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PI continued its outperformance in Q1'21 with topline/EBITDA/APAT growth of 41%/51%/44% driven by solid 76% growth in domestic business. The management continued to maintain positive commentary across CSM and domestic segments driven by stable demand outlook, continuous rise in new enquiries, entry in pharma value chain and ramp up of molecules & facilities commercialization. It plans to fully deploy QIP proceeds of Rs20bn in the next 5-6 quarters and expects to earn the existing 18-20% RoE over a period of...
The company's growth in COVID business, strong brand recall, gradual unlock of cities should support growth in upcoming quarters. Given the limited upside potential we downgrade our rating to HOLD with a revised target price of Rs. 1,995 based on 53x FY22E EPS. COVID-19 tests contribute to the top line DLPL's Q1FY21 top line went down 20.6% YoY to Rs. 266cr severely impacted by COVID-19 and subsequent lock down impacting the revenue in April (-61% YoY) and May (-12% YoY), however some respite was seen in June (+14% YoY) when cities were...
EBITDA margin improved by 220 bps to 17.7% despite decline in gross margins (240bps YoY) mainly due to reduction in ad-spend (4.6% of sales Vs 8% YoY). Excluding exceptional spend of Rs5cr (Covid donation) EBITDA margin was 18.8%. However, the company expects the EBITDA margins to be in the range of 15%-16% for FY21E considering the current uncertain situation and likely increase in ad-spend in the coming quarters. Focus on lower unit packs which do not have any trade schemes (higher margins) and benign raw materials will support margins. The company has decided to opt for concessional income tax rate from FY27 onwards once the benefits under 80IE are utilised (till FY26).We expect PAT growth of 16% CAGR over FY19-22E....
UPL Ltd. is a global agriculture solutions company engaged in the agrochemicals and industrial chemicals business with manufacturing sites across the world. Through recent expansion, the company has become a...
Peak net debt, capex spends behind us; FCF in sight ATL's net debt levels ballooned from | 10,000 crore combined in FY16-20. As a result, the company generated negative FCF in each of the past four years. However, with majority of Andhra Pradesh greenfield capex (| 2,200 crore out of | 3,800 crore as of FY20) now behind us, we expect ATL to utilise future cash flows to lower debt levels and thereby improve net profitability. Our estimates place the company turning...
Piping segment demand recovery was led by semi urban, rural areas that were less impacted by pandemic. Astral recovered ~90% of piping sales volume in May-July 2020 despite nominal sales from metro regions. Further, opening of metro regions coupled with its plan to enhance dealer networks across semi urban and rural regions would help in a faster sales recovery from H2FY21E onwards. On the adhesive side, the demand recovery was impressive post ease in restrictions with ~26% sales growth in July 2020. Low base and completion of its distribution realignment strategy yielded a...
US (44% of FY20 revenues) grew at ~12% CAGR in FY16-20 backed by aggressive filings, product launches. Launch of authorised generics also contributed to overall growth. US pipeline (cumulative) consists of 390+ filed ANDAs, 95 pending final approvals. However, resurfacing of cGMP issues at Moraiya, imminent slowdown in base are main near term...
In the current volatile times, the company witnessed healthy growth largely due to favourable demand conditions in dishwashing & household insecticides due to change in consumption pattern (higher sales of in-home' consuming products & heightened cautiousness for mosquito related disease). Moreover, with stronger demand from rural India due to reverse migration & increased government's spends, the company was able to leverage that macro factor by driving growth from smaller SKUs of | 5 & | 10 across brands. Moreover, the company has added more sub-stockist...
Sales revival in decorative segment post easing of restrictions After a washout April 2020 due to lockdown, KNPL saw a demand revival in decorative paint category in May-June 2020 with double digit volume growth. Strong volume traction in decorative segment was led by repainting/maintenance related demand from tier II/III/IV cities. However, industrial paint volume offtake continued to be under pressure in Q1FY21 on lower demand from key clients. While intermediary lockdowns may delay recovery process in near term, gradual unlocking of economy would help...
