Avenue Supermarts (DMART) reported below expected result on EBITDA and PAT front. This was largely due to higher than expected other expense and effective tax rate. Expansion in gross margin and healthy store addition rate were the key positives in the result. DMART is on track to achieve its FY20E aggressive guidance on store addition with no signs of slowdown. We expect DMART to add 27 stores in FY20E. Miss in EBITDA and PAT estimates is more of accounting-miss than structural. We continue to maintain our thesis on DMART as a secular play on value migration in India. Huge scope of penetration and superior business model should help DMART to win market share....

Infosys' (INFO) Q2FY20 result met our forecast across all parameters. Revenue grew by 3.3% QoQ in CC vs. our forecast of +3.7%, EBIT margin improved by ~120bps QoQ to 21.7% vs. our forecast of 21.6% and EPS of Rs9.5, -7.1% QoQ and unchanged YoY was also in-line with our forecast of Rs9.7. Digital services (38.3% of revenue) continued to drive INFO's growth and grew by +10.7%/+38.4% QoQ/YoY. Large deal win TCV hit an all-time high of US$2.85 bn, though...

although sales and PAT missed our and street estimates. D'Mart growth strategy remains on track led by 1) steady pace of store openings with 13 stores added in 1H (added 21 stores in FY19 and average of 22 stores in past 4 years) 2) scaling up of D'Mart ready model from 58 locations in FY19 3) ramp up in young clusters like Punjab, Tamil Nadu, Rajasthan, NCR and MP and 4)...

Infosys reported a decent quarter with inline performance on revenues & margins. Infosys narrowed their guidance band (8.5%-10% CC) to (9-10% CC) inline with our expectations. Infosys reported revenue growth of 3.3% CC QoQ (Ple: 3.5%, Cons:3.6%) & organic cc growth stood at 2.4% CC QoQ slightly lower than our estimates of 2.6% CC QoQ. EBIT margin was inline with our estimates at 21.7% (Ple:21.6%, Cons: 21.4%) aided by increase in utilization, cost optimization, lower visa cost & travel costs....

12 October 2019 Out of the 12 observations issued in the form 483 by the USFDA, one is related to cleaning/maintenance of equipment, wherein procedures lack provision for routine cleaning of inlet/outlet duct areas. One more observation is related to systems being deficient for maintaining equipment used to control aseptic condition. In fact, all inspections, except at the Goa site, are now classified as VAI (voluntary action indicated) or NAI (no action indicated), implying a minimal regulatory risk at these sites. Note that the Bangalore site was recently inspected in Jun19 and issued a form 483 with seven observations, which was now followed by the Goa site inspection. However, a higher quantum of sales from this site can be shifted to other sites in case the regulatory situation worsens at Goa. Moreover, while the company is implementing remediation measures, there are low single-digit ANDAs pending for approval from this site over the next 12-15 months, implying a minimal impact on future growth as well.

TCS' trinity of growth', scale and durability is challenged and we find our conviction displaced. While multiple attributes of scale/durability (offshore-leverage in digital, attrition) remain intact, the impact of macros and client specifics across core verticals dent the growth outlook. We expect USD rev/EPS CAGR of 8.2/7.7% over FY19-22E, factoring USD rev growth of 6.3/9.0/9.4% for FY20/21/22E. In its downward drift however, strong payout policy (80-100% of FCF) and industry-leading margins/RoIC offer respite to valuations. We downgrade TCS to NEUTRAL (BUY earlier) and strike it off our list of conviction picks following ~4% EPS cut and a weak growth trajectory (core verticals/ deceleration in digital). Our TP is Rs 1,975 at 20x Sep-21E (24x earlier).

IndusInd Bank reported muted operating performance during Q2FY20 on a sequential basis (YoY numbers are not comparable due to Bharat Financial merger). Weak PPoP growth and higher provisions leading to sequential decline of 2% in consolidated (IIB + Bharat Financial) net profit to Rs 1,433 cr. NII of the bank grew marginally by 2% QoQ to Rs 2,844 cr vs. our estimate of Rs 2,952 cr. Soft growth in NII and other income leading to lower PPOP growth of 1% sequentially. Due to accelerated provisioning of Rs 355 cr, PCR of the bank jumped to 50% vs. 43% QoQ...

On the customer front, for products, company is concentrating on aims to keep customers abreast of new season launches and engage them with offers such as (a) priority for EOSS (end of season sale), (b) exclusive discounts, and (c) co-branded credit cards. The First Citizen program has resulted in an increase in SHOPs sales mix and average bill size of customers. program for premium customers is also gaining traction with an increase in the bill size. With an aim to increase revenue contribution to 15% (13.6% currently) from the Personal Shopper initiative, management is planning to boost the strength of its existing personal shoppers force from 250 heads to 300 heads. SHOP aims to increase Private Label contribution to 15-20% over the next 3-4 years from 13% currently. Improving mix of margin-accretive Private labels, Beauty segment contribution along with higher SSSG should improve SHOPs EBITDA margin.

24%(Ple:25.6%, Cons:25.3%). BFSI & Retail contributes to 46% of the total revenues and are showing signs of weakness. We believe manufacturing (10% of total revs) weakness is yet to be seen as globally all the manufacturing PMI's are lowest in last 10 years. (The U.S. manufacturing PMI came in at 47.8% in Sept, the lowest since June 2009.) Digital growth slowed down in Q2FY20 to just 3.7% QoQ compared to average 8.8% QoQ in last 4 quarters. Despite of strong order booking of US$6.4bn, TCS management remained pessimistic about growth revival in 2HFY20. We note that 2H is...

We attended BHFC's analyst meet. The management acknowledged short- Change in Estimates | Target | Reco term challenges in domestic CV industry as recovery in CV volumes expected only by 2HFY21 as well as weak auto exports as US and Europe heavy truck...

TCS's Q2FY20 revenue growth of 0.6% QoQ in US$ (~1.2% in CC) was a miss to our forecast of 2.5% QoQ in US$ (3.1% in CC). Lower revenue growth and increased hiring impacted EBIT margin which declined by 15bps QoQ to 24% vs. our forecast of 25.1%. Similarly, EPS of Rs21.4, -1.1%/+3.9% QoQ/YoY missed to our forecast. Digital business (33.2% of revenue) continued to lead TCS's growth and grew by 28% YoY in CC, though lower than previous quarters. Deal wins remained strong with TCV of US$6.4 bn which is the highest in the last 6 quarters. We factor Q2FY20 miss and cut our FY20/21E revenue by 2.5%/2.8% and EPS by...

Revenue growth in both BFSI (8% YoY CC) and Retail (4.8% YoY CC) decelerated by 120bp+ compared to the previous quarter. BFSI growth decelerated to 8.0% YoY CC from 9.2% in the previous quarter, led by pockets of weakness in the large banks in Europe and capital markets in the US. Margin weakness was due to currency pressure, lower revenue growth and highest headcount addition in the quarter. Given the uncertain outlook on the major verticals (BFSI/Retail), combined with the operational blip in a seasonally strong quarter, we expect USD revenue growth to taper off by 170bp/40bp in FY20/21. TCS 2QFY20 EBIT margin shrank 250bp QoQ to 24% - the contraction is largely led by a dip in utilization and no benefits from currency which the company had anticipated.

10 October 2019 Automobiles JLRs wholesale volumes were flat YoY (+34% MoM) at 53k units (our 4% YoY). JLRs retail volumes declined by ~0.5% YoY, as the recovery in China (+18% YoY) was offset by the decline in the UK (-6.5% YoY) and RoW (-13% YoY). China witnessed the third consecutive month of a recovery in volumes. Jaguars retail volumes declined ~15% YoY, led by a decrease in sales for all models, except I-Pace. LRs retail volumes grew ~7% YoY, driven by the ramp-up of new Evoque (+51%), RR (+11%) and RR Sport (+31%). Against challenging market headwinds, for the third consecutive month we have achieved double-digit growth in China, benefitting from our local turnaround plan and performing ahead of the broader market. Despite these negative market trends, Land Rover sales saw year-on-year growth in the quarter. A comprehensively updated and well-received new Discovery Sport will support this positive development in the months to come.

However, we now believe that JUBI will be among the key beneficiaries of the cut in corporate tax to 25.2%, as it adds around 13% to its PAT. On the third factor, the corporate tax cuts provide an opportunity to JUBI to offer discounts and promotions and thus eat into the share of unorganized players. It can spend a significant part of the INR450-500m incremental PAT on promotions/price offs in an attempt to gain market share. Four points are competitors would have such windfall gains, and if they choose to match JUBIs efforts on promotions and price offs, they would end up bleeding further. corporate tax cuts offer multi-year benefits to JUBI, providing it with incremental benefit every year until competitors scale up well. Aggression in terms of price cuts/promotional spends if judicial will also drive faster conversion of customers from other restaurant businesses to Dominos.

M&M; (MM) and Ford Motor company (Ford) have formed 51:49 JV (that will Change in Estimates | Target | Reco develop, market and distribute Ford brand vehicles in India and Ford & Mahindra brand vehicles in exports markets) by expanding two-year old...

000 TPA. In anticipation of the accelerating demand for ATBS, VOL decided to increase its existing ATBS TBS capacity to 40000 TPA by September 2019, however, due to delays it is expected to be completed by November. The rising demand for ATBS and withdrawal of Lubrizol from the ATBS...