Downgrades

About the stock: Aurobindo is a significant global generics player with 28 manufacturing facilities, including eight key formulations facilities in India and abroad along with three R&D; centres. The current employee strength is more than 8000,...

Lupin Limited is a multi-national pharmaceutical company based in Mumbai. The company specializes in branded and generic formulations, API's and advanced drug delivery systems in the area of biotechnology. The...

UPL Ltd is a global agriculture Solutions Company engaged in the agrochemicals and industrial chemicals business with manufacturing sites across the world. Through recent expansion, the company has become a...

Shalby Ltd (Shalby') came out with its Q2FY22 results which reported sequential margin degrowth on the back of implants businesses losses and reduced covid related tailwinds (16.2% vs 25.5% for Q2FY21 vs 20% for Q1FY22). Implant business reported USD 1mn revenue in Q2FY22, guidance for FY22E and FY23E at INR 50crs and INR 100crs respectively. First Ortho Franchise started in Udaipur, expected to open 50 franchises across India over medium term. The newer hospitals (892 beds) reported ~12% EBITDA margins with 37% revenue contribution while mature hospitals (228 beds) reported ~37% EBITDA margins with 29% revenue contribution. Ramp-up of occupancy in newer hospitals will improve the overall EBITDA margin profile. Key optionalities including the Implants business and the franchisee business are yet to play out. We retain a BUY on Shalby with a target price of Rs280, which is 81% upside on CMP. At...

Divi’s Laboratories’ (Divis) reported Q2FY22 performance was below our estimates. Consolidated revenue grew 13.6% YoY to Rs19.9bn (I-Sec: Rs20.9bn), EBITDA margin dropped 120bps YoY to 41.2% (I-Sec: 42.5%) and PAT grew 16.7% to Rs6.1bn (I-Sec: Rs6.3bn). The growth was driven primarily by custom synthesis business while generics declined YoY.

We recommend BUY with TP of Rs. 430/share.

Maintain BUY with a revised TP of Rs 300/share (previously Rs 315/share) valuing it at 20x FY24E EPS.

AET remains a marginal player in the global enzymes landscape that is estimated at ~US$10 billion and poised to grow at 6-7% CAGR as more applications across usage industries incorporate enzymatic technologies It has got proven capabilities and stable financials, thanks to a mix of organic and inorganic growth strategy employed by management Going ahead, AET plans to augment its R&D; capability that bodes well in the long run in its quest to improve scalability & foraying into complex enzymes...

Net sales for Q2FY22 were at | 1067.6 crore with carbon black sales volume at ~116 KT, up 7% QoQ and consequent EBITDA/tonne at ~| 16,150 Consequent PAT in Q2FY22 was at | 121.5 crore, up 16.5% QoQ...

During the quarter ended September 2021 (Q3CY21), global steel production excluding China registered a strong increase of 15.3% YoY but was down 2.7% QoQ. Chinese steel production for the quarter declined 14.2% YoY and 16.6% QoQ, in line with their strategy to keep steel output at 2020 levels as a part of their goal to reduce carbon emissions. With the decline in steel production and exports from China, there may be a gradual increase in steel production from EAF steel producing countries, which augurs well for both graphite electrode demand and realisations...