For Q2FY21, revenue grew by 6% YoY on account of gradual improvement in operations post lockdown. Feed volumes improved 2.5%YoY and Feed realisation grew by 5%YoY due to price hike in previous quarter. However, Processing volumes de-grew by 11%YoY while export realisation grew by 15%YoY due to better region mix. Industry shrimp production is expected to drop by ~15%-20% in FY21 due to Covid-19 led disruptions but to improve in FY22. Relaxation in restrictions and improvement in farm-gate prices is encouraging farmers which along with AFL's increasing market share in Feed segment will support future volumes. We expect...
Glenmark Pharma Ltd (GNP) is an India-based pharmaceutical company with commercial presence in more than 80 countries across the globe. GNP is primarily focused on generics, specialty and OTC businesses. The company has strong regional/country-specific presence in diabetes,...
Net revenue for Q2FY21 declined 14.9% YoY on account of subdued recovery post lockdown relaxations. However, Gross Refinery Margins improved to US$ 5.1/bbl (vs US$ 2.8/bbl in Q2FY20) driven by...
RBL Bank Ltd. is a fast-growing private sector bank with a network of 386 branches and over 8.5 million customers. It offers various services, including corporate and institutional banking, commercial banking, retail banking,...
While CV continued to lag on account of weak demand, the fort was held by steady traction in the wind & tractor segment. Exports contribution in the Q2FY21 revenue mix fell 2% YoY to 26% vs. 28% in Q2FY20. Nonetheless, the management expects strong offtake on the exports front on the back of a solid order book and new product exports from ABC plant. Furthermore, Timken expects to launch new products in areas like solar, belts, drives and lubricants in order to improve market share and utilisation....
We initiate coverage on Sundram Fasteners with an ADD rating and set a target price of Rs 565, at 27x FY23E EPS, which is at a 10% premium to its 5-year average P/E. Post the run-up in stock price, we would recommend accumulating the stock on every correction. Key risks: slower-than-expected recovery and rapid shift towards electric vehicles We initiate on Sundram Fasteners with an ADD recommendation. Volumes are back to pre-COVID levels for several segments, including cars, tractors and 2Ws. We expect sales to grow in mid-teens over FY21-23, led by a cyclical uptick in India and abroad. Sundaram's enhanced competencies have allowed it to diversify into multiple products. It is also expanding in the non-auto segment. It has lowered dependence on high tensile fasteners with contribution reducing from 80% of revenues earlier to 31% currently. Sundram's diversified customer and product mix enable it to enjoy robust profitability - the elevated margins (16-18%) and high ROEs (in mid-teens) are a function of its mix across cars, tractors, CVs, exports and aftermarkets.
EBITDA margin improved 100bps YoY aided by lower employee benefit expenses. In line with operational performance, PAT increased 23.4% YoY to Rs. 3,117cr, further helped by higher other income and lower...
Capital allocation exercise gathered pace in 1HFY21 as MM continued its focus on exiting non core/loss making business. We reiterate BUY on M&M; (MM) led by 1) positive rural sentiments and stable tractor outlook providing margins and cash-flow cushion to compete in UV business, 2) renewed focus to gain back lost market share in UV business with new product launches, 3) dominating presence in LCVs to help ride CV upcycle and 4) increased focus on capital allocation with exit of non-core...
Earlier, during Q1FY21, VSSL reported a subdued performance. While the Q1FY21 performance was weak on the back of Covid-19 related concerns, in Q2FY21, the company witnessed a healthy turnaround in its operations on the back of a smart recovery in demand from the auto sector. On the back of strong demand from the domestic auto sector, in Q2FY21 VSSL registered its highest ever quarterly sales volume of 43986 tonnes (up 32% YoY). Going forward, for Q3FY21 also, the management expects the healthy trend in auto...
While crude oil prices are witnessing sequential improvements, supported by volume growth from Hazira plant and KG98/2 project in long-run. Hence we upgrade our rating to BUY on the stock with revised target price of Rs. 86 using SOTP valuation....
Background: Established in 1995, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India and has the world's largest manufacturing facility for packaged explosives. With a licensed explosives capacity of over 290,000 MT/annum, the company has ~28% market share in India. Solar, with a 70% market share in exports from India, exports to 51 countries around the world. Economic Explosives, a 100% subsidiary, manufactures detonators. In recent years it has expanded its manufacturing base to Nigeria, Zambia, South Africa, Turkey, Ghana and Australia. SIIL also has interests in the...
In a group call we hosted recently, management of VIP Industries highlighted 1) timeline of ~12-18 months for sales to revert to pre-COVID levels 2) plans to reduce cost by ~1.8bn in FY21E (~50% of the reduction is expected to be sustainable in nature) and 3) pressure on GM in FY21 (replica of 1HFY21) given higher discounts and reduction in share of Bangladesh operations. Amid indications of slightly back-ended recovery we cut our sales estimates by 5%/9%/6% for FY21/FY22/FY23 respectively. While we expect EBITDA loss to widen in FY21E to Rs844mn (Rs719mn earlier) and cut our FY22E EBITDA...
Long expected IAC basin trials are on November 27 whereas delivery for the same is expected by December 2021. If things fall in place, as they should, we expect FY22E to be amplified on account of IAC execution. This should aid management to reach their topline target of | 4000 crore. In the quarter, IAC execution was | 491 crore (cost plus | 283 crore, fixed price | 207 crore)....
During the quarter, 2W segment constitutes 70% of the revenue mix was supported by strong order back log and robust new order coming from the entry segment motorcycle. Focus on export market with a share of 20% by FY23 from current 5%....
Our positive view on MM is based on a strong recovery in Tractors, LCVs recovering in 2HFY21 and positive development on capital allocation. We were not banking on any positive development in its SUV business, but have taken stock of MM's SUV and LCV business in this note. Both businesses have so far positively surprised us. The company is reorienting its SUV business to maintain its DNA and brand position and garner market share. Thar's success shows that it is on the right track. The MM and Ford JV got delayed due to the COVID-19 pandemic. However, the product pipeline reflects some promising upgrades in its UV portfolio....
With significant reduction of sugar inventory through export & sacrifice towards B-heavy ethanol, DBSL would be able to generate cash from operations to the tune of | 607 crore & | 444 crore in FY21E & FY22E, respectively. We expect debt reduction of | 790 crore by FY22E. With new addition in distillery capacities, the visibility of revenues & earnings growth has extended for next five years. We revise our target price to | 180 (from...
Motherson Sumi (MSS) has embarked on its next five-year plan - 'Vision 2025' with an ambitious (USD36b/40%) revenue/RoCE target, and additional focus on diversifying into new industries (25% contribution by FY25). [Click here for presentations of Day 1 and Day 2]. Vision 2025 focuses on expanding into nascent geographies, new technologies in current products and addressing the broader mobility space (beyond PVs). While organic growth would be broadly driven by content increase through new technologies and expansion into new markets and segments, inorganic growth would play an important part in attaining its strategic objectives in the Auto...
A changing business model - BATA in the process of re inventing itself: BATA over the last few years has focused on higher value products and re-inventing itself to cater to the younger and urban population with the aggressive addition of stores and the introduction of red collection and increased focus on women footwear.
High Valuations Despite Increased Rural Demand and Market Share Gain Possibilities: Footfalls continue to be low as the textile industry continues to witness selectivespecific purchases based on needs in the current economic scenario.
Background: TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick Cookware and Kitchen Electric Appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. TTKPT has a market share of ~60% in the outer-lid pressure cooker, ~15% in inner-lid pressure cooker within the organized market and in...
