Nestle India's (NEST) earnings fell short of expectations in 4QCY18 after outperforming significantly in previous quarters. Domestic revenues for the quarter were up 12% YoY, largely led by volume growth and in line with expectations. Overall revenues fell short of expectations as exports were sluggish. However, similar to the previous quarter, the growth was fairly broadbased and the innovation intensity was maintained with the launch of Maggi Baked Noodles, Nescafe E Coffee smart machine and Everyday Chai Life. On the margins front also the performance was below expectations as advertisement support was stepped up in response to new launches done in the past six months and some contingency provisions required to be made during the quarter. Although margins during the quarter fell outside the band, considering that...
Tech Mahindra Ltd. reported healthy broad based growth in Q3 FY19. Tech Mahindra reported consolidated revenue growth of 3.5% on QoQ and 4.3% on constant currency basis. EBITDA margin expanded 300 bps on YoY basis and 50 bps on QoQ basis.
We value Voltas based on SOTP, valuing EMPS/EPS/UCP at Dec-20 P/E at 17/20/35x with TP of Rs 650 (Rs 640 earlier). Voltas reported a weak quarter led by muted off-season RAC performance. Net Revenues grew by 9% driven by healthy execution in the project biz (up 16% vs. exp. of 22%). Weak RAC sales (-3% vs. exp. of 5%) was owing to high channel inventory, modest festive season offtake and heavy base (32% in 3QFY18; rating change led pre-buying).
ICICI Securities Ltd | Retail Equity Research Topline growth of ~9% YoY was largely impacted by the UCP division where segment revenue declined ~3% YoY. The tepid performance was led by poor festive demand and failure of second summer. However, the project (EMPS) and product (EPS) segment recorded revenue growth of 16% and 21% YoY, respectively, owing to efficient execution of quality orders UCP segment EBIT margin was down ~450 bps YoY to 8.5% due to...
United Breweries' (UBL) 3QFY19 earnings were well above expectations. Almost on all growth parameters the company delivered well ahead of peers during the quarter. Net sales growth at 22% and EBITDA growth at 62% were driven by healthy underlying volume growth of 16% and continued cost efficiency. Price/mix growth at 5% YoY was fairly healthy and reflective of improved state mix and continued premiumisation in the market. Although there are some tax (Karnataka increased additional excise duty) and cost challenges on the horizon (glass, barley and sugar prices), we believe the robust portfolio, healthy volume, improved mix and continued cost management and productivity initiatives should help in mitigating those challenges to...
EMPS Outperforms; UCP Stays Modest In An Unseasonal Quarter BUY Voltas reported consolidated revenues of Rs14.9bn for 3QFY19, up 9% YoY and 5% above our estimate. The top-line growth was driven by EMPS segment with its revenues rising 16% YoY to Rs8.7bn, while EBIT margin rose 80bps YoY to 7.9%. Unitary cooling product (UCP) segment's performance was modest as 3Q is an unseasonal quarter (winter) while the summer season during 1HFY19 was weak. UCP sales fell 3% YoY to Rs5.2bn in 3QFY19 and were flat YoY at Rs21.6bn in 9MFY19, while the industry declined 4% YoY. EBIT margin was down 450bps YoY at 8.5% in 3QFY19 and 320bps YoY at 10.3% in 9MFY19 owing to lower sales, rise in input costs, INR depreciation and...
Maintain buy with a TP of Rs 800 (16x Dec-21E EPS + Rs 135/sh for pipeline). Glenmark reported broadly in-line numbers as revenues grew 16% YoY to Rs 25.6bn, and EBITDA came in at Rs 4.3bn with 17% margin. However, PAT at Rs 1.2bn was much lower than expectation owing to a Rs 1.3bn forex loss included in other income.
Given the attractive valuations, we maintain BUY with a TP of Rs 570 (2xDec-20 ABV of Rs 285). Contextually, 3Q was better than expected as disbursals and sanctions dipped merely ~6/4% QoQ and AUM grew ~12/3% to ~Rs 106bn. Calc. repayments dipped to ~17% of opening AUMs. Contrary to our expectations, margins expanded ~10bps to ~4.5% as the rise in yields outpaced the growth in CoF. GNPAs jumped ~30bps QoQ to ~3.9% driven by deterioration in the LAP book, a seasonal phenomenon.
Our TP is Rs 184/sh (8x Dec-19E standalone + OVL EPS and Rs. 31 from investments). Maintain BUY. We believe that the recent trend of the government to allow full pricing and use buybacks and/or dividends to raise cash (which also benefits the minority shareholders), is the likely way forward. We maintain our view that the government will not reverse the reform process by asking domestic Exploration and Production (E&P;) companies to bear the subsidy. Thus, we do not foresee any subsidy burden on the domestic E&P; companies.
mix from ROW markets and API sales. The new ANDA launches, favourable forex and steady growth in India formulations kept EBITDA flat despite price erosion of its US portfolio by 8%. The forex loss of Rs1.3bn have impacted PAT to 72% QoQ decline in Q3FY19. Overall GNP's revenues were marginally better than expected considering the benefits of key launches (gWelchol, gVagifem, Tacrolimus, gNitrostat, gMupirocin) in US and better traction in India. The management guided for...
15 February 2019 volume growth was 9.6% YoY. EBITDA increased 14.9% YoY to INR2.4b (our category saw revenue growth of 7.5% YoY. stood at 43% (-110bp YoY, -30bp QoQ) while value market share for Boost stood at 10.8% (-50bp YoY, -10bp QoQ). Higher staff costs (+140bp YoY to 14%) and ad spends (+110bp YoY to 12.1%) were almost entirely offset by lower other expenses (-220bp YoY to 23.
ICICI Securities Ltd | Retail Equity Research Overall volume growth of 8.7% led to 7.5% increase in Q3FY19 sales to | 1,116.8 crore. HFD category volume growth was at 9.6% Auxiliary income increased 20% YoY on the back of improvement in OTC products and oral care portfolio performance. Volume market share of Horlicks was 49.5% with value market share of 43% (decline 30 bps QoQ). On the other hand, volume market share of Boost was 13.9% with value market share of 10.8% (decline of 10 bps QoQ)...
Revenues Disappoint, But Margins Better Than Expectations The operating performance of CCL Products (India) or CCL in 3QFY19 was below our expectations. On a consolidated basis, revenues declined 14.6% YoY as the management indicated that business continues to be normal and quarterly volatility is largely related to order execution. For 9MFY19, revenues increased slightly by 0.4% YoY to Rs8,193mn. The company continues to focus on volume growth. On the analyst call, the management maintained its profit growth guidance of 15%-20% in FY19 (which was increased from 10%-20% during the 2QFY19 call) and maintained revenue growth...
Power Mech Projects (PMPL) posted 3QFY19 consolidated revenues of Rs6bn, up 72% YoY and 20% above our estimate of Rs5bn. The growth was driven by the surge in civil segment's revenues to Rs2.5bn (41% of total sales versus 16% YoY) owing to the execution of a strong opening order book. ETC segment's revenues grew 35% YoY to Rs1.9bn (31% of total sales), on a low base. O&M; segment's revenues were flat YoY at Rs1.4bn (24% of total sales). International projects contributed 21% to total sales (versus 28% YoY), while the non-power sectors accounted for 34% of total sales (versus 9% YoY) in 3QFY19. EBITDA rose 65% YoY to Rs780mn, translating to an EBITDA margin of 12.8%, marginally below our estimate of 13%. PAT grew 87% YoY to Rs339mn, much above our estimate of Rs245mn...
We have revised our FY20/21E earnings to factor in Gulf's healthy volume trajectory. Maintain BUY with revised TP of Rs 1,037 @ 22x Dec-20E EPS. Gulf Oil Lubricants (GOL) registered healthy volume growth of 20% YoY (34% including a one-off institutional order). Revenue/EBITDA/PAT grew by ~30/18/17% YoY to Rs 4.6/0.7/0.5bn. Gross/EBITDA margins were down by ~500/150bps to 43.3/15.8% on account of low-margin institutional order. Adjusted for this order revenue/EBITDA growth would be ~21/18% with ~30bps margin decline YoY.
14 February 2018 Domestic sales grew by 12% YoY, driven by higher volumes. Export sales were flat YoY at INR1.9b due to lower exports to Bangladesh and the UAE. EBITDA however, shrank 360bp YoY to 21.2% due to a sharp increase in other expenses, largely on account of step-up in demand-generating activities, including on new products. PAT were up 12.8%, 23% and 27.5% YoY, respectively. Reported domestic sales grew 10.9% YoY, while exports increased 6.9% YoY. Gross margin expanded 260bp YoY to 59.4%, while the EBITDA margin improved 200bp YoY to 24.2%.
Bata India's (BIL) YoY 3QFY19 performance positively surprised on the margin front with EBITDA margin expanding 450bps (YoY) while we were anticipating only a 90bps expansion. Revenues Sector: Retail were in line. There was a 350bps gross margin expansion which has been explained by: (1) Volume discount from both raw material and finished goods suppliers as BIL entered into six- CMP: Rs1,272 monthly contracts against three-monthly contracts earlier. 200bps-250bps gains accrued from this move. (2) The revenue mix shift towards retail - 85%-88% of revenues - which grew 18% YoY Target Price: Rs1,479 in 3QFY19 and accelerated from the low-teen growth witnessed since the past several quarters (like-to-like growth). To our surprise, the wholesale part showed a decline of 2%-3% whereas we Upside: 16%...
Natco Pharma's (NPL) revenues in 3QFY19 at Rs5,567mn were 4.5% above our estimate and 7% below consensus estimate. Net earnings at Rs1,593mn declined 12% QoQ and were below our estimate/consensus estimate by 10%/15%, respectively. Net earnings were down QoQ, despite revenues being up 2.5% as interest income was lower (a decrease of Rs170mn QoQ), while other expenses rose 11% QoQ. Other expenses were impacted by higher R&D; spending during the quarter, while other income was lower because of liquidity requirement for executing the ongoing share buyback programme....
