ITC commands high operating margin of 36%, along with core RoCE of ~40%. We have BUY rating with a TP of Rs 353, based on 32x Jun-19EPS. ITCs gross revenue was up 4.3% YoY at Rs 137bn (our expectation 3.4%). EBITDA/PAT grew 6.2%/7.4% YoY respectively, in-line with our expectations. Revenue growth was healthy, considering destocking pressure. Cigarette business registered healthy revenue/EBIT growth of 6.6%/9.0% respectively (5%/6.4% expectation). We believe cigarette volumes grew by ~1%. Non-cigarette business remained slow, with revenue/EBIT growth of 3.5%/4.5% respectively
Maintain BUY with a TP of Rs 690, 14x FY19E. Mphasis delivered stellar 1QFY18 performance, with revenue at USD 231mn, up 4.3% QoQ, led by the HP/DXC channel (+10.1% QoQ and 25.8% of revenue) and Direct core (4.1% QoQ and 54.8% of revenue). EBITDA% came in at 14.9%, -89bps QoQ, and APAT stood at Rs1.87bn. Deal bookings doubled in 1Q, with TCV of USD 183mn as compared to the quarterly average of USD 91mn in FY17 (88% of TCV within Mphasis focus areas of Digital and GRC).
Maintain BUY with a TP 8478 (24x FY19E EPS). Maruti Suzuki (MSIL) delivered in line revenues (+18% YoY to 175bn) in 1Q. However, EBIDTA margin came in lower at 13.3% (-156bps YoY), led by higher discounts, input cost and compensation paid to dealers. APAT came in lower than expectations at Rs 15.6bn (+5% YoY), owing to margin contraction offset by higher other income.
Raise estimates; maintain BUY: We increase FY18/19E EPS by ~8% to factor in (a) USD 0.5/bl hike in GRM, (b) benefits of ethane imports (USD 250 mn). Revised TP stands at Rs 1,785 (Rs 1,545 earlier). At CMP, the stock trades at 15x FY19E EPS of Rs 105 and 14x FY17E EPS of Rs 116.
Q2CY17 results were 6% ahead of estimates at operational level driven by margin improvement in Bill Forge (BFL) and Europe. Consolidated EBITDA margin at 13.2% benefitted from closure of the Jeco (Germany) plant and merger of Bill Forge. The management maintained its guidance of further improvement ..
Q1 revenue declined 19% YoY to Rs 8.2 bn (~14% below estimate) as export shipments were impacted due to setting up of revised protocols as stipulated in the import alert by the USFDA. As per the management, the protocols have now been established; expects normalcy from Q2. Divis guides for flat cc r..
Karnataka Bank (KBL) reported PAT of Rs 134 cr ( up 10% y-o-y) in Q1FY18 , led by improvement in NII ( up 16% y-o-y) and other income ( up 25%y-o-y). The increase in other income was attributed by treasury income (up 78% y-o-y) and Fee Income (up 8% y-o-y). This quarter witnessed improvement in NIMs..
Retains Guidance, But Organic Growth Will Be Smaller Contributor HCL Technologies' (HCLT) 1QFY18 QoQ revenue growth of 2.6% in CC terms was below our estimate of 3.6%. Moreover, the organic growth was a disappointing 1.3% (our estimate was 2.0%). For FY18, while HCLT has retained its revenue growth guidance of 10.5%-12.5% in CC terms and 19.5%-20.5% CC EBIT margin, we believe the former will be less driven by organic revenues than assumed earlier (6%-7%). After a great FY17, HCLT sounded fairly cautious on prospects of the IMS service line (~40% of revenues) in FY18 because of slower decisionmaking by clients which is quite surprising as we did not hear any such commentary from peers. In 1QFY18, poor organic growth was led by disappointing performance in its IMS and...
GST Compensation And Higher Discount Impacts Margins Maruti Suzuki India's (MSIL) 1QFY18 earnings were below expectations with EBITDA and PAT coming 8%/7% below our estimate, respectively. EBITDA margin at 13.3% (down 153bps YoY , down 70bps QoQ) was 120bps below our estimate of 14.5% as the company compensated dealers for Goods and Services Tax or GST implementation. Compensation to dealers during 1QFY18 for GST implementation had a 50bps adverse impact on margins, while sales and promotional expenditure to clear the stock before GST implementation accounted for another 30bps. Apart from this, the rise in commodity prices also had an adverse impact on margins. Net sales grew 17% YoY on the back of double-digit YoY volume growth...
Loan Slippage Trending Downwards, Though At A Slower Pace Annualised loan slippage of 4.3% (Rs49.8bn) in 1QFY18 of ICICI Bank was below our estimate of Rs61bn. Adjusted slippage over the past five quarters is on a downward trend. More than half of the slippage is outside the watch list and restructuring bucket as a large electronics and engineering account (from outside the watch list) has slipped. The management has given guidance of another two to three large accounts from outside the watch list slipping in FY18. Recoveries were healthy at Rs28bn which can be attributed to the recovery of JPA Cement. On account of a certain downgrade, the watch list increased by 7% sequentially to...
The Company reported decline in margins by 194bps YoY to 12.0% in 1QFY18 on account of high ESOP cost of Rs113mn and 63bps YoY decline in margin of Electrical Consumer Durable business, which was, however partially off-set by improved margins (+210bps) in lighting products business. Overall segmental EBITDA margins decreased 80bps QoQ in 1QFY18. Revenue from Lighting segment grew by 10.3% YoY with 210bps YoY expansion in margin due to higher sales of CFL and traditional bulbs both in terms of volume and value. However, despite adverse revenue mix CGCEL's cost structure remained stable owing to continued efforts on operational efficiencies. Its net profit declined by 14.1% YoY to Rs803mn in 1QFY18 owing to...
ff Gross NPA in non-individual segment increased substantially in 1QFY18 as the company recognised loan worth Rs9.1bn to one of the accounts referred to NCLT/IBC by the RBI. The Company has adequately provided for on same and does not foresee any further hit in profitability from the aforementioned account. ff Individual disbursement growth trajectory began normalizing in 1QFY18 after sharp decline in 2HFY17 due to demonetisation, which the Management expects to improve further in FY18. ff Non-individual loan contributed 36.1% to incremental growth in HDFC's loan book in 1QFY18 compared to 28.7% in 4QFY17 and 12% in 1QFY17....
Strong Performance on All Fronts: Upgrade to BUY YES Bank has delivered higher-than-estimated operating performance in 1QFY18 driven by (a) sharp sequential growth in NII aided by sequential improvement in NIMs of 3.7%; (b) stellar business growth led by consumer loans and corporate banking portfolio; and (c) sequential decline in provisioning expenses owing to higher upgrades and recovery coupled with lower fresh slippages. The Bank demonstrated all round improvement in asset quality front led by 89.5% QoQ decline in fresh slippages, 32.4% QoQ decline in gross NPA and 49.1% decline in net...
Supreme Industries (SI) is a plastic product manufacturer and the largest plastic processor in India, processing over 0.28mn MT annually. Company has four business verticals i.e. Plastic Piping (52%), Packaging Products (21%), Industrial Products (19%) and Consumer Products (8%). SI has 22 manufacturing plants situated across India. Company enjoys a significant market share across its business verticals; Plastic Piping (9.48%), Indus trial Products (15%) and Consumer Products (13%). Supreme Industries is the market leader in the Packaging Products segments like XLPE (50%), EPE Foam (36%), Cap Cell ( 30%) and Air Bubble Film (18%). SI's...
Dewan Housing Finance Ltd. (DHFL) yet another quarter witnessing growth on all fronts. Net Interest Income grew handsomely at 28.3% and stood at Rs. 619.7 Cr vs Rs., 482.9 Cr and down 1.3% QoQ Rs. 627.9 Cr. Due to well controlled operating expenses (up 15.4% YoY) Pre provision profit was up 33.4% at Rs. 464 Cr as against Rs. 347.9 Cr same time last year and Rs. 458.6 Cr QoQ. Adj. PAT registered a growth 29.3% YoY at Rs. 260.5 Cr from Rs. 201.4 Cr and Rs....
ITC reported decent set of numbers for the quarter with revenue growth of 4.3% YoY to | 13722.2 crore, broadly in-line with our estimate of | 13669.4 crore. Cigarette grew 6.6% YoY, FMCG & hotel segments grew 9.0% and 6.1% YoY Cigarette volumes remained muted (~1% volume growth recorded), growth was primarily led by price hikes undertaken in previous quarter post budget. Additionally thin trade pipeline restricted any major plunge in cigarette volumes ahead of GST implementation....
Consolidated PAT grew 15% YoY to |238 crore higher than our estimate of |207 crore, not comparable QoQ. Revenues also grew 33% YoY to |4857 crore better than expected AMC remained strong with revenue and PBT, grew 14% YoY to | 395 crore and | 150 crore, respectively and AUM at |362550 crore. The life insurance business remained weak as it continued weeding out unprofitable business whereby new business premium was flat YoY at | 183 crore and marginal growth was in renewal premium to |...
ICICI Securities Ltd | Retail Equity Research Maruti Suzuki (MSIL) reported its Q4FY17 numbers, which came in below our estimates. Revenues at | 17546 crore, up 17.4% YoY/ down 4.3% QoQ came below our estimate of | 17697 crore. The topline growth was driven by 13.2% YoY volume growth & 3.2% YoY ASP growth. The miss on revenues is attributable to lower than estimated ASPs (| 434203 against our estimate of | 439718). Volumes for Q1FY18 stood at 394571 units, up by 13.2% YoY. Of this, the domestic volumes grew by 14.3% YoY to 368431 units,...
MSIL's 1QFY18 earnings and margins were below the cons. estimates. Net sales were at Rs17,546cr while PAT was at Rs2,331cr. Net sales, EBITDA and PAT grew by 17.4% / 5.3% 4.4% on yoy basis and were 0.3%/-6.8%/-7.9% against the consensus estimates. While PAT has grown by 4.4% to `1,556 in the quarter, there is Rs85cr component on one-off w..
Maintain BUY with a TP of Rs 980, 14x FY19E. HCL Tech (HCLT) posted revenue of USD 1,884mn in 1QFY18, 3.7% QoQ, based on 2.7% CC (~1.3% organic), with BFSI and Retail & CPG verticals at 5.3% and 4.9% respectively. Though IMS recovered to 1.7% (0.9% QoQ in 4Q), there are near-term headwinds. Operating performance was strong, with EBIT% at 20.1%, supported by a better mix (higher IP and lower BPM) and productivity gains (utilisation at 86%). HCLT maintained its guidance of 10.5-12.5% CC revenue growth for FY18E, implying CQGR of 2 to 3.2%.
