We attended the HDFC Life's technology day showcasing key enablers of end to end journeys at both in the background and at the front end. Overall experience has been quite impressive with strong adoption of technology...

By segment, India (Rx + Gx) revenue grew 6.1% YoY, supported by strong recovery in generic business (~61% QoQ) and growth across both chronic and acute therapies under branded business (~13% YoY). North America business rose 25.7% YoY, where Cipla maintained its market share despite the price erosion of its key product Sensipar, due to higher competition. We expect that any further dip in price will be offset by recently launched generic Pregabalin and Daptomycin. SAGA business grew (~12% YoY in local currency), while private market grew more than 3x vs. market to drive ~13% YoY. Emerging market revenue though down 4.4% on YoY basis, surged 61.6%...

After four consecutive quarters of de-growth, Maruti Suzuki Ltd (MSIL) witnessed marginal growth with the onset of festivities in October 2019. MSIL posted 1% growth between October and November 2019 and also corrected excess inventory (current channel stock is less than one month). MSIL raised production (4% increase) in the month of November 2019 after a gap of 9 months. While the worst is over for MSIL, we believe that sustained recovery would still take time. Weak economic growth along with price increases on account of transition...

11 December 2019 HDFCLIFE has been making significant efforts to build its digital edge which is enabling it to raise the servicing benchmarks and delight customers/other stakeholders. This is also helping it attract more channel partners and deliver sustainable business growth, ahead of its peers. HDFCLIFE has maintained strong momentum in business growth while improving the business mix (toward non-par products), driving a sharp improvement in the VNB margin. The company continues seeing significant potential in the annuity/protection business which will help sustain growth momentum and drive profitability. HDFC Life Insurance HDFCLIFEs key focus remains on innovation to build a value proposition and enhance customer satisfaction throughout the customer journey. Over time, the ideology of life insurance companies has changed from being a product factory to becoming customer centric, and thus innovation is the key to create a moat in the business.

Bajaj Auto Ltd (BAL) is expected to outpace the 2W industry growth in a challenging demand environment. Domestic 2W industry growth is expected to remain under pressure over the next three to four quarters due to huge cost increases on account of transition from BS4 emission norms to BS6 emission norms. Amongst listed players, BAL would be the least impacted by the transition due to lower inventory, higher share of exports (which are immune to BS6 Norm change) and higher share of premium bikes which would see a relatively lower cost...

The company has a strong brand equity mainly in Gujarat. Shalby has witnessed significant growth in volumes across its hospital network. Arthroplasty continues to dominate its revenue pie although it has been witnessing greater traction in other specialities as well. Leverage free balance sheet, strong margins and continuous generation of free cash flows also provide additional cushion in a capex heavy industry. However, margins are still skewed towered the top two hospitals. We initiate Shalby with HOLD recommendation mainly due to high concentration risk. We value...

HCG operates one of the largest private cancer care networks in India with end-to-end solutions available under single corporate entity. This consisted of 21 comprehensive cancer centres that provide a single point destination for complete cancer care. Most centres are on lease or rental basis with some in partnership with local doctors or hospitals. Owing to exclusive agreement with vendors, HCG procures equipment on a deferred payment basis. We expect revenues from the HCG centres to grow at 16.2% CAGR to...

Robust Q2FY20 impacted by huge one-off loss Bharti Airtel Limited is a leading global telecommunications company with operations in 18 countries across Asia and Africa. The company had over...

Financial Products Spandana Sphoorty Financial Ltd (Spandana) is a rural focused Micro-Finance Institution with a pan India presence. It mainly focuses on Abhilasha' loans whose primary objective is to empower women in setting up and expanding income generating activities, smoothen household cash flows and acquire productive assets. For its income generation loans, it presently focus on areas such as agriculture,...

Volume growth revival; Faster growing parts return accretive We had a meeting with Bata India (BIL) management recently to understand its 1HFY20 performance in greater detail as well as status of its various initiatives to drive revenue growth and margins. The key takeaways from the meeting were: (1) After many years of stagnant volume due to defocus on lower priced SKUs, volume has grown at 8% in 1HFY20 (5% in 2Q). This has been driven by increased momentum in the wholesale business growing ~18% in 1HFY20. Unlike revenue in last many years, which was driven by average selling price (ASP) growth, we believe from here on, there is going be a better mix of volume and ASP growth. This move has been in line with the strategy of...

Assuming Rs25-30 hike in ARPU, it translates to incremental EBIDTA of Rs85100bn. Reliance JIO has launched All-in-One Plans' with higher tariffs following hikes by Vodafone and Airtel. After three years of severe tariff war, price hikes are welcome and we expect further hikes going forward. We increase RJIO's ARPU assumptions for FY21-22E to Rs 170 /180 vis--vis FY20 rate of Rs130....

However, the expected revival in tractor demand (on the back of healthy monsoons) will partially offset the impact from the above. We would advise investors to turn constructive on the stock after further clarity emerges on BSVI/favorable market responses to new launches. We reinstate coverage on Mahindra & Mahindra (M&M;) with a NEUTRAL and a SOTP based Sep-21 TP of Rs 570. After outperforming the PV industry over the past decade, we expect growth rates for SUVs to converge. Further, as competition remains intense, M&M;s automotive segment margins are expected to remain under pressure.

We think that Kotak Mahindra Bank's (KMB) valuation (3.6x 1HFY22E BV) reflects, amongst other qualities, its superior risk-adjusted margin. Our analysis across key peers reveals that KMB's risk-adjusted margin, at 3.65-3.70%, is at par with HDFC Bank (HDFCBK). Even during the most testing times, the bank's asset quality has held up very well, which has also helped the bank to maintain low credit costs through the cycle (10-year avg: 61bps). Liability franchise management has been excellent. Despite reducing overall cost of deposits by ~220bps over the last 6 years, CASA ratio has expanded substantially, to 52.5% (FY19). A strong balance sheet (low NPAs + strong CAR), supported by an enviable...

In addition to large capacity addition in lieu of higher IMO-led diesel demand, Chinese teapot refineries have ramped up their utilization rates (~67% vis--vis 61% in Oct-Nov18) as the country increased crude oil import More importantly, with IMO less than a month away, the forward curve for diesel depicts an incapacitated scenario of a mere USD14-16/bbl, as against consensus estimate of USD25-30/bbl. MRPL suffered refinery shutdowns in 1HFY20, leading to lower utilization (6.2mmt in 1HFY20 v/s 7.8mmt in 1HFY19) and poor GRM (USD0.13/bbl in In 1QFY20, water scarcity in Mangalore led to a major forced shutdown of 75 days. Nevertheless, in 2QFY20, MRPL faced another (precautionary) shutdown of the phase-III units after intensified monsoon caused landslide in Dakshina Given subdued global oil demand and incremental capacity addition, GRMs will likely remain suppressed for a few more months. Originally, it was expected that the INR150b phase-III expansion would generate ~USD8/bbl of GRM when SG GRM is at USD6/bbl.

HCL Tech made an announcement on bonus shares along with its Q2FY20 results on October 23, 2019. The ratio was one bonus share for every existing equity share held i.e. 1:1. The record date for the same is December 7, 2019 while the ex-date for the same is today i.e. December 5, 2019. Consequently, HCLT's share price, as per yesterday's closing price, has dropped to | 563/share from | 1126/share. Currently, the stock is trading at | 563/share. Our target price also stands revised to | 600/share from...

Siemens India, a flagship company of Siemens AG (Germany), is an integrated technology provider and a leading powerhouse in electronics and electrical engineering. Siemens is strongly placed in Energy and Infrastructure...

Continued weakness in crude oil impacts performance Standalone revenues declined 12.5% YoY to Rs. 24,493cr in Q2FY20, impacted by lower crude oil volumes and pricing. Crude oil prices fell 17.0% YoY to USD 60.3/bbl (-9.0% QoQ), while crude oil production volumes declined 3.9% YoY to 5.8t and sales volumes fell 1.2% YoY to 5.4mt. Overall revenue from offshore facilities dropped 15.8% YoY to Rs. 16,014cr, while onshore facilities revenue declined 5.5% YoY to Rs. 8,479cr. EBITDA was down 14.8% YoY to Rs. 14,377cr as EBITDA margin contracted ~160bps YoY to 58.7% due to higher material costs. PAT of Rs. 6,263cr (-24.2% YoY)...

Grasim Industries Limited's (Grasim) stock has risen by ~10% over the fortnight, led by two key developments in the telecom sector affecting VIL (Grasim holds 11.6%). Firstly, the government provided benefit of Rs. 23,920 crore to VIL through deferment of spectrum payment for FY2021FY2022. However, the Committee of Secretaries (CoS) set up to suggest relief measures for the telecom sector has been disbanded, which has put expectations of further relief in abeyance as of now. Secondly, the three major players in telecom have decided upon tariff hike from December 2019, which is seen as a sign of bottoming out of ARPUs for...

In the plywood business, GIL's market share was at 26% of the | 4,500 crore organised plywood market (total plywood industry size: ~| 19,000 crore) with a pan-India network of 1,870 distributors/stockists, 6,000 retailers serviced by 27 branches. Currently, its product portfolio consists of 64%, 36% premium, mid-to-low segment plywood in volume terms (72%, 28% in value terms), respectively. To gain market share by increasing presence in the mid-to-low segment, GIL had earlier launched plywood under Bharosa & Jansathi brands. Going ahead, the management is aiming at premium, mid...

Cadila Healthcare is India's leading vertically integrated pharmaceutical company. With its presence across the value chain, it manufactures finished dosage forms, active pharmaceutical ingredients, animal healthcare...