Dr. Reddy's Labs (DRRD) today received final approval from the USFDA to launch Buprenorphine and Naloxone Sublingual Film, a generic version of Suboxone, in the the US market. Although the product is covered by seven patents until 2023, DRRD has got favorable ruling from the district court for four main patents. Indivior has challenged this ruling in the higher court and the decision is still pending. DRRD is doing an at risk' launch of gSuboxone based on the comfort it has on the patent litigation. The drug is indicated for the treatment of opioid addiction. Competitive dynamics of gSuboxone: Apart from DRRD, Mylan has received...
As Digital scales up, profitability should follow suit Approach to Digital reaping dividends: Digital has been growing at more than 30% and now contributes 41% of ZENT's total revenue. More than 80% of the business has been home-grown; the company will continue developing new solutions to further strengthen this segment. Marked by Return on Digital' proposition: ZENT's Return on Digital (ROD) framework is now part of every deal, with everything being native digital, mobile and cloud. The suite has various platforms that are made for distinct...
We believe FY19 may see a gradual comeback for large cap pharma companies, driven by (1) Actual and likely regulatory resolutions, (2) Moderating price erosion and (3) Several product launches across generic and specialty categories in 2HFY19. We believe earnings have bottomed out, while the base is favourable. Upgrade Sun Pharma to BUY. Beleaguered by regulatory clampdowns, channel consolidation in the US and increased competition, earnings of US-focused Indian pharma companies dropped 30% over FY18. Despite the all-too-visible business challenges, they persisted with higher R&D; activity (related to complex generics and specialty business), which aggravated the pain. As a result, the NIFTY Pharma index has corrected ~30% over three years (after 30% CAGR over FY11-15).
Spike in execution from 2HFY19E post dip in 1HFY19E KNR's revenue grew 29.5% YoY in Q4FY18 to `6.2bn (19.2% above estimates) led by better execution. The EBITDA margin expanded 435bps YoY to 22.3% (135bps above estimates) due to lower subcontracting costs and few projects nearing completion having better margins. Depreciation has increased sharply by 152% YoY (up 32.2% QoQ) to `491mn due to higher asset utilization for couple of irrigation projects with shorter execution period. Adj. PAT grew sharply by 52.1% YoY to `797mn (81.7% above...
Halol received VAI: The US regulator has upgraded current status of SUNP's Halol plant to VAI (Voluntary Action Indicated). The upgradation status of the plant means that the response and remediation works of SUNP are at...
Net net, high valuations are justified, considering consistent market share gain, margin expansion and a hungry management not willing to lower its guard. Our TP rises to Rs 1,701 on 45x Jun-20E EPS (earlier Mar-20). Maintain BUY. We attended HULs annual investor meet. Our interaction with the companys senior management has further increased our confidence on its earnings trajectory over the next two to three years.
Srikalahasthi Pipes Ltd. (SPL) one of the leading manufacturers of DI pipes in India, reported its Q4 FY18 numbers, which was below our expectations. The company reported a bottom-line of Rs. 343.3mn (growth of 10% Y-o-Y) on a...
Our recent meeting with the management of Thermax (TMX) reiterates our thoughts on the positive long term prospects. TMX aspires to achieve revenues worthRs160bnandanOrdermixof50:50betweenDomesticandInternationalby FY2028. TMX highlighted their plans to enter new area/product to mitigate...
IG Petrochemicals (IGPL) in Q4FY18 posted revenues of Rs. 313 Cr (up 8% Y-o-Y, up 6% Q-o-Q) due to steady production of Phthalic anhydride led by strong demand in end user industries.
J Kumar Infraprojects (JKIL) in 4QFY18 posted revenues of Rs. 902 Cr (up 73% Y-o-Y, up 97% Q-o-Q) due to strong execution of Mumbai Metro and JNPT projects as well as consolidation of JVs which contributed Rs. 150 Cr (DMRC project) in Q4FY18.
PMPL's EBITDA margin expanded by 111bps YoY to 13.1% owing to higher contribution of international projects, high-margin Civil & Other works and O&M; business. While EBITDA grew by 44.9% YoY to Rs641mn, PAT surged by 48% YoY to Rs299mn, above our estimate. Looking...
ICICI Securities Ltd | Retail Equity Research We attended the Annual Investor Meet of Hindustan Unilever (HUL) on June 6, 2018 where the company reiterated its positive outlook on the long term consumption story of India driven by urbanisation and premiumisation. The key thrusts for the company remain on a) strengthening the core portfolio, b) creating categories for future, c) premiumisation, d) market development both in terms of low penetrated products as well as creating need for future categories and e)...
Minda industries Ltd (MIL) is a diversified auto ancillary supplier, manufacturing products such as switches, horns, lights & others, having a leadership position in switch business with a market share of 67%. Q4FY18 consolidated revenue grew by 53%YoY led by consolidation, switching & other divisions. Standalone revenue grew by 26%YoY. EBITDA margin improved by 68bps on account of operating efficiency and higher capacity utilization in other business. Scaling up the product line in Alloy wheels, Infotainment & Reverse...
We attended the Annual Investor Day of HUL and came back positive on the sustainabilityofgrowthledbyReImaginingHUL.HULiscreatingbuildingblocks for the future which include 1) Premiumisation and upgradation 2) Organisation culture and structure with young leaders 3) strengthening the core portfolio 4) market development for emerging segments 5) sustained expansion of naturals portfolio6)efficienciesinsupplychainanddistributionand7)drivingcostsavings tofuelgrowth.HULisextensivelyusingdigitalinmappingconsumers,innovations,...
This disruption is clearly visible in the sheer level of execution in the herbal portfolio not just limited to Lever Ayush (where the company has exhibited remarkable agility to move from conception to successful execution within a short period time in response to growing demand for Naturals) but also in the acquisition and highly successful scale-up of Indulekha, the launch of herbal variants in most of its key categories, and the launch of global products like Citra and St Ives. The huge importance given to analytics is another key disruption, which could provide the company with a long-term competitive advantage and enable it to overcome the difficulties posed by its relatively large size compared to peers. The high degree of independence given to teams looking into this region and the rapidly evolving local strategy across regional teams (CCBT Country Category Business Teams, 15 mini boards in action) have unlocked the latent potential for entrepreneurship within the company. Even other Asian markets like Indonesia, China and Philippines have 2x, 4x and 5x higher per capita consumption, respectively, than India, indicating huge room for growth.
6 June 2018 Over the last year, TPWR has accelerated the pace of sale of non-core assets. The reported consolidated net debt to equity will decline from 2.7x in FY17 to 2.3x post divestments. TPWR is also evaluating the performance of its overseas power assets for possible consolidation/monetization. CGPL continues engaging beneficiaries for a sustainable resolution of partial under- recovery of fuel cost. CGPL is optimizing fuel cost by blending of low GCV coal, which is available at a steeper discount. CGPL is also in discussion with DISCOMs to sell power beyond minimum commitment of 80% at merchant tariff. The regulated PPA for the Trombay power plant with BEST is valid until March 2019 (after the recent extension by one year). BEST is seeking competitive bids, but, based on the initial results (two rounds have been completed), the competitive price may be higher than regulated supply by Trombay.
Maintain NEUTRAL with a TP of Rs 539 at 2x Mar-20E ABV. Axis Banks FY18 annual report vindicates our cautious stance on the bank, even as the street has begun to get constructive around the resolution of corporate stress in India. We are skeptical on the large pool of assets below investment grade (Rs 90bn).
We retain Buy on Sundaram Finance (SUF) and revise our SOTP based TP upwards to Rs2,240. The upward revision to TP follows a) second successive year of 15%+ YoY growth in AuM b) improved profitability (adjusted PAT grew 16% YoY) and c) superior asset quality (GNPA at 1.29%, industry best). Subsidiaries - housing finance, AMC and general insurance remain profitable and contribute meaningful to overall earnings. Commentaries on growth, earnings and asset quality remain encouraging and we have factored the same into our estimates. Valuations...
Simplex Infrastructure's (SINF) sales increased marginally by 6.3% yoy to Rs16.4bn, below our estimate owing to slower execution in some key projects. SINF's PAT came in at Rs293.6mn, down 56% yoy due to lower execution, higher interest cost (up 11% yoy) and enhanced tax outflow (26.6% tax rate in Q4FY18 v/s 35.8% in Q4FY17). SINF has secured orders worth Rs76.6bn in FY18, thus taking the total order book to...
