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Subdued exports might have marred the show. Yet Cummins India (KKC IN) product profile acts as insurance for critical applications like data storage, real estate and healthcare. The outlook here is stronger. True, outlook on exports is bleak. And that casts a cloud. Yet we remind that will not be forever. Given superior product profiles be it Q60 engines or be it dual fuel engine for DEMUs, the pricing power and cost efficiency we reiterate will keep the enviable RoE intact. We upgrade the stock to BUY from our earlier ACCUMULATE....
Aided by improved operating synergies and solid realizations recovery, Mangalam Cement (MCL) has reported robust performance in 1QFY17 with its operating profit at Rs471mn (vs. Rs40mn loss in 1QFY16), which is higher than our estimate of Rs346mn. Operating cost/tonne declined ~13% yoy mainly owing to significant dip in power and fuel costs (down by ~33% yoy & ~6% qoq on per tonne basis) on account of low clinker production, higher wind power generation and increased usage of petcoke. EBITDA/tonne came in strongly at Rs778 in 1QFY17 vis--vis Rs462 in 4QFY16. However, its sales volume remained tepid (flat on yoy at 0.61mnT...
GlaxoSmithKline Consumer Healthcare (GSK Consumer) has reported lower-thanestimated performance in 1QFY17 with its net sales declining by 5.7% yoy to Rs8.9bn and net profit growing by just 2.9% yoy to Rs1.6bn. Volume growth in the domestic business is estimated to have been flat. However, as more than 2/3rd of its revenues accrue from urban markets, any apparent recovery in urban demand should benefit the Company the most. Furthermore, increasing share of Low Unit Pack (LUP), improving distribution network and strong pricing power are expected to aid growth for GSK Consumer, going forward. The stock currently trades at reasonable valuations of 30.7x FY18E earnings. We revise our recommendation...
Arvind Ltd is the flagship company of the Lalbhai Group, established in 1931. Arvind's business is broadly classified into Textiles, Brand & Retail and others. Textiles, Brand & retail and others which accounts for 69%, 28% and 3% of the revenue respectively. In India, Arvind sells international brands such as Arrow, US Polo Associate, Tommy Hilfiger (JV brand), Calvin Klein (JV brand), IZOD, Elle, Cherokee, GANT, Hanes, Billabong, Wonderbra, Ed Hardy, Geoffrey Beene, Nautica etc. Company has a strong distribution network of 998 stores with a retail space of ~1.6mn sq.ft. (Brands: 903 stores with ~0.87mn sq.ft retail space & MegaMart: 95 stores...
D-Link India has seen deterioration of sorts for its income from operations not only declined by an appalling 12% last quarter (the first reduction in seventeen quarters) after two quarters of sub 7% growth, but also hit the lowest reading since the third quarter of FY15. Abysmal income also weighed heavily on margins - OPMs shriveled by a daunting 320 bps to 1.2% (ten quarters mean: 4.6%; median: 4.7%). Material margins shrunk by 50 bps to 15.5% - 16.9% in Q4FY16. Other expenses rose fiercely to Rs 15.58 crs ($2.3m) compared to Rs 12.32...
Results below estimates: Coromandel International's (CRIN) overall revenues fell 6.6% YoY to INR20.5b (est. of INR24.4b) in 1QFY17. EBITDA declined 5% YoY to INR886m (est. of INR1,075m), while margins improved 10bp YoY to 4.3% (est. of 4.4%). Nutrients to Crop Protection revenue mix stood at 82:18, while EBIT mix was 36:64. Margins in Fertilizer declined sharply on account of higher dealer discounts and inventory losses with the company aligning prices with the raw material price decline (government intervention). Consequently, PAT de-grew 48% YoY to INR79m (est. of INR323m) in 1QFY17. Subsidy outstanding...
Colgate-Palmolive (CLGT) posted net sales growth of 8.9% YoY (est. of 9.5%) to INR10.1b (Ind-AS). Adjusting for excise impact YoY, organic sales growth was 12.5% YoY, led by 6% volume growth, including exports and 5% domestic volume growth (est. of +4.5%; highest in the past five quarters), selective price increases and product mix changes. EBITDA was up 3.7% YoY (est. of +19.6%) to INR2.11b, mainly because of higher A&P; YoY, while Adj. PAT was up 1.3% YoY (est. of +20.8% YoY) to INR1.26b. Toothpaste market share improved 60bp sequentially to 55.9%, while...
EBITDA/PAT below estimates; volumes appear bottoming out; awaiting EXIM revival Gateway Distriparks' (GDPL) reported EBITDA* (RAIL + CFS) of INR555m came in below our estimate of INR600m (-20% YoY, -2% QoQ), primarily due to lower-than-estimated EBITDA in the rail division. PAT (before associate/minority interests) of INR225m (+13% YoY, -7% QoQ) missed our estimate of INR274m. Difference at the PAT level increased due to higherthan-estimated tax rate of 35.6% (due to one-off). Rail volumes subdued, profitability impacted by continued EXIM imbalance Rail division reported EBITDA of INR323m (est. of INR358m; -19% YoY, -8% QoQ). Container volumes stood at 52,024TEU (est. of 52,300TEU; -5% YoY, +3% QoQ)....
Exports gaining traction; to drive growth irrespective of domestic scenario: Export at INR 96cr grew by 137% in 1QFY17 and constiituted 59% of the overall revenues, up from 42% in 1QFY16. Export revenues would continue to grow at a robust pace and keep increasing their share in revenue thereby reducing the company's dependence on the stagnant domestic market (domestic revenues declined by 22% during the quarter to INR 66cr (41% mix). Triveni is now focusing on getting closer to its clients by opening service centers in various geographies like UK, Dubai, Indonesia, SE Asia and LATAM. This should further strengthen Triveni's value proposition as clients would now...
