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Engineers India (EIL) reported a rather subdued quarter with a 25% decline in revenues; and decline in EBITDA margin (aided by decline in consultancy margins) – resulting in a 52% decline in profit (PAT).

across all three segments General staffing grew 10% QoQ, Specialized staffing services grew 17% QoQ and Other HR Services grew 13% QoQ. Net head-account addition was strong in BFSI, Consumer, e-commerce, and tele tech cohorts, while sectors which were worst affected by the pandemic are making a comeback. Consolidated EBIT margin came at 1.5%, was flat QoQ...

Mold-tek packaging's (MPL) Q4FY21 result was better than our estimates on key parameters. Strong sales volume growth and higher NSR (on account of increased raw material prices) supported net sales, while higher share of IML products in total volume led to EBITDA margin expansion. Net sales increased by 51.2% YoY to Rs1,610mn, while EBITDA came in at Rs320mn, higher by 75% YoY. The company reported net profit of Rs181mn, growth of 106.1% over Q4FY20. The management remained confident to keep the earnings growth momentum once pandemic situation comes under control. Second wave of Covid-19 has dented product off-take owing to statewide lockdown,...

Orient Paper and Industries Ltd (OPIL) reported another weak quarterly result, marred by subdued demand due to nationwide lockdown amid Covid-19. The company reported net sales of Rs806mn, down by 46.2% YoY. Negative operating leverage weighed on EBITDA at negative Rs161mn, while net loss stood at Rs174mn. Our interaction with the management suggests that writing and printing paper demand is still subdued in Q2 and there is no improvement in net sales realization as well. On a positive note, OPIL has forayed into copier paper, which should partially support sales volume going forward. The company has taken stringent cost cutting measures across the cost verticals, which would aid OPIL to tide...

Companies like Larsen & Toubro and KEC with exposure to the Middle East and North Africa (MENA) region are expected to get impacted by the recent more than 60% fall in crude oil prices to US$22/barrel. This is expected to impact overall orders/awarding from the MENA region. Companies like Elgi Equipments, AIA Engineering, Thermax, Engineers India and Kalpataru Power with exposure to international geographies like Europe, Middle East, China for sales or essential raw material may get impacted. However, lockdowns in India, UK, Europe and other geographies due to Covid-19 are...

In our midcap universe of 11 companies, we expect Tata Chemical, VA Tech Wabag, Emmbi Industries and Kanpur Plastipack to be the most impacted stocks given that all these have revenue contribution in excess of 30-35% from the said geographies. We have envisaged the impact of Coronavirus (Covid-19) on our midcap coverage universe based on the revenue contribution from both the US as...

Sandesh has witnessed a muted print segment in the last year and a half. While FY20 print revenues declined 1%, the H1FY20 overall revenues declined ~17%. We also highlight that print, as a segment, has witnessed challenging times with weak ad growth. During FY19, key players like DB Corp and Jagran Prakashan reported print revenues (ad + subscription) growth of 6% and 1%, respectively, which for H1FY20 has been a decline of ~6% and 3%, respectively. The segment is likely to continue its declining trend at least in the medium term with key categories like government and...

Although the company's revenues have grown at 12.1% CAGR in FY16-19, we believe majority of growth is from acquisition. We believe the organic growth has been below 5% in FY16-19 mainly due to the subdued performance of the content solution business. The content solution business (accounts for 64% of total topline) has declined at 3.2% CAGR in FY17-19. In addition, the market in which MPS operates is fragmented and publishing outsourcing vendors are not price settlers but are compensated by volumes, which also keep revenue growth under check. Further, higher client...

Essel Propack (EPL) reported flattish topline (down ~9% QoQ) led by poor performance in AMESA and EAP regions (mainly India and China respectively). While India demand slowdown due to macro headwinds, the Chinese revenue slowdown was largely due to ongoing US-China trade issues. Despite significant rise in the contribution of non oral care to topline (up from 40.7% in Q1FY19 to 46.6% in Q1FY20) the EBITDA margin was under pressure mainly due to sharp decline in the profitability of the AMESA regions. We believe, the lumpiness of domestic business coupled with...

Sector: Auto Ancillaries /Mid-Cap | Earnings Update 4QFY19 Background: Balkrishna Industries (BIL) is focused solely on 'off-highway' tyres catering to agricultural & industrial segments. The company has a ~7% share of the global market. While OTR forms ~65% of the global market, for BIL, it only contributes ~33% to its revenue. The company has been undertaking various actions like setting up warehouses in markets in North America and Europe to be closer to the customer and have a just in time (JIT) system. The company sales to over 130 countries through...

Ester Industries (Ester) reported a healthy Q4FY18 performance. Net sales for the quarter were at | 220 crore, up 11.7% YoY. EBITDA in Q4FY18 was at | 22.7 crore with corresponding EBITDA margin of 10.3%. Consequent PAT in Q4FY18 was at | 5.6 crore. Q4FY18 marks a turnaround quarter resurfacing double digit EBITDA margins, best in the last 10 quarters. PAT of ~| 6 crore is also the highest in the last 12 quarters. However, the management has revised its downward its guidance in the quite essential speciality polymer segment, which was the key driver of growth for Ester...

provide for any potential acquisition opportunities that may be available bhupendra.tiwary@icicisecurities.com in the course of business. However, the argument seems unconvincing as the company has failed to attract investors' attention. In addition, the English segment's ad growth continues to be elusive. We assign a SELL rating to the stock valuing it at 10x FY19E EPS of | 7.8, with a revised target price of | 78. We highlight that any multiple re-rating can only happen post clarity on the cash allocation or if there is a marked...

Essel Propack Ltd. (Essel) declared its Q1FY17 results recently. 1. The company had a break through invention Mystik, which is an innovative tube solution on laminate platform with a novel multi-functional...

Aggressive Capex on Multi-layered Paper board: Rs 15 bn capex on multi-layered paper board with capacity of 2 Lakh tonnes which is estimated to come on stream at the beginning of FY17E and is expected to boost the topline but expected low capacity utilization, high depreciation and interest costs are expected to put pressure on bottomline. New capacities from other players that are likely to be commissioned in FY16E could weaken the net realizations.