Revenue est. for FY21/22E is lowered by 10.0/3.8% to factor in Covid-19 impact. We assign 30x to FY22E core PAT and add net cash (ex SGF) to arrive at a TP of Rs 1,330. Maintain ADD. MCX delivered healthy volume growth in 4Q (+35.7% YoY) and expanded market share by 240bps to 94% in FY20. After strong 4Q, volume dropped significantly in April-20, due to reduction in exchange timings and a sharp drop in crude prices (Covid-19). Volume recovery was witnessed in May-20, but its still 35% below the 4Q level. Crude (45.4% of vol. in FY20) is impacted due to the high margin requirement (100%), extreme volatility, and negative settlement price. We dont see crude volume reaching the previous level in FY21E. Tailwinds like launch of Index futures and Institutional participation will aid volume recovery.
Print ad revenue was down 24.3% YoY on account of economic slowdown coupled with the lockdown in the last week of March. Circulation was also affected due to supply chain disturbance. It witnessed a decline of 9.6% YoY. The ad spend from corporates has further declined in the current quarter (Q1FY21E-TD) and is minimal at 20% of pre-Covid level. Circulation is slowly regaining lost readership and is currently at 80% of normal levels. We believe the ad scenario will remain challenging in the near term and will only grow slowly if economic sentiments improve. We expect print ad revenues...
We expect margin trajectory to be better than most ancillaries on the back of (1) sustained strength of automotive replacement segment in overall mix, (2) benign outlook for lead prices (currently at ~US$1635/tonne vs. Q4FY20 average of ~US$1800/tonne). B2C nature of aftermarket, inherent pricing power (near oligopoly on supply side, demand is fragmented) are seen leading to flattish margin performance in FY21E (negating impact of limited...
Strong margin of UCP segment drives bottomline While the EMPS segment margin was down ~311 bps YoY at 1.4%, the UCP profitability surged 423 bps YoY to 14.6% in Q4FY20. While the management refrained from giving any future margin guidance, we believe FY21E margin is likely to get impacted by lower operating leverage. However, we also believe ~| 800 crore of liquid asset on the book would...
We cut EPS estimate by 19/13% to factor-in (1) Consistent extension of lockdown, (2) Sharp tax increase by states, (3) Impact of loss of bulk scotch sales, (4) Downtrading possibility and (5) Weak consumer sentiments. However, we increase the P/E multiple to 40x (earlier 35x) owing to (1) Tax overhang being in the past, (2) Efficiently managed working capital (NWC days reduced to 60days vs 80days in FY19), (3) Collections in April/May were healthy. At 40x P/E on Mar-22E EPS, we derive a TP of Rs 586. Maintain ADD. UNSP revenue contraction of 11% yoy (15% dip excluding onetime bulk scotch sale) was higher than expected. Lockdown impacted the last 10-12days of March along with dry-up in social occasions prior to national lockdown. Pressure on P&A; was higher than Popular segment, taking away the premiumisation trend. P&A; saw a val/vol decline of 16/20% yoy while Popular was down by 11/7%. Aggressive cost control (Employee/A&P;/other expenses down by 35/33/18% yoy) expanded reported EBITDA margin by 101 bps to 13.6%. As normalcy returns, co will be able to capitalise on channel filling as trade inventory is low. Home delivery and premium liquor in malls can be structural changes for the industry. Ease in buying can be a key driver for adding consumer base along with higher share of premium segment.
Maintain Add, risks: We increase our TP to Rs920 based on 21x FY22e EPS. Key risks: delay in resolution of key plants, delay in key approvals, higher price erosion in the US, adverse outcome on drug price-fixing lawsuit in the US, escalation of NDMA issue in Metformin. Lupin reported steady revenues led by good traction in India, US and API business. While margins improved (13.7%, +228bps QoQ, lower R&D; spends) and recovered from Q3 lows, they still remain subdued and below our expectations. Lupin has been guiding towards an improving cost structure, however, benefits of those are yet to be seen. Going forward, we factor significant gains from operating leverage to aid margin expansion driven by key launches viz. gProAir, Levothyroxine ramp up and several cost containment measures (stable R&D;, lower SG&A; spends, savings on Solosec). With improving profitability and moderate capex (slightly higher than Rs5bn), we expect FCF generation of ~Rs40bn over FY20-22e. We raise our earnings by 12-18% for FY21/22 to factor slightly higher margins, lower depreciation and tax rate. Revise TP to Rs920 based on 21x FY22 EPS.
Revenue growth (33% YoY) was strong despite the fizzling out of volumes over the last week of Mar20 on news of reduction in the number of trading hours. Management indicated that crude volumes remain dented as the sentiment of participants was impacted due to (a) negative price settlement issue, and (b) increase in margin requirement. As volatility reverts to manageable level, company is optimistic about the reduction in margin requirement and Company has hinted at lockdown impact on its warehouse operations. During May, while traded value across Gold (+69% YoY), Silver (+121% YoY) and Nickel (+62% YoY) recovered, Crude (-78% YoY) and base metals continued to drag the overall We upgrade our EPS estimates over FY21-22E by 3-6% as we adjust our EBITDA margin trajectory. As the volatility reverts to manageable level, the company is optimistic of reduction in margin requirement and improvement The company has hinted at lockdown impact on its warehouse operations.
Revenues (especially international revenues) in Q4FY20 were impacted by the Covid-19 pandemic. In Q1FY21E, we expect revenues to decline 9.0% YoY led by lockdown related challenges. However, we expect revenues to improve in coming quarters with easing of lockdown and improvement in ecommerce revenues. Also, in the longer run, we expect the company to be a key beneficiary of increased spend in mobile advertising (to increase at a CAGR of ~35% in 2019-25). Further, in a post-Covid world, we expect a significant shift among consumers to adopt digital technology globally, which will drive long term revenues. In addition, we expect Affle to continue...
KEC International reported a strong set of numbers despite widespread expectations of disruption in execution due to lockdown from mid of Mar.'20. KEC reported Revenues/EBITDA/PAT for Q4FY20 at Rs. 3671cr/371cr/193cr lower by 4%/7%/3% on YoY basis.
Dilip Buildcon Ltd (DBL) has reported marginally better than expected results for 4QFY20 with 2.8% YoY decline in revenue and 8.2% YoY decline in EBITDA. Revenue and EBITDA are in-line with consensus estimates, whereas PAT at Rs1.15bn (down 48% YoY) is 8% ahead of expectations. The management has withdrawn its guidance for FY21 and will review it after couple of quarters once more clarity emerges on working conditions and availability of resources. For FY20, DBL reported revenue of Rs89.8bn, down 1.7% and EBITDA of Rs15.7bn, down 3.3%. EBITDA margin at 17.5% was down marginally by 30bps. PAT at Rs4.25bn declined by 44% owing to higher interest, depreciation and tax....
Lupin's 4QFY20 revenue at Rs38,457mn is up 2% QoQ and down 12.7% YoY. The top line is higher than our/consensus estimates by 2.2%/1.6%. Net profit for the quarter stood at Rs3,896mn. The net profit was driven by higher other income (net forex benefit of Rs1260mn), exceptional income of Rs830mn (net gains from business divestment) and lower amortization charge (lower by Rs390mn QoQ). The effective tax rate was lower at 25% vs guidance of 40%. EBITDA stood at Rs5,253mn, down almost 40% YoY. EBITDA margin (excl. other income) stood at 14% - higher by 300bps QoQ and lower by 614bps YoY. The QoQ improvement was partially...
Outlook & Valuation: We downgrade our revenue estimates by 7.5% for FY21E to Rs 169.6 bn on account of downgrade across regions while we introduce FY22E revenue estimates at Rs 186 bn.
Low base, inventory push drives domestic performance Despite revenue loss in March 2020, standalone revenue grew 12% YoY to | 154 crore due to low base and dealer stocking before the summer. While the management reiterated a strong summer demand for air coolers in May 2020 (post relaxation from lockdown), dealers managed to liquidate their inventory holding by ~40%. The company also launched a digital campaign to help liquidate channel inventory as well as company level inventory before the end of summer. We believe the H1FY21 would be very...
Deepak Nitrite (DEN) posted another strong performance in Q4FY20. Impact from COVID-19 led nationwide lockdown was counterbalanced by consistent margin profiles across business segments.
Metformin recall to be limited in few batches only We expect US business to get back on track and lead the growth for LPC over FY20-22E due to 1) resolution of Somerset, Goa and Pithampur (Unit-2) in FY21E 2) early launch of Albuterol 3) ramp up of Levothyroxyn 4) launch of complex injectables, Biosimilar and Spiriva in FY22E. LPC guided for EBITDA...
With a bunch of capex behind and a further cut should help FCF to improve. by volume decline as pricing was stable. Margins were better at 12.7% (PLe 7.1%), led by soft RM and cost control initiatives. While we slash FY21/22 revenues by 10.1%/8.6% (to factor in for lower OEM sales and weak replacement sales in CV segment), we upgrade margins by 100bp/80bp due to higher replacement share, lower RM and cost control benefits. This has...
30 May 2020 Revenues in 4QFY20 were down 1.1% YoY to INR38.5b (v/s est. INR41.4b), due to decline in US sales, partially offset by growth in the DF business. US sales were down 13.5% YoY to USD212m (42% of sales). APAC sales were down 16% YoY to INR1.4b (4% of sales). On the other hand, DF sales (31% of sales) were up 13.3% YoY to INR11.9b. Also, EMEA (Europe, Middle East and Africa) sales were up 7.4% YoY to INR3.5b (9% of sales).
