Broker Research reports: latest Downgrades
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We maintain BUY with SOTP-based TP of Rs 299/sh. Adoption of IND AS 115 had a negative impact on reserves of Rs 4.1bn. Revenue for 1QFY19 came in at Rs 7.0bn. Due to IND AS 115, revenue was higher by Rs 1.2bn. EBIDTA margins increased 293bps YoY to 25.7%. Interest cost increased 3.4% YoY to Rs 628mn. APAT came in at Rs 631mn. During 1QFY19, 2 real estate projects of 0.7mn sqft (BEL 0.6mn sqft share) were launched.
We had a meeting with the management of Cipla at the Institutional Equities Conference hosted by us last week. The key message we got from the management is that Cipla continues its efforts to get leaner as an organisation and is focused on prioritising its efforts and optimizing the product portfolio so as to be able to grow faster from now on. Following are the key takeaways from the meet: Exiting products in the US: Cipla will exit from products that are unprofitable in the US market after considering fully-loaded costs. The products that it is exiting garner US$30mn (includes about US$7mn already given up) in sales. These products account for around...
Lemon Tree Hotels reported a net profit of Rs22mn for 1QFY19, down 80.9% QoQ and up from a loss of Rs31mn in 1QFY18. The decline in earnings on QoQ basis was because of: 1) Decline in other income from Rs78mn in 4QFY18 to Rs19mn in 1QFY19. However, on YoY basis the company reported positive earnings on account of: 1) Rise in ARR (average revenue per room) from Rs3,373 in 1QFY18 to Rs3,899 in 1QFY19, up 15% YoY. 2) Rise in occupancy rate by 336bps to 76.8% in 1QFY19. Rise in ARR and occupancy rate led RevPar (Revenue Per Available Room) to increase by 19% to Rs2,994. 3) Addition of 678 rooms since 1QFY18. 572 rooms have been added under management contract and 106 rooms have been added under the owned and leased...
Subdued Performance on Cost Pressure & Dismal Realisation Led by subdued realisation and higher gas prices, Asian Granito India (AGIL) has reported a weak performance in 1QFY19, with its reported revenue growing by a moderate 6% YoY (+11% GST adjusted) to Rs2.4bn. EBITDA fell by 30% YoY and 44% QoQ to Rs204mn, while EBITDA margin contracted by 445bps YoY and 71bps QoQ to 8.6%. While sales volume grew by a strong 23% YoY (-35% QoQ) to 8msm, a substantial 14% YoY and 6% QoQ decline in blended realisation to ~Rs298/sm along with ~16% YoY jump in gas prices dragged its quarterly operating performance. Further, 2QFY19 performance is also expected to be affected by transport strike...
Uflex Ltd. reported a good set of numbers in Q1FY19. Sales for the quarter increase by 17.4% YoY to Rs 1904.9 Cr. During the quarter, the company witnessed a strong overall sales volume growth of 14.9% YoY, with packaging business volumes growing 11% and film volumes growing at 15.9% YoY. The management has maintained its guidance for double digit overall sales volumes growth in FY19 with improved margins of 15%, given the stability in crude prices. EBITDA margins saw a dip from 14.3% in Q1FY18 to 13% in Q1FY19 and remained flat on a QoQ basis. The negative impact on EBITDA margins was primarily...
Mixed bag Revenue growth robust; margins disappoint Revenue from operations for the company grew by 34% YoY to Rs. 778 Cr vs Rs. 582 Cr in Q1FY18 and Rs. 721 Cr in Q4FY18 (up 8%). EBITDA stood at Rs. 73.1 Cr as against Rs. 44.3 Cr same time last year (growth of 65%) and Rs. 81.8 Cr sequentially. MCL witnessed 180 bps EBITDA margin expansion YoY at 9.4% for the quarter, however it declined by 200 bps on sequential basis on the back of a steep increase in raw material costs. Net profit came at Rs. 37.6 Cr vs Rs. 24.6 Cr same time last year, growth of 53%....
We value the stock Rs. 289(20xFY20E EPS) vs 296 earlier. Maintain BUY Suprajit Engineering (SEL) consol EBITDA and PAT numbers were slightly below estimates in 1Q. Net sales at Rs. 3.6bn (+12% YoY) led by 19% growth in core automotive cable business, offset by muted growth in Phoenix (+4% YoY) and Wescon business(+4% YoY). Consol EBITDA rose 21% YoY at Rs. 554mn with margin at 15.3% (+107bps YoY/-275 bps QoQ).
With a revised TP of 495 (24x on FY20E EPS), we maintain BUY. Cadila (CDH) continues to be at pace with double-digit YoY growth which started in 2QFY18. In 1QFY19, CDH reported revenue at Rs 28.9bn showing a growth of 32%YoY. EBITDA at Rs 6.4bn and PAT at Rs 4.6bn were up 133% and 233% YoY respectively. EBITDA margin came in at 22.3%, improving ~1000bpsYoY. This growth was primarily driven by the US and India businesses which were up 27% and 40% YoY respectively. Other major segments including LATAM and ROW markets and consumer wellness, animal health, and API businesses also saw double digit growth.
Maintain BUY with a revised TP of Rs 691 (18x FY20E and Rs 135/sh for pipeline). Glenmark pharma (GNP) reported a decent set of numbers in its 1QFY19 results. Revenue at Rs 21.3bn was down 8.6%YoY and 5.3%QoQ. EBITDA margin at 14.6% declined 880bps YoY but recovered 150bpsQoQ. PAT at Rs 2.2bn was reduced by 31.6%YoY but showed a strong sequential growth of 47.4%. These numbers are not comparable on a YoY basis because GNP had launched Ezetimibe (generic Zetia) with its partner Endo in December 2016, and had exclusivity on the product.
Maintain BUY with a TP of Rs 375 based on 16x FY20 EPS. Sonata delivered a decent quarter with slight miss on revenue but margin beat was a positive surprise. International IT services (IITS) revenue was up 1.1% QoQ (+3.0% CC) to USD 37.8mn, below our estimate of USD 38.5mn. IITS margin jumped to 22.2% (vs. our est. of 20.0%) due to higher IP-led revenue (+5.6% QoQ and 82% of incremental rev). The company is witnessing increased traction on the Microsoft Dynamic AX (Cloud ERP platform) and is a preferred ISV development center partner for Microsoft.
We maintain BUY with SOTP based TP of Rs 436/sh. SADE 1QFY19 net revenues at Rs 9.1bn was 11.0% below our estimates. EBITDA at Rs 1.1bn was 9.1% below our estimates, with EBITDA margin expansion of 43.9bps YoY to 11.7%. Increased mining equipment leasing/interest on subcontractor advances/FDR interest income contributed to 76% YoY increase in other income resulting in PAT of Rs 634mn, 20.1% above estimates.
The India Cements (ICEM) reported weak operating performance for 1QFY19 because of the sustained fall in realisation. Cement volume continued to pick up with 15.8% YoY growth at 3.08mnmt (above our estimate of 3.0mnmt). However, realisation continued to decline 10.3% YoY/2.5%QoQ to Rs4,323/tn (below our estimate of Rs4,323/tn). Effectively, revenues grew only ~5% YoY to ~Rs13.6bn (in line with our estimate of ~Rs13.8bn). Operating costs decreased ~5.4% YoY/2.6% QoQ to Rs3,917/tn because of savings in logistics cost and other expenditure. Limited pass-through because of weakness in key ICEM markets led to EBITDA margin compression of 326bps YoY to 11.5% YoY. Effectively, EBITDA/tn stood at Rs510/tn, down...
Dalmia Bharat Enterprises (DBEL) reported a steady performance in 1QFY19 backed by YoY double-digit volume growth. Volume grew ~13% YoY to 4.51mnmt (below our estimate 4.67mnmt), contributed by its key markets. Realisation, however, fell ~4.8% YoY/flat QoQ to Rs4,881/tn on account of weak pricing in the southern/eastern region. Overall revenues grew ~16% YoY to ~Rs23.7bn. Additionally, operating costs increased ~10% YoY to Rs4,088/tn (5% above our estimate) contributed by higher raw material and energy costs, and also other expenses. Effectively, EBITDA declined ~6% YoY to Rs5.24bn versus ~Rs5.6bn in 1QFY18 (above our estimate of ~Rs4.9bn). EBITDA/tn stood flat at Rs1,135 versus Rs1,333 as cost inflation and weak...
ff Acquisition: CDH has acquired 51% stake in Dehradun-based Windlas Healthcare, which gives access to a USFDA-approved facility (oral solid; plain vanilla and niche products). CDH expects this facility to help in commercialisation of 20-30 products over next 2-3 years,...
NBCC has reported a mixed performance in 1QFY19. While its revenue witnessed a significant ~45% YoY growth (GST adjusted), EBITDA declined by 7% YoY and 67% QoQ to Rs547mn (significantly lower than our estimate) and EBITDA margin fell by 131bps YoY and 435bps QoQ to 3.4%. Execution of low-margin works and unbilled revenue were the prime reasons for dismal margins, which the management expects to improve in subsequent quarters. Net profit grew by 21% YoY (-52% QoQ) to Rs677mn mainly supported by 79% YoY growth in other income. While current order book at Rs800bn continues to look impressive, Rs350bn of order backlog is under execution phase. Order inflow for 1QFY19 stood at Rs40bn and NBCC expects to add...
Tata Steel reported a steady set of operational Q1FY19 numbers. Indian operations reported sales volume of 2.97 million tonnes (MT) (up 8% YoY, down 2% QoQ) marginally lower than our estimate of 3.1 MT. European operations reported steel sales of 2.45 MT (up 1% YoY, down 5% QoQ) broadly in line with our estimate of 2.4 MT The consolidated topline came in at | 37833 crore (up 28% YoY, 5% QoQ). EBITDA/tonne of domestic operations were at | 17078/tonne (vs. Q4FY18:| 15872/tonne, Q1FY18:| 10786/tonne), marginally higher...
ICICI Securities Ltd | Retail Equity Research Coal India's Q1FY19 numbers were higher than our estimates on all fronts. The sales volume came in at 153.4 million tonne (MT) (up 11.7% YoY), wherein blended realisations were at | 1476/tonne (up ~10% YoY). Fuel supply agreement (FSA) sales volumes came in at 130.4 MT (up 21.7% YoY) while FSA realisations during the quarter were at | 1313/tonne (up 9.3% YoY). E-auction volumes came in at 19.4 MT (down steeply by ~29% YoY). However, e-auction...
ICICI Securities Ltd | Retail Equity Research Greaves Cotton's (GCL) reported revenues came in at | 458.2 crore, up 12.8% YoY nearly in line with our estimates of | 461.4 crore. The engine segment revenues came in at | 433.4 crore, down 1.3% while other segment revenues were at | 24.8 crore, up 66.3% During Q1FY19, EBITDA came in at | 60.9 crore, up 10.1% YoY (vs. our estimate: | 66.6 crore). EBITDA margins came in at 13.3%, down marginally by 30 bps YoY. Hence, it was below our estimate of...
