CreditAccess Grameen: CreditAccess Grameen's (CREDAG) consolidated 4QFY21 PPOP growth (93% YoY) was above our expectations, largely on account of higher other income (direct assignment - INR0.9bn). Disbursements continued the strong momentum (42%/3% YoY/QoQ) with improving collection efficiency (~94% excluding arrears in March'21). CREDAG took accelerated write-offs of 9% (annualised), bringing down GS-III to 4.43% with aggregate ECL at 5%, in line with its conservative risk recognition and provisioning policy. We revise our FY22/FY23 earnings estimates downwards by 0.4%/3.0% due to expected moderation in loan growth and marginal higher credit costs. We maintain BUY with a revised TP of INR 813 (from INR 819 earlier). Our assigned multiple, we believe, is reflective of CREDAG's high RoE potential, relatively conservative approach to the business as well as inherent business risks. SRF: We retain our ADD rating on SRF with a target price of INR 7,300 on the back of (1) continued healthy performance from Speciality Chemicals business and Packging Films business, (2) recovery in the Technical Textile segment, (3) strong balance sheet, and (4) deployment of Capex towards high-growth Speciality Chemicals business over 3-4 years to tap the opportunities emerging from the agrochemical and pharmaceutical industry. EBITDA/APAT were 14/19% above estimates, owing to a 22% higher revenue. Sundram Fasteners: Sundram Fasteners (SF) 4QFY21 EBITDA was 10% above our estimates (as consolidated margins came in at 18.6%). The company reported healthy topline growth (+12% QoQ) as it benefitted from its diversified portfolio across domestic/overseas markets (exports are c.35% of revenue). We believe that SFs growth in FY22-23E will be...

Solid Balance Sheet, improving market share, diversified portfolio, strong FCFs and accelerated vaccination drive should support company's growth prospects further despite unprecedented challenges. Therefore, we reiterate our BUY rating on the stock with a revised...

Turnaround imminent; margin profile set to improve

Another stellar quarter led by chemicals & packaging ACCUMULATE SRF's 4QFY21 performance was significantly ahead of our and consensus estimates on the back of robust growth in Chemicals and Packaging segments. Consolidated Revenue/EBITDA/APAT grew by ~40%/~78%/~96% YoY in 4QFY21. Specialty Chemicals vertical grew by ~45% in FY21 as against management's guidance of ~25%. Strong demand from overseas markets and higher volume of key products from European clients aided this growth. While the management has guided for ~1015% growth in Specialty Chemicals in FY22, we believe that the lower number is a function of base effect and we do not expect demand moderation. Over the last three...

CEAT's reported revenue came ahead of our estimate (+13%) while EBITDA margin at 11.2% was a miss (-100bps.) Margin was affected by commodity cost headwinds (impact of 350bps QoQ). Only part of the commodity cost impact was absorbed (3% price hike) in 4QFY21 and a steep rise in commodity costs is expected in 1QFY22 too. We see serious pressure on margins over the next few quarters as the company is finding it difficult to hike prices in 1QFY22 due to competitive pressure and demand slowdown on account of the second covid wave. Normalization in OEM-replacement mix and rise in the share of T&B; tyres (as the capacity ramps up) will be incrementally negative for margins going forward. We do note that CEAT has...

Background: CEAT is one among the top four tire manufacturers in India and is a part of the RPG group. The company has a total manufacturing capacity of 0.1mn + tyres/day with plants situated in Nashik, Bhandup (Mumbai),Ambernath, Halol, Nagpur and Sri Lanka. The company manufactures all tires: Truck & Bus (33%), 2W/3W (30%), Passenger vehicles (13%), LCV (8%), Farm (9%), and Specialty (7%). In terms of market, replacement contributed 71% of the sales while OEM and exports make up 17% and 13% of the sales, respectively in 3QFY21. CEAT has a robust distribution network consisting of over 3,400+ dealers, 33 regional offices...

Hero MotoCorp (HMCL) reported a robust Q4FY21 performance. Total 2-W sales volume was at 15.68 lakh units, up 18% YoY, down 15% QoQ. Consequent net sales in Q4FY21 came in at | 8,686 crore, up 39.2% YoY but down 11.1% QoQ with blended ASPs at ~| 55,395/unit (up 4.6% QoQ). EBITDA margins were down 50 bps QoQ at 13.9%, with gross margins expanding 10 bps QoQ despite a spike in input costs over the past few months. PAT came in at | 865 crore, up 39.3% YoY. HMCL declared a final dividend of | 25/share for FY21 along with a special dividend of | 10/share....

CDSL: CDSL delivered a strong revenue performance (+19.7% QoQ), driven by transaction and online data charges (KYC) revenue. Key attributes that underscore our positive stance include (1) strong momentum in transaction revenue (+178% in FY21), driven by retail activity (online brokers) and pledge income; (2) continued gain in BO account market share (+770bps YoY to 60.7%); (3) sustained growth in annual issuer charges (annuity income), led by BO accounts addition and unlisted opportunity; (4) investment in technology for enhanced security; (5) high cash generation (OCF/EBITDA of 90%) and high net cash of INR 9.1bn (11% of MCap); and (6) +18/20% revenue/EBITDA CAGR over FY21-23E, following a strong FY21. Operating margin contracted 220bps QoQ to 59.9% (stood lower than the estimate) due to wage hike and higher investments in technology (cybersecurity). We increase our revenue estimates for FY22/23 by 10.9/12.8% and raise the target multiple to 35x (from 33x earlier). FY22/23E EPS increases by 8.5/10.1%. We value CDSL on an SoTP basis by assigning 35x to FY23E core profit and adding net cash to arrive at a target price of INR 870. The stock trades at a P/E of 34.1/29.3x FY22/23E EPS. Maintain BUY. L&T; Infotech: We maintain ADD on L&T; Infotech (LTI), following a strong 4Q (in-line revenue, better margins) and continuity in top quadrant growth ahead (only TELX is higher). LTIs growth profile has been the most consistent and its expected to continue, based on (1) net new large deal wins trajectory (26% growth in TCV in FY21) and consistent USD20mn+ net new wins, (2)...

Revenue slightly ahead of estimate; 4Q growth to be optically strong Gillette India's (GILL) 3QFY21 (June-ending FY) revenue grew by 32% YoY to Rs5.37bn (vs our est. 27.7% growth to Rs5.19bn) on a base of 12.7% decline. EBITDA grew by 74.8% YoY to Rs1.41bn (vs our est. 67.8% growth to Rs1.35bn). Adjusting for the one-time write-back of provision of ~Rs163mn (resulting from the settlement of certain tax disputes) included in other income, PAT grew by 70.6% YoY to Rs894mn (vs our est. 75.6% growth to Rs920mn). Given the resurgence of covid cases in the country followed by vertical lockdowns, we expect some adverse impact on the topline in the very near term. However, due to a lower base, topline would...

Revenue slightly ahead of estimate; 4Q growth to be optically strong Gillette India's (GILL) 3QFY21 (June-ending FY) revenue grew by 32% YoY to Rs5.37bn (vs our est. 27.7% growth to Rs5.19bn) on a base of 12.7% decline. EBITDA grew by 74.8% YoY to Rs1.41bn (vs our est. 67.8% growth to Rs1.35bn). Adjusting for the one-time write-back of provision of ~Rs163mn (resulting from the settlement of certain tax disputes) included in other income, PAT grew by 70.6% YoY to Rs894mn (vs our est. 75.6% growth to Rs920mn). Given the resurgence of covid cases in the country followed by vertical lockdowns, we expect some adverse impact on the topline in the very near term. However, due to a lower base, topline would...

SRF's 4QFY21 operating performance was robust on the back of margin expansion across segments (on a YoY basis). On a QoQ basis, EBIT margins have further moderated (-420bp QoQ) in the Packaging segment. SRF's performance over the last three years has been robust, with an earnings CAGR of 42% and stock price CAGR of ~34%. On the other hand, we expect the earnings momentum to slow to a 21% CAGR over FY2123, primarily due to a) margin contraction in the Packaging...

RBL Bank: RBL Bank's (RBK) 4QFY21 pre-provisioning profit (15% YoY) was higher than our expectations on account of higher income from recoveries, partially offset by softening NIMs (4.17%). Asset mobilisation remained muted (1% YoY), while deposits mobilisation (27% YoY) has gained traction. Asset quality woes continue for RBL Bank with slippages at ~10% (annualised), similar to Q3 levels (on pro-forma basis), and restructured pool at 1.7% of loans. With PCR at 52% and provisioning buffer nearly entirely drawn down, along with the second wave of pandemic, credit costs are likely to remain elevated for FY22 as well. Maintain REDUCE with revised TP of INR189. Godrej Properties: Godrej Properties (GPL) reported an operationally robust 4QFY21 with pre-sales volume of 4.2msf (16%/74% YoY/QoQ) and value of INR 26.3bn (10%/77% YoY/QoQ), on the back of seven new launches, which contributed INR 15bn of pre-sales during the quarter. With that, GPLs pre-sales value/volume growth stood at 14%/23% in a challenging FY21. Collections were also robust at INR 20bn during the quarter. Despite the second wave, we expect GPL to register growth in FY22, given (1) healthy balance sheet (-0.07x net D/E), which is further strengthened by the recent QIP, (2) robust launch pipeline (12.3 msf), and (3) strong brand recognition. However, we reiterate REDUCE, as all the positives are fairly priced in. We change our FY22/FY23 estimates by 41/11% and target price to INR 1,323/sh (earlier INR 1,353/sh) to account for the QIP.

We maintain Sell on Tata Chemicals Ltd (TTCH) based on marginal changes in estimates and 2.9% haircut in SOTP-based target price (TP) of Rs546 post the massive miss in 4QFY21 results due to one-off items hitting US and UK earnings. Long term outlook is positive based on management comments during the concall about demand returning to pre-Covid volume in all regions (including the troubled US business), The pressure on pricing outside India is likely to ease by 4QFY22 as quarterly contract prices are likely to be raised to align with market prices. We have modelled positives like improving long term outlook for demand growth in Soda Ash. However we have tempered pricing/margin estimates as annual US contract prices are down...

Alembic Pharma's (APL) 4QFY21 revenue at Rs12,804mn grew by 6.1% YoY but declined by 2.6% QoQ. Revenue came in 2% above our estimate and was in-line with consensus estimate. Revenue decline was due to a sequential decline in the US (down by 7% QoQ) and India (declined by 14.4% QoQ) businesses. The exUS generic business, which grew by 36% QoQ, helped offset the pressure on the topline. The decline in the US business was steeper than we had expected and was due to a decline in sartan portfolio sales. US sales stood at US$65mn and slipped below the earlier guidance of US$70mn as the base number for US sales. The company expects the pressure to sustain in the near term and the US quarterly...

RBL Bank (RBL) reported PAT of Rs753mn, 47% below our estimate. The miss on PAT was primarily on account of higher provisioning even though the operational performance was better than expected. Total net revenue grew by 4.8% YoY (7.2% QoQ), led by 37.5% YoY (18.8% QoQ) growth in non-interest revenue. In 4QFY21, the bank saw a substantial recovery in its core fee income, which grew by 40% YoY (33% QoQ). NII was down 11.3% YoY at Rs9bn on account of NIM compression (down 83bps YoY), which was affected due to income reversals. For FY22, the management has guided for a NIM of 4.75%, which we believe is likely to be the exit quarter guidance. With normalization of economic activity, we expect credit growth of 13-15% over...

Alembic Pharma's (APL) 4QFY21 revenue at Rs12,804mn grew by 6.1% YoY but declined by 2.6% QoQ. Revenue came in 2% above our estimate and was in-line with consensus estimate. Revenue decline was due to a sequential decline in the US (down by 7% QoQ) and India (declined by 14.4% QoQ) businesses. The exUS generic business, which grew by 36% QoQ, helped offset the pressure on the topline. The decline in the US business was steeper than we had expected and was due to a decline in sartan portfolio sales. US sales stood at US$65mn and slipped below the earlier guidance of US$70mn as the base number for US sales. The company expects the pressure to sustain in the near term and the US quarterly...

Tata Chemicals (TTCH)'s consolidated EBITDA came in below our estimates largely dragged down by North America (NA) and Europe due to the absence of operating leverage and one-time costs. In the last six months, TTCH has rallied ~126%, whereas the Nifty has appreciated by ~20%. This outperformance is largely attributable to its plans to enter into the Energy Science biz. (EV cell manufacturing) GOI has announced the PLI incentive for the EV Battery business, but plans are yet to be finalized (highlighted by the mgmt. during the 4QFY21 call)....

Supreme Industries: Supreme Industries (SIL) reported a strong 4QFY21, led by strong realisations and inventory gains. Consolidated net sales/EBITDA/APAT grew 13/27/44% QoQ (46/86/284% YoY) to INR 20.8/5.1/4.5bn respectively and EBITDAM came in at an all-time high of 24.5%. We like SIL for its steady growth, market share gains, lean working capital, and sustained high return ratios. We retain our ADD rating with a revised target price of INR 2,245 (19x Mar'23E consolidated EBITDA and 30% holding in Supreme Petrochem at 30% disc to current MCap). Reliance Industries: Our ADD rating on RIL with a price target of INR 2,285 /sh is premised on (1) induction of Facebook, Google, Intel and Qualcomm as partners in Jio Platforms, which should help the company accelerate the growth of digital connectivity and create value in the digital ecosystem through technology offerings; (2) recovery in refining and petchem businesses in FY22E; (3) the emergence of a clear path to a stronger balance sheet; and (4) stake sale in the retail business. Kotak Mahindra Bank: Kotak Mahindra Banks (KMB) 4QFY21 P&L; performance was better than our expectations, largely on the back of high other income (31% YoY), partially offset by lower-than-expected NII growth (8% YoY). The bank build on its uptick in credit growth in the last quarter with 4.5% sequential loan growth. Asset quality remains robust with FY21 slippages at 2.4%, along with a low restructured pool (0.19% of loans) and high provisioning buffer (PCR at 64%, other provisions at 2.1% of loans). However, current lofty valuations factor in the uptick...

Bajaj Auto is the world's sixth-largest manufacturer of motorcycles and the second-largest in India. It is also the world's largest three-wheeler manufacturer. The company is based in Pune, Mumbai with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttarakhand. Bajaj Auto...

We expect Biocon to witness long-term sustainable growth on the back of strong pipeline, new launches and increasing investments. We remain positive on the stock and reiterate our BUY rating with a revised target price of Rs. 430 based on 34x FY23E adj. EPS....