Buy

We attended Hindustan Aeronautics’ (HAL) Q2FY23 earnings call. Key highlights: 1) RoH and spares proportion to stay elevated till FY24E; 2) EBITDA margin is likely to stay at 26-27% owing to higher RoH revenue and cost efficiencies.

Biocon Limited’s (Biocon) Q2FY23 performance was ahead of our estimates led by
better than expected results in the generics and research services. Generics revenue was up 17.5% YoY to Rs6.2bn while Research services delivered a robust growth of 25.9% YoY to Rs.7.7bn.

Highlights from Q2FY23: (1) Non-cotton portfolio i.e. hybrid rice seeds, maize seeds, and vegetable seeds reported -94.7%, 10%, and 358% YoY revenue growth in Q2FY23, respectively, (2) Cotton business reported revenue steep decline of 34.2% in Q2FY23 largely due to volume decline of 38%.

Healthy operating performance; orderbook build up critical

Spike in fuel costs impact profitability; better days ahead

Muted quarter but outlook remains positive

Strong performance led by hospitality

We expect the company to post Revenues/EBITDA/APAT growth of 16%14/%/27%CAGR respectively over FY21-24E. We maintain a BUY rating on the KNRCL and value of the company at 17x FY24E EPS and HAM projects at 1.2x book value to arrive at a target price of Rs 330/share, implying an upside of 38%

We retain our BUY rating on the stock with a target price of Rs 485/share, implying an upside of 20% from the CMP.

We maintain our Buy rating on the stock with TP of Rs 190/share valuing the company at 18x its FY24 earnings.