Low margin guidance dents profitability; maintain SELL USD revenue grew 1.8% QoQ tad below our estimates; 0.6% QoQ in CC terms. EBIT margin remained flat QoQ at 24.2% despite negative impact of wage hike offset by operational efficiencies. INFO slashes its revenue guidance to 6%-8% (CC terms) which translates into a CAGR of 1.6%-2.3% over four quarters. The management has lowered its EBIT margin guidance in the range of 22%-24% for FY19 as compared to 23%-25% for FY18 due to investment in digital services. We upgrade our earnings estimates by 4%...

PTC India Financial Services (PFS) has been a financier to small and medium power projects. Consistent focus on small and medium power projects, especially renewable segment has led to healthy growth in advances at 45% CAGR in FY12-16. Asset quality had been resilient with near zero NNPA and marginal GNPA till Q3FY15. However, a slowdown in the power sector and slippage from restructured accounts led to a rise in NPA. Given the current business environment plagued by a slowdown in investment activity and increasing competition from banking peers,...

The earnings of pharmaceutical companies under our coverage universe in 4QFY18 are expected to show YoY/QoQ growth of 48.8%/2.0%, respectively. The US business will continue to be a drag for most companies under our coverage, except for Natco Pharma which is likely to post life-time high earnings driven by the full-quarter impact of Copaxone and Tamiflu suspension generics. Aurobindo Pharma: The US business of the company will be under pressure as it witnesses the full-quarter impact of competition in Renvela generic and in addition compliance-related problems of the injectable plant will...

Sun pharma received threeobservations post USFDA visit of the Halolplant in February 2018. The three observations are neither linked to data integrity nor arelinkedtoanyrepeatobservations.Thebriefofthoseobservationsare: Observation 1: Separate or defined areas to prevent contamination or mix upsaredeficientregardingoperationsrelatedtoasepticprocessingofdrugs...

NIIT Tech reported steady 2.6%/12.4% QoQ growth in revenue/PAT in Q3FY18. New management based across geographies is expected to result in client additions across the segments. Management has indicated strong deal pipeline in coming quarters. We expect steady double digit revenue growth in FY19 on account of growth across BU's, strong executable pipeline and large order wins. All the positives have already factored in price, hence we recommend to sell the stock with target price of INR 740. Conference call highlights Management indicated Q4FY18 and FY19 to report strong double digit growth on the back of strong order intake and deal pipeline. NIIT Tech now has a decentralized presence with one EVP Europe,...

Cox & Kings recently declared its financial results for Q3FY18 and 9MFY18. The growth was driven by Meininger operations which witnessed healthy utilisations at the newly opened facilities. Segment wise results: Leisure India, Leisure International, Education and Meininger reported...

ICICI Securities Ltd | Retail Equity Research Pitti Laminations (Pitti) reported a steady Q3FY18 performance, with net sales for the quarter at | 77.3 crore, up 0.5% YoY. Recovery in sales was stalled this quarter (vs. H1FY18, up 41% YoY) due to loss of production days (30) on account of shifting of manufacturing base from Hyderabad, Pune to its new facility in Aurangabad, Maharashtra EBITDA in Q3FY18 was at | 11.2 crore with corresponding EBITDA margins at 14.5% and PAT at | 2.7 crore vs. | 1.9 crore in Q3FY17...

Ambuja Cements' (ACEM) result was above estimates with EBITDA at Rs4.4bn against our estimate of Rs3.8bn and EBITDA/tonne at Rs750 against our estimate of Rs655, led by lower opex. Key surprise was sequential decline in other expenses. Sales volume was up 15.3% yoy at 5.87mt, supported by low base (volume declined 7.8% in Q4CY16). Realization grew by 3.5% yoy to Rs4,450/tn (vs. estimated Rs4,451/tn). EBITDA/tn stood at Rs750 vs. Rs586/Rs617 in Q4CY16/Q3CY17. with clinker capacity of 3.1mt (phase I of 1.7mt clinker unit by H1CY20). We would await more clarity on this project, as it is being talked about for the last few years....

Thermax Ltd (TMX) is a leading energy and environment solutions provider. They offer integrated innovative solutions in the areas of heating, cooling, power, water & waste management, air pollution control and chemicals ....

Sector: Banking /Small-Cap | Earnings Update 3QFY18 Background: Karur Vysya Bank (KVB) is one of the mid-sized banks in the private sector space, operates through a network of 773 branches and about 1,777 ATMs. KVB's business - 82% is concentrated in South India with about 73% of its branch footprint in Tamil Nadu and Andhra Pradesh. As of 3QFY18 the total...

We maintain SELL on KPDL with NAV based TP to Rs 312/sh. Kolte Patil Developers Ltd. (KPDL) delivered strong 3QFY18 revenue growth of 17.8% YoY, lead by year end sales promotions in key projects viz. Life Republic, Ivy Estate, Western Avenue & Downtown. KPDL has achieved 0.6mn sqft of pre-sales during 3QFY18 and guided for sustaining the pre-sales momentum in Q4FY18E.

GE T&D;'s Q3 order inflow was lower 30% YoY to Rs 7.8 bn and order backlog was down 12% YoY to Rs 72 bn. Company won major orders from Sterlite Power and Gujarat Transco during Q3.

In view of the termination of Punjab e-governance contract, uncertainty regarding receivables and no near-term growth visibility, we maintain our SELL rating with a TP of Rs 170, based on 20x Dec-19E EPS. BLS International posted a mixed set of numbers in 3QFY18, with beat on revenue, but miss on margins (-450bps QoQ to 18.7% vs our est. of 22.7%). Revenue stood at Rs 2.03bn, up 8.8% QoQ, led by 9.5% QoQ rise in the Visa segment (~75% of rev). Growth in visa business was led by pick-up in Spain visa applications and contribution from newer contracts (Afghanistan). The Punjab e-governance revenue stood at Rs 0.50bn (~25% of rev).

Operational performance under pressure, Lower gross margin on lower Taro marginandpriceerosion:SunPharma(SUNP)reportedcoresalesofRs65.9bn (flatQoQ)withanadj.EBITDAofRs13.9bn(adj.EBITDAmargin21.2%)andadj. PATofRs8.8bn(down4%QoQ)inQ3FY18,againstourestimatedsales,EBITDA andPATofRs64.1bn,Rs11.7bnandRs6.6bnrespectively.Theadj.grossmargin declined by330bps QoQ while adj.EBITDA margin was up 120bps QoQ. While managementdeclinedtoclarifymuchonmarginvariability,webelievethatone offinventorywriteoffduetowithdrawalofANDAsalongwithhigherCOGSin...

Dispose its Strategic Engineering Division (SED), part of its standalone operations. It generated EBITDA of ~INR600m in FY17. Sell its investment in Tata Ceramics, ~57% subsidiary. It had a carrying value of INR91m, revenue of ~INR464m and PAT loss of INR5.9m in FY17. Sell investment in Tata Projects, ~48% associate. It has a carrying value of ~INR4.9b, revenue of ~INR60b and PAT of ~INR1.3b in FY17. Sell stake in Panatone Finvest, ~39% associate that owns ~88m shares in Tata Communication (TCOM). At TCOM's CMP, the attributable value is ~INR23b

In addition to a weak operational performance, higher interest expense (up 8% YoY) coupled with increase in depreciation (up 19% YoY) led DCI to report a loss of | 22.5 crore (I-direct estimate: | 2.1 crore) Sluggish YTD performance; revival to take some time DCI posted five-year low revenues of | 119.9 crore (vs. a normal run rate of | 140-160 crore. For 9MFY18, revenues de-grew 6% YTD to | 428.4 crore vs. | 455.7 crore in 9MFY17. However, benefiting from lower crude prices in FY18, EBITDA for the same period grew marginally by 6% YoY...

Sobha reported a net profit of Rs534mn for 3QFY18, up 63.8% YoY and 6.2% QoQ. Sales volume stood at 0.93mn sqft in 3QFY18, an increase of 8% QoQ and 52% YoY. Sector: Real Estate Despite the rise in sales, we still have concerns relating to: 1) Debtors registering a CMP: Rs561 16% rise on YoY basis. 2) Gross debt at Rs24,190mn, up 12% YoY and 9% since March 2017, and interest costs rising 36.8% YoY, thereby negatively impacting the bottom- Target Price: Rs363 line. 3) Free cash flow at Rs(444mn) in 3QFY18 declining from Rs26mn on YoY basis and rising from Rs(2,585mn) in 2QFY18. We have rolled forward our NAV-based target Downside: 35%...

VATW Q3FY18 revenues at Rs8.64bn were above our estimates, however EBITDA marginsat9%(down208bpsYoY)belowourestiamtes.Marginswereimpactedby higher operating cost and delay in billing due regulatory changes post GST implementation. GST has impacted debtor collection cycle & billing, especially in domesticmunicipalordersastheyaresubjecttotaxationunliketheearlierregime, resulting in increased working capital. However situation is improving & expects normalisationtoreturnbyQ4FY18.ManagementisfocusingonMiddleEast,Africa &LATAMregionsasitseeshugeopportunityonSTPs/desalinationfrontfundedby...

We maintain Sell rating on GlaxoSmithKline Pharma (GSK) and revise our TP to Rs1,850 (earlier Rs1,525) based on 24x March'20E EPS of Rs77.1. GSK's Q3FY18 results were below our and consensus estimates. GSK revenue was flat, EBIDTA margin improved 1,270bps to 20.1% and net profit grew 156% YoY. GSK's major brands grew by high single digit to double digit during the quarter. That said, the company has a strong presence in the vaccines segment and is likely to derive growth from the same. Key risks to our assumptions include faster-thanexpected growth in the domestic market and higher growth of its flagship brands. We recommend a switch to other pharma companies, Abbott India or...

Thermax (TMX) operational performance was below our expectations. While revenues increased by 18% yoy aided by strong order backlog, the EBITDAM declined by 72bps to 8.5% impacted by higher than expected rise in steel prices. APAT was up by 9%. While the order inflows increased by 19% yoy to Rs14bn (up by 45% for 9MFY18), the order backlog grew by 27% to Rs56 bn providing decent revenue visibility for FY19E and FY20E. However, the increasing steel prices could limit profit growth as most of the fixed price international orders were booked ~2-3 quarters ago. Thermax Babcock & Wilcox (TBW) JV has ceased operations and is in the process of...