighted that despite dip in market share in Q1, there has been a good revival in it in July. Though the cable TV revenues grew by just 4% on a high base of last year which had some catch up revenues...

Sector: Textile /Small Cap | Earnings Update 1QFY19 Background: Trident Ltd was incorporated in the year 1990, headquartered in Ludhiana, Punjab. Company operates in three key business segments such as Home textile (49% of revenue), Yarn (33% of revenue) and Paper (18% of revenue) with manufacturing facilities located in Punjab and Madhya Pradesh. Company has a capacity to produce 90,000 MTPA of terry towel, 43.2mn mtrs of bed linen, 115,200 MTPA of yarn and 175,000 TPA of wheat straw based paper. Between FY15-18, Company's...

Sector: Auto /Mid-Cap | Earnings Update 1QFY19 Background: TVS Motors Company Limited, the third-largest two-wheeler manufacturer in India, is a part of TVS Group; it manufactures motorcycles, scooters, mopeds and three-wheelers in India. TVS Motors is credited with many innovations in the Indian automobile industry, notable among them bein g the introduction of India's first two-seater moped, the TVS 50cc. The company has presence in all the three sub-segments of two wheelers, i.e., motorcycles, scooters & mopeds as well as the three-wheeler segment. Motorcycles, scooters, mopeds and three-wheelers contribute 38%, 23%, 35% and 4%, respectively, to overall volumes . Exports (mainly Africa) currently account for 15% of the overall volumes....

Sector: Construction Material /Mid-Cap | Earnings Update 1QFY19 Background: Somany Ceramics Ltd (SCL) was incorporated in 1969, and is now the third largest organised tiles manufacturer in India. Company, currently has installed capacity of 55.29 MSM and through outsourcing model has access to 9 MSM of additional capacity. Company also has capacity to produce 1.8mn pcs of sanitary ware products. Company's has two own manufacturing plant in Kassar, Haryana (19.63 MSM) and Kadi, Gujarat (6.65MSM). Company's has seven subsidiaries / Associate plants located in Gujarat with a capacity of 29MSM. In FY18, SCL has sold 49.52 MSM and we have estimated total industry market share of ~6.3% (volume), while it has...

Export formulations (30% of FY18 revenue) grew at ~6% CAGR in FY1118. The exports formulations growth was on the back of growth in both international generics and international branded formulations. The international anti-malarial institutional business has also contributed substantially to overall exports growth. US traction will take more time than earlier estimated due to USFDA import alerts for the Ratlam facility that is the only API source for Silvassa and Pithampur (Indore) formulations plants along with Silvassa and Pithampur (Indore) plants that are specifically earmarked for US business, besides third party sales, thus...

ICICI Securities Ltd | Retail Equity Research SBI reported a loss of | 48.7 billion, led by higher provision from investment depreciation, higher wage opex and NPA provisions Gross slippages remained elevated at | 14349 crore vs. | 33670 crore, higher than expected. Out of this, corporate slippages were | 3704 crore (| 3386 crore from watchlist). About | 9984 crore was fresh slippages. Depicting a recovery from steel accounts in NCLT 1 of | 15000 crore, GNPA ratio declined 22 bps QoQ to 10.69% while NNPA...