Q3FY20 witnessed weakness in Zinc prices, and decline in production activities. However, we expect recovery in the last quarter and maintained our HOLD rating on the stock with a revised target price of Rs. 228 based on 11x FY22E P/E. Production challenges weigh on Q3 performance In Q3FY20, revenue from operations fell 15.7% YoY to Rs. 4,672 cr mainly due to weaker revenue from Zinc (-17.6% YoY, 67.7% of total revenue), and Lead (-21.1% YoY, 14.0%), partially offset by slight improvements in Silver (1.9% YoY, 14.8%). Zinc...

PNB Housing Finance (PNBHF) reported 3QFY20 results with the key pointers being: (1) Asset quality deteriorated with Stage 3 assets ratio at 1.75% (+128bps YoY, +91bps QoQ) (2) Capital raise expected in Q4FY20; Clarity regarding PNB's status and shareholding (3) Loan book declined 7% YoY and 2% QoQ at Rs692bn; AUM was up 8% YoY, down 4% QoQ (4) NIM declined 8bps YoY, 21bps owing to 3 bps decline in yield and flat cost of borrowing (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, PNBHF posted 3% YoY NII growth at Rs5,721mn, PPOP growth of 6% YoY at Rs4,777mn and PAT decline of 12% YoY at Rs3,421mn. We have revised our estimates for FY20/FY21/FY22...

Indoco Remedies' (IRL) 3QFY20 revenue at Rs2,894mn is up 14.3% YoY (down 1.1% QoQ) and is higher than our/consensus estimate by 2.2%/0.1%, respectively. Net profit stood at Rs91mn (16.6% above expectation). Revenue growth was led by the domestic business and strong growth in regulated markets. Domestic business growth outperformed IPM and grew by 17% YoY. Indoco's ranking in the domestic market jumped one rank to 29th with a market share of 0.67%. Europe revenue posted strong growth and was up 18% QoQ. US revenue was also significantly higher at Rs160mn, driven by a one-time milestone income. Currently, only two...

For the AMC business, we are concerned about fund raising, and regulatory clampdown. We remain wary of increased competition in broking. Lastly, despite much of the negatives in MOHL being factored in, the business needs to display scalability. We maintain a SELL with a TP of 711 i.e. 10/20x Broking/AMC business Dec-21E EPS. Key Risks: any sharp turnaround in fund raising and broking market activity, stronger scale up and lower stress in legacy book at MOHL. Treasury income (Rs 545mn, +82.3% beat), boosted MOFS (ex-MOHL) reported 3QFY20 PAT to Rs 1.49bn (+11.0/-3.1% YoY/QoQ). However 9MFY20 core cap markets/AMC performance remains weak as PBT declined 9.9/9.0% YoY. We tweak our estimates but retain SELL (unchanged TP of Rs 711), as core profit growth remains elusive.

We reiterate that AUBANK represents the virtues of both a bank and an NBFC. The bank's ability to deliver strong operating performance across parameters in a challenging environment, (with considerable consistency, esp. over the trailing 3 qtrs) increases our confidence on RoAE improvement at the bank. However, in view of lofty valuations (6.5x Mar-21E), esp. after the recent run-up (48% since Sept-19), we downgrade the stock to NEUTRAL. While the mgt has indicated that the bank could raise CET 1 in FY21, we have not built this. AUBANKs 3QFY20 performance exceeded our estimates across all fronts. While we remain admirers of AUBANKs strong fundamentals and business potential, were compelled to downgrade to NEUTRAL, post the recent run up. TP of Rs 866 (4.75x Dec-21E core ABV of Rs 177 + Rs 23/sh for the residual AAVAS stake).

Havells India (HIL) reported 10% YoY decline in revenue at Rs22.7bn, 13% below our/consensus estimates. Demand was affected by continued slowdown in the infrastructure sector, frail macro situation, weak consumer sentiment and liquidity crunch. Electrical Consumer Durables (ECD) segment revenue was flat YoY at Rs5.8bn despite festive season while the other four segments posted de-growth. Revenue of Cables (down 13% YoY to Rs7.1bn), Lighting (down 18% YoY to Rs3bn) and Switchgears (down 6% YoY to Rs3.7bn) suffered on account of decline in B2B/B2G sales. Lloyd continues to underperform as sales fell by 16% YoY to Rs3bn due to disruption in LED TV business. Gross margin was up 190bps YoY...

RBL Bank (RBL) reported 3QFY20 results with the key pointers being: (1) Gross slippages continued to be elevated at Rs10.48bn of which Rs7bn were from the identified corporate stress pool (2) Loan growth slowed to 20% YoY while core fee income growth was better at 37% YoY (3) NIM expansion journey continued with NIM at 4.57%, up 22 bps QoQ and 45 bps YoY (4) Cost to income ratio was lower 351bps YoY and 341bps QoQ at 48.1% on account of cost saving initiatives and one offs (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, RBL posted 41% YoY NII growth at Rs9,227mn, PPOP growth of 47% YoY at Rs7,322mn and PAT decline of 69% YoY at Rs700mn. We have revised our estimates for...

Axis Bank (ABL) reported 3QFY20 results with the key pointers being: (1) Corporate slippages at Rs38.91bn were largely from the BB/below pool (2) NIM guidance remains optimistic (3) Loan growth was healthy at 15.8% YoY, led by retail growth of 26% (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, ABL posted 15% YoY NII growth at Rs64,530mn, PPOP growth of 4% YoY at Rs57,427mn and PAT growth of 5% at Rs 17,570mn. We have revised our estimates for FY20/FY21/FY22 and retained Accumulate rating on ABL, revising our target price to Rs716 (from Rs717 earlier), valuing the...

23 January 2020 NTPCs commercialization target of ~5GW appears on track. PAF at NTPCs plants was impacted by coal production issues at Coal Indias mines (Talcher and Korba coal fields). We note that in FY19, u/r were largely pertaining to Unchahar (which has now stabilized post the boiler blast) and the lack of coal availability at its non-pit head plants (such as Kudgi and Mauda). This time around Talcher, Korba and Sipat pit head plants have largely seen issues on fuel availability. Thus, as production at corresponding Coal Indias mines recover, availability at these plants can be ramped up. Over Nov-Dec19, NTPCs plants within Korba coalfields (Sipat and Korba Stg. III) have reported PAF of 90-100%. ~5GW of capitalization for FY20 appears to be on track given the recent commissioning/commercialization. We believe fuel supply/availability at these plants can be ramped up (if operational issues at mines do not persist).

Stellar performance continues on order inflow front L&T; registered strong order inflows worth | 41579 crore, up 2% YoY at the group level, predominantly led by international orders (worth | 17901 crore) while cumulative order inflows for 9MFY20 were at | 128600 crore, up 11% YoY. While domestic orders declined 20% YoY to | 23700 crore. Key drivers for order inflows were infrastructure (| 28115 crore). L&T;'s order backlog was at | 306300 crore, up 9% YoY with international orders constituting 24% (consisting of 11% from non-Middle East countries). The expected strong...

The company witnessed sluggishness in demand for industrial products (such as power cable and industrial switchgear category) led by a slowdown in government offtake. In addition to this, a sharp price erosion in the LED panel and lighting business also aided muted topline growth for the company in Q3FY20. However, the management expects a better demand scenario in Q4FY20 led by a revival in consumer sentiments with a recovery in demand of Lloyd's air conditioner business. Also, dealer addition in rural India coupled with stabilisation of new air conditioner plants and launch of...

Axis Bank PAT grew by 5% YoY to Rs.17.57bn led by lower tax rate; PBT de-grew by 8% YoY led by higher provisions (up 14% YoY). NII grew by 15% YoY led by improvement in NIMs at 3.57% (highest in last 10 quarters). PPoP grew by 4% YoY (down 3.5% QoQ) led by decline in non- interest income and higher operating expenses as bank frontloaded expenses of Rs.1.2bn during the quarter. Gross slippages came in as a key negative, given the quantum was a 6-Qtr high figure at Rs62.14bn; however decline in BB & Below book was positive. With most of the asset quality issues behind and senior management in place, we remain confident of the structural growth story of the bank. Hence, we retain our BUY rating on the...

Havells has consistently gained market share in most of its categories even during a challenging environment. Core business will recover with improvement in demand trend and expected relief in liquidity in trade channels. Favourable base over the next 4 quarters (10% decline in EBITDA) will lead into an earnings upcycle. We expect margins to recover faster than volume growth. Amidst slowdown, management plans to tighten the belt on non-essential costs. We see enough levers for margins to mean revert. We recently (2QFY20) upgraded stock to BUY post seeing 16% fall in stock price. We expect worst is behind for Havells and healthy performance will re-rate the stock. Havells reported another let down. Co has been challenged by (1) Slowdown (real estate, industrial and govt projects), (2) Liquidity issue leading to low trade inventory and (3) WIP in Lloyd. We believe earnings upcycle will begin from 4QFY20 onwards led by favourable base, channel filling opportunity and gradual recovery in demand. We cut our EPS by ~6% for FY20-22 to factor slower recovery. We value Havells at 36x on Dec-21 EPS, our TP is of Rs 710. Maintain BUY.

The company used the proceeds to redeem debentures of INR500m along with interest in Jan20, and now plans to focus on the core business. Commissioning of DFCC will be a key trigger for the company GDPLs YoY numbers are not comparable due to the consolidation of Gateway Rail from Mar19. CFS volumes declined 15% YoY to 94,337 TEUs, while Rail volumes were up 8% YoY to 61,634 TEUs. that the adoption of Ind-AS 116 led to an increase in EBITDA by INR123m. an exceptional gain of INR80m related to the sale of the CFS terminal. Also, the sale of the Chandra CFS in Chennai impacted volumes for the quarter, resulting in a loss of market share in Chennai. For GDPL, discounts have increased by ~14% over last one year to INR4,000/TEU. The company plans to incur capex of INR1.5b over the next two years, majorly toward setting up of satellite terminals in north.

22 January 2019 Havells weak operating performance in 3QFY20, led by 10% overall revenue decline, has led to the third consecutive quarter of cut in earnings estimates. While the base is favorable, Havells should regain double-digit growth in FY21, if improvement in the liquidity scenario for overall consumption revival is supportive. Overall, revenues declined 9.9% YoY to INR22.7b (v/s 14% below est.). Revenue miss was largely due to weakness in Havells core portfolio (i.e. ex- Lloyd business), which declined 9%. This can be attributable to (a) weak consumer sentiment, (b) economic slowdown, (c) weak industrial demand due to muted capex, (d) dealer de-stocking on liquidity crunch, and (e) high base of last year (3QFY19 revenue growth was 29% in core portfolio). Lloyds revenue was down 15.9% YoY to INR3b. In the AC business, the company has witnessed low double-digit growth, a key positive after dull performance in the last summer season.

Zee Entertainment (Zee) reported a weak set of numbers as ad revenue decline percolated to the EBITDA and bottomline. Overall revenues came in at | 2049 crore, down 5.5% YoY, impacted by advertisement revenues, which declined 15.8% YoY. Domestic ad declined steeply by 15.7% YoY owing to conversion of FTA channels into paid, high base and overall weakness in ad environment due to macroeconomic challenges. Overall subscription revenues grew 15.4% YoY, led by 21.7% YoY growth in domestic subscription to | 632 crore, driven by tailwinds of NTO. EBITDA...

The bank reported steady business traction with credit & deposit growth stable at 9% & 11% to | 65334 crore & | 80451 crore, respectively. The bank's strategy of gaining higher share in retail & MSME advances coupled with retailisation of liability has been working well with credit growth within retail & MSME being higher than overall credit growth at 18% YoY & 17% YoY to | 19834 crore & | 25787 crore, respectively. In contrast, the corporate book has see de-growth of 7% YoY to | 19713 crore. Retail deposit & CASA...

While volumes increase deteriorating mix is expected to keep yields under check. Distribution revenues have bottomed out. ISEC is rapidly building loan assets which will drive earnings in the near term. All the above, along with cost control will drive earnings at FY20-22E CAGR of 17.9%. We increase FY20E/21E/22E APAT estimates by 0.6/4.8/5.1%, and continue to rate ISEC a SELL with a TP of Rs 376 (16x Dec-21E EPS). We believe 16x is a fair multiple for the stock given market linked nature of its business lines. A rally in equity markets coupled with increased retail participation remains a key risk. Higher core broking revenues and strong growth in funding book drive profits, while distribution and IB remain soft. Cost decline is lower than our expectation.

Bandhan Bank operates as a commercial bank which provides checking accounts, savings deposits and money market, mortgage and term loan services. It also offers card facilities and internet banking services. Bandhan...

21 January 2020 3QFY20 results broadly reflect Hindustan Zincs (HZL) continuing challenges in ramping up production. While mined metal production did recover (+4% QoQ), it was on a low, seasonally weak base. Revenue/EBITDA was up 4%/8% QoQ (in-line). We expect volumes to recover in 4QFY20 as production issues recede with ramp-up from SK mines. We build in 17% QoQ improvement in EBITDA for 4QFY20 on higher volumes and lower costs. However, at 6x FY21E EV/EBITDA, this benefit is well baked in. Maintain HZLs EBITDA was up 8% QoQ at INR22.9b (in line with est) on the back of some sequential recovery in volumes. Refined metal production rose 4% QoQ to 219kt. Revenue also increased 4% QoQ on higher zinc/silver volumes and slightly better LME prices. PBT came in at INR21b (flat QoQ). PAT, though decreased 22% QoQ to INR16.2b (5% lower than est.) as 2QFY20 had deferred tax credits of INR3.65b.