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Kolte Patil Developers: KPDL reported its Q4FY22 presales of 0.8msf (-8.2%/-9.3% YoY/QoQ), valued at INR 5bn (-2%/-10.7% YoY/QoQ), with average realisation of INR 6,418 per sq. ft. (+7.2%/-1.1% YoY/QoQ). With this, its FY22 presales volume came in at 2.7msf (+30.3% YoY; exceeding its FY22 guidance of 2.5msf), valued at INR 17.4bn (+44.8% YoY), with average realisation of INR 6,407 per sq. ft. (+10.8% YoY). In value terms, the contribution of non-Pune sales was ~31%, similar to previous quarter. Over the next few quarters, KPDL has a robust launch pipeline of ~5.4msf, with a top line potential of INR 46bn. KPDL is evaluating business development (BD) pipeline with INR 70bn GDV in Pune (65%), Mumbai and Bengaluru (35%). Net D/E reduced further to 0.14x (0.19x as on Dec-21). Given the comfortable liquidity position, KPDL can further acquire land bank, paving the way for accelerated BD activities. We maintain BUY, with a reduced TP of INR 350 (Mar-24E) to factor in higher cost of capital and WACC. Bharat Petroleum Corporation: Our BUY rating on Bharat Petroleum (BPCL), with a target price of INR 375, is premised on (1) recovery in domestic demand for petroleum products, (2) improvement in refining margins over the coming 18 months, and (3) gradual improvement in marketing margins for FY23-24 vis--vis FY22 levels. Q4FY22 EBITDA/APAT, at INR 42.5/21.3bn, were 46/59% below estimates, owing to higher-than-expected operating expenses on account of write-off taken for the Polyol project, higher depreciation and higher tax rates. Reported GRM stood at USD 15.3/bbl (HSIE: USD 12.7/bbl). NHPC: NHPC's revenue...
Deccan Cements: We maintain our ADD rating on Deccan Cements (DCL), with a lower target price of INR 515/sh (6x its Mar-24E EBITDA). The company reported weak performance in Q4FY22 as both volumes and margin contracted YoY on lower sales and rising cost inflation. It reported 13/35/15% YoY revenue/ EBITDA/APAT decline. DCL's 2mn MT capacity expansion is slightly delayed (we expect it to be operational in FY25) due to delay in environmental clearances. Phoenix Mills: Phoenix Mills (PHNX) reported strong revenue/EBITDA/APAT at INR 4.9/2.4/1.05bn, beat at all levels. Retail consumption for the year was INR 46.8bn (excl. Palassio) and was 1.7x FY21 and 70% of FY20/FY19 level. Consumption has bounced back and, in Apr-22, it was 129% of pre-COVID level. The effect of inflation on consumption was not significant; however, price escalation is on the cards from many retailers, which will translate into higher revenue for PHNX. The convergence of leased and trading occupancy shall further push growth by ~8% as multiple tenants under fit-outs move to trading. PHNX acquired the remaining stake in PMC Chennai for INR 9.4bn at a cap rate of ~9%. Within office space, Fountainhead Tower 2 started contributing. Office income was up 22% YoY in FY22. Until now (in FY23), 0.1msf has been leased in this segment. Gross debt inched up INR 740mn sequentially, on account of debt drawn for Indore and Ahmedabad mall construction, which are expected to commence operations by Diwali 2022. We maintain BUY, with an unchanged SOTP of INR 1,364 on account of: (1) slightly better rental...
Deccan Cements: We maintain our ADD rating on Deccan Cements (DCL), with a lower target price of INR 515/sh (6x its Mar-24E EBITDA). The company reported weak performance in Q4FY22 as both volumes and margin contracted YoY on lower sales and rising cost inflation. It reported 13/35/15% YoY revenue/ EBITDA/APAT decline. DCL's 2mn MT capacity expansion is slightly delayed (we expect it to be operational in FY25) due to delay in environmental clearances. Phoenix Mills: Phoenix Mills (PHNX) reported strong revenue/EBITDA/APAT at INR 4.9/2.4/1.05bn, beat at all levels. Retail consumption for the year was INR 46.8bn (excl. Palassio) and was 1.7x FY21 and 70% of FY20/FY19 level. Consumption has bounced back and, in Apr-22, it was 129% of pre-COVID level. The effect of inflation on consumption was not significant; however, price escalation is on the cards from many retailers, which will translate into higher revenue for PHNX. The convergence of leased and trading occupancy shall further push growth by ~8% as multiple tenants under fit-outs move to trading. PHNX acquired the remaining stake in PMC Chennai for INR 9.4bn at a cap rate of ~9%. Within office space, Fountainhead Tower 2 started contributing. Office income was up 22% YoY in FY22. Until now (in FY23), 0.1msf has been leased in this segment. Gross debt inched up INR 740mn sequentially, on account of debt drawn for Indore and Ahmedabad mall construction, which are expected to commence operations by Diwali 2022. We maintain BUY, with an unchanged SOTP of INR 1,364 on account of: (1) slightly better rental...
We maintain our BUY rating with a revised target price of Rs 1,100/share (Rs 1,250 earlier), valuing the stock at 32x FY24E EPS, indicating an upside of 32% from the CMP.
Heidelberg Cement: We maintain our REDUCE rating on Heidelberg Cement (HEIM), with a revised target price of INR 190/share (8.5x Mar-24E EBITDA). In the absence of any major planned expansion for the next three years, we expect subdued volume growth and loss in market share, as other players expand in HEIM's core markets. In Q4FY22, the company's QoQ volume recovery in the peak quarter remained muted at 9% (-1% YoY). Adjusted for prior-period incentives, unitary EBITDA recovered 24% QoQ to INR 751/MT. Since there was no major Capex outgo, the balance sheet continues to be firm: net cash on the books almost doubled YoY in Mar-22 to INR 1.5bn. Karur Vysya Bank: Karur Vysya Bank (KVB) reported a significant beat on our estimates, led by better NIMs and lower credit cost (1.1% annualised). Asset quality improved, with GNPA at ~6%, led by negative net slippages, while the restructured pool remained largely steady at ~2.8% of loans. Overall loan growth (+9% YoY) was driven by commercial (+12%), agri (+13%) and home loans (+9%). KVB is incrementally focused on driving granular growth (LAP, commercial banking, and other retail) and has guided for a 12% loan growth in FY23. With a steady NIM trajectory and improving line of sight on lower credit costs, KVB is well-placed to inch closer to its ~1% RoA target. We trim our FY23/FY24E earnings estimates by 1%/3% to factor in lower loan growth, partly offset by lower credit costs. Maintain ADD with a revised TP of INR63. JK Cement: We maintain our REDUCE rating...
Heidelberg Cement: We maintain our REDUCE rating on Heidelberg Cement (HEIM), with a revised target price of INR 190/share (8.5x Mar-24E EBITDA). In the absence of any major planned expansion for the next three years, we expect subdued volume growth and loss in market share, as other players expand in HEIM's core markets. In Q4FY22, the company's QoQ volume recovery in the peak quarter remained muted at 9% (-1% YoY). Adjusted for prior-period incentives, unitary EBITDA recovered 24% QoQ to INR 751/MT. Since there was no major Capex outgo, the balance sheet continues to be firm: net cash on the books almost doubled YoY in Mar-22 to INR 1.5bn. Karur Vysya Bank: Karur Vysya Bank (KVB) reported a significant beat on our estimates, led by better NIMs and lower credit cost (1.1% annualised). Asset quality improved, with GNPA at ~6%, led by negative net slippages, while the restructured pool remained largely steady at ~2.8% of loans. Overall loan growth (+9% YoY) was driven by commercial (+12%), agri (+13%) and home loans (+9%). KVB is incrementally focused on driving granular growth (LAP, commercial banking, and other retail) and has guided for a 12% loan growth in FY23. With a steady NIM trajectory and improving line of sight on lower credit costs, KVB is well-placed to inch closer to its ~1% RoA target. We trim our FY23/FY24E earnings estimates by 1%/3% to factor in lower loan growth, partly offset by lower credit costs. Maintain ADD with a revised TP of INR63. JK Cement: We maintain our REDUCE rating...
Hindustan Petroleum Corporation: Our ADD rating on Hindustan Petroleum Corporation (HPCL) with a price target of INR 270 is premised on (1) recovery in domestic demand for petroleum products; (2) improvement in refining margins over the coming 18 months; and (3) gradual improvement in marketing margins for FY23-24 vis--vis FY22 levels. Q4FY22 EBITDA, at INR 21bn, was 14% below our estimates, mainly due to higher other expenses; however, APAT of INR 18bn was 38% above estimates due to higher-than-expected other income and lower tax expenses. GRM was reported at USD 12.44/bbl (HSIE: USD 13.5/bbl). PGCIL: PGCIL's asset capitalisation/Capex in Q4FY22 declined 75.5%YoY/44.0% YoY to ~INR21.8bn/INR18.1bn, on a high YoY base. Capitalisation/Capex for FY22 stood at INR207bn/90.6bn, vs. INR214.7bn/INR112.8bn in FY21. Q4 revenue increased 2.8% YoY, led by moderate growth in transmission, marginally offset by 12% decline in telecom segment sales. While EBITDA grew 1.5% YoY, reported PAT was up 22.9% YoY to INR43.2bn (mainly due to a deferred tax adjustment in the quarter). PGCIL declared a final dividend of INR2.25/share, taking the overall FY22 payout to INR14.75/sh (~6.6% yield). It has INR533bn worth of projects in hand and a bidding opportunity for INR318.5bn worth over the next year. We expect capitalisation of INR120bn for FY23 and FY24 each. While the company has floated a bid to procure the one-crore smart meter project and is in talks with states for its installation, there is no concrete progress on it. We tweak our estimates, factoring in the FY22 numbers; we retain ADD with a TP of INR252.
Hindustan Petroleum Corporation: Our ADD rating on Hindustan Petroleum Corporation (HPCL) with a price target of INR 270 is premised on (1) recovery in domestic demand for petroleum products; (2) improvement in refining margins over the coming 18 months; and (3) gradual improvement in marketing margins for FY23-24 vis--vis FY22 levels. Q4FY22 EBITDA, at INR 21bn, was 14% below our estimates, mainly due to higher other expenses; however, APAT of INR 18bn was 38% above estimates due to higher-than-expected other income and lower tax expenses. GRM was reported at USD 12.44/bbl (HSIE: USD 13.5/bbl). PGCIL: PGCIL's asset capitalisation/Capex in Q4FY22 declined 75.5%YoY/44.0% YoY to ~INR21.8bn/INR18.1bn, on a high YoY base. Capitalisation/Capex for FY22 stood at INR207bn/90.6bn, vs. INR214.7bn/INR112.8bn in FY21. Q4 revenue increased 2.8% YoY, led by moderate growth in transmission, marginally offset by 12% decline in telecom segment sales. While EBITDA grew 1.5% YoY, reported PAT was up 22.9% YoY to INR43.2bn (mainly due to a deferred tax adjustment in the quarter). PGCIL declared a final dividend of INR2.25/share, taking the overall FY22 payout to INR14.75/sh (~6.6% yield). It has INR533bn worth of projects in hand and a bidding opportunity for INR318.5bn worth over the next year. We expect capitalisation of INR120bn for FY23 and FY24 each. While the company has floated a bid to procure the one-crore smart meter project and is in talks with states for its installation, there is no concrete progress on it. We tweak our estimates, factoring in the FY22 numbers; we retain ADD with a TP of INR252.
ZF CV India’s (ZFI, formerly WABCO) Q4FY22 operating performance was a beat as EBITDA margin came in at 11.4% (up 240bps QoQ) driven primarily by operating leverage benefits. Receding RM cost pressures ahead and governmental push towards higher infra spends augur well for the company as it has a dominant share in the M&HCV braking solutions market.