We attended the analyst concall organised by Garden Reach Shipbuilders & Engineers’ (GRSE) to discuss the company’s Q4FY23 performance and outlook on the future.

Greenlam Industries: We maintain our ADD rating on Greenlam Industries, with a revised target price of INR 395/share (16/35x its Mar'25E consolidated EBITDA/APAT). In Q4FY23, it reported strong 15/49/80% YoY growth in consolidated revenue/EBITDA/APAT. It is driven by a robust 17% volume uptick and subsequent op-lev gains boosting consolidated EBITDA margin by 320/300bps YoY/QoQ to 13.9%. We like Greenlam for its leadership positioning in laminates. The upcoming laminate expansions should drive a consolidated volume CAGR of 17% during FY23-25E, in our view. While plywood/ particle board will boost revenues from FY24/FY25 onwards respectively, huge Capex should keep net debt to EBITDA elevated at ~2-3x during FY23-25E. Ahluwalia Contracts: Ahluwalia Contracts (AHLU) reported revenue/EBITDA/APAT of 8.6/1.1/0.8bn, (missing)/beating our estimates by (17.7)/9.5/10.8%. While surpassing its FY23 order inflow (OI) guidance of INR 45bn with an OI of INR 50.6bn, the order book (OB) as of Mar'23 stood at INR 81.6bn. With an OI of INR 37.5bn in FYTD24, the OB as of date stands at ~INR 120bn (~4.2x FY23 revenue). The OB is well-diversified, providing a natural hedge from a slowdown in any particular business/geography segment. AHLU guided for FY24 revenue to grow by 20% YoY, with EBITDA margin (excl. other income) at ~11%+ and an OI of INR 20-25bn in the remaining part of the year. Given robust inflows, better margins and pick-up in execution, we recalibrate our FY24/25E EPS higher and increase the multiple to 14x from 13x. We maintain BUY on the stock, with an increased TP of INR 700/sh. Repco Home Finance: REPCO's Q4FY23...

There was sequential recovery in almost all segments of Indigo in Q4FY23 and Apr May’23 are also strong months. We attribute this improvement to likely success of ‘Strategy 2.0’ as tier 1 and 2 cities are growing at ~100% higher than tier 3 and 4 cities and rural markets.

Kolte Patil Developers: KPDL reported the highest-ever annual presales of 3.3msf (+21% YoY), valued at INR 22.3bn (+28% YoY), with an average realisation of INR 6,817 per sq. ft. (+6.4% YoY). 49% of the sales came from sustenance inventory. Its flagship project Life Republic (LR) contributed c.50% towards presales. Pune market contributed 80% towards the sale which KPDL is expecting to bring down to 70% by FY25. For FY24, KPDL expects presales of INR 28bn on the back of INR 53bn worth of project launches with an area of 7.3msf (3msf to be launched in H1FY24). Around 30-40% of FY24 presales are expected to come from sustenance inventory. For FY23, KPDL added INR 39bn worth of projects and, for FY24, it expects to add INR 105bn worth of projects, of which INR 25bn worth was added in May'23. This includes two society redevelopment projects in MMR which are expected to be launched by FY24-end. Projects worth INR 35-40bn in the BD pipeline are in the advanced stages of discussion. KPDL expects to fund its GDV addition via internal accrual and from the INR 2.1bn received from Marubeni Corp towards its investment in the Pimple Nilakh project. Also, its comfortable liquidity position with net D/E at 0.11x (board approval of 0.50x) paves the way for accelerated BD activities. We maintain BUY, with an unchanged SOTP-based TP of INR 380. Radico Khaitan: Radico's Q4FY23 print was weak, with EBITDAM at 9.5% (a 30-quarter low) and PAT falling by 20% despite sustained P&A outperformance. Net sales grew by 2%...

Brigade Enterprises: Brigade Enterprises Ltd (BEL) reported the highest-ever annual presales of 6.3msf (+35% YoY), valued at INR 41bn (+36% YoY). This was on the back of robust launches of 5.5msf (3.8msf in FY22), with 3.02msf launched in Q4FY23. Over 60% of the residential presales came from new launches in Q4FY23. In FY24, BEL plans to launch 7.5msf in the residential segment, with a GDV potential of INR 60bn, most of which will be launched in Q3/Q4FY24. 25% of these launches will be from the Mount Road Chennai project (i.e. TVS land). The average price hike stood at 7%, excluding newly-forayed plotted development presales. In terms of BD, BEL added INR 50bn worth of GDV with an area of 8.7msf. The retail segment saw healthy rental of INR 1.6bn (+60% YoY) with footfalls increasing by 106% YoY. The weighted average rental also increased by 13% YoY. Within the office segment, non-SEZ assets are all leased out with muted leasing in the SEZ assets i.e. WTC Chennai, Tech Garden and Financial Center, GIFT. Given BEL's strong cash position of INR 17bn, a robust business development pipeline, and a healthy balance sheet, we remain constructive. We reiterate BUY, with an unchanged TP of INR 632/sh. TTK Prestige: TTK Prestige's Q4FY23 print disappointed on all counts with revenue/EBITDA/PAT declining by 13/25/25% YoY respectively. Domestic revenue fell 11% YoY on account of (1) demand softness due to an inflationary environment (2) consumer wallet share moving away from kitchen appliances and (3) pricing-led competitive intensity (more so in the mid-economy segment)....

Brigade Enterprises: Brigade Enterprises Ltd (BEL) reported the highest-ever annual presales of 6.3msf (+35% YoY), valued at INR 41bn (+36% YoY). This was on the back of robust launches of 5.5msf (3.8msf in FY22), with 3.02msf launched in Q4FY23. Over 60% of the residential presales came from new launches in Q4FY23. In FY24, BEL plans to launch 7.5msf in the residential segment, with a GDV potential of INR 60bn, most of which will be launched in Q3/Q4FY24. 25% of these launches will be from the Mount Road Chennai project (i.e. TVS land). The average price hike stood at 7%, excluding newly-forayed plotted development presales. In terms of BD, BEL added INR 50bn worth of GDV with an area of 8.7msf. The retail segment saw healthy rental of INR 1.6bn (+60% YoY) with footfalls increasing by 106% YoY. The weighted average rental also increased by 13% YoY. Within the office segment, non-SEZ assets are all leased out with muted leasing in the SEZ assets i.e. WTC Chennai, Tech Garden and Financial Center, GIFT. Given BEL's strong cash position of INR 17bn, a robust business development pipeline, and a healthy balance sheet, we remain constructive. We reiterate BUY, with an unchanged TP of INR 632/sh. TTK Prestige: TTK Prestige's Q4FY23 print disappointed on all counts with revenue/EBITDA/PAT declining by 13/25/25% YoY respectively. Domestic revenue fell 11% YoY on account of (1) demand softness due to an inflationary environment (2) consumer wallet share moving away from kitchen appliances and (3) pricing-led competitive intensity (more so in the mid-economy segment)....

Sudarshan Chemical: We maintain REDUCE on Sudarshan Chemical (SCIL), with a price target of INR 454 (WACC 11%, terminal growth 3.5%). SCIL has product offerings similar to those of the global players but has been unable to gain market share, post the exit of the global majors. The stock is trading at 19x FY25E EPS, which we believe is contextually high (RoE of 14/17% for FY24/FY25E). Q4 EBITDA/APAT were 89/579% above our estimates, mainly owing to a 26% rise in revenue, lower-than-anticipated raw material cost and tax rate. J. Kumar Infraprojects: JKIL reported an operationally weak quarter, with revenue/EBITDA/APAT at 11.3/1.6/0.7bn, missing our estimates on all fronts. It received orders worth INR 26.5bn in FY23 (~53% of INR 50bn inflow guidance), taking the OB as of Mar'23 to INR 118.5bn (~2.8x FY23 revenue, ex of L1 INR 4.7bn). JKIL guided for FY24 revenue to grow by 15% YoY with EBITDA margins at 14-15%. On order inflow, (OI) it guided for INR 50bn. Gross debt increased marginally in Q4FY23 to INR 5.2bn as of Mar'23 vs. INR 4.8bn as of Dec'22, leading to a D/E of 0.22x. FY24 capex guidance stands at INR 1.5bn. Further, it guided for debt levels and NWC days to remain at FY23 levels during FY24. With ~62% utilization of fund-based limits, the company is well placed to incur any additional capex required. We maintain our ADD rating on the stock, with an unchanged target price of INR 351/sh (8x Mar-25E EPS). Ashok Leyland: Ashok Leyland's Q4 PAT, at INR 6.9bn, was ahead...

Sudarshan Chemical: We maintain REDUCE on Sudarshan Chemical (SCIL), with a price target of INR 454 (WACC 11%, terminal growth 3.5%). SCIL has product offerings similar to those of the global players but has been unable to gain market share, post the exit of the global majors. The stock is trading at 19x FY25E EPS, which we believe is contextually high (RoE of 14/17% for FY24/FY25E). Q4 EBITDA/APAT were 89/579% above our estimates, mainly owing to a 26% rise in revenue, lower-than-anticipated raw material cost and tax rate. J. Kumar Infraprojects: JKIL reported an operationally weak quarter, with revenue/EBITDA/APAT at 11.3/1.6/0.7bn, missing our estimates on all fronts. It received orders worth INR 26.5bn in FY23 (~53% of INR 50bn inflow guidance), taking the OB as of Mar'23 to INR 118.5bn (~2.8x FY23 revenue, ex of L1 INR 4.7bn). JKIL guided for FY24 revenue to grow by 15% YoY with EBITDA margins at 14-15%. On order inflow, (OI) it guided for INR 50bn. Gross debt increased marginally in Q4FY23 to INR 5.2bn as of Mar'23 vs. INR 4.8bn as of Dec'22, leading to a D/E of 0.22x. FY24 capex guidance stands at INR 1.5bn. Further, it guided for debt levels and NWC days to remain at FY23 levels during FY24. With ~62% utilization of fund-based limits, the company is well placed to incur any additional capex required. We maintain our ADD rating on the stock, with an unchanged target price of INR 351/sh (8x Mar-25E EPS). Ashok Leyland: Ashok Leyland's Q4 PAT, at INR 6.9bn, was ahead...

Sudarshan Chemical: We maintain REDUCE on Sudarshan Chemical (SCIL), with a price target of INR 454 (WACC 11%, terminal growth 3.5%). SCIL has product offerings similar to those of the global players but has been unable to gain market share, post the exit of the global majors. The stock is trading at 19x FY25E EPS, which we believe is contextually high (RoE of 14/17% for FY24/FY25E). Q4 EBITDA/APAT were 89/579% above our estimates, mainly owing to a 26% rise in revenue, lower-than-anticipated raw material cost and tax rate. J. Kumar Infraprojects: JKIL reported an operationally weak quarter, with revenue/EBITDA/APAT at 11.3/1.6/0.7bn, missing our estimates on all fronts. It received orders worth INR 26.5bn in FY23 (~53% of INR 50bn inflow guidance), taking the OB as of Mar'23 to INR 118.5bn (~2.8x FY23 revenue, ex of L1 INR 4.7bn). JKIL guided for FY24 revenue to grow by 15% YoY with EBITDA margins at 14-15%. On order inflow, (OI) it guided for INR 50bn. Gross debt increased marginally in Q4FY23 to INR 5.2bn as of Mar'23 vs. INR 4.8bn as of Dec'22, leading to a D/E of 0.22x. FY24 capex guidance stands at INR 1.5bn. Further, it guided for debt levels and NWC days to remain at FY23 levels during FY24. With ~62% utilization of fund-based limits, the company is well placed to incur any additional capex required. We maintain our ADD rating on the stock, with an unchanged target price of INR 351/sh (8x Mar-25E EPS). Ashok Leyland: Ashok Leyland's Q4 PAT, at INR 6.9bn, was ahead...

Realisations led growth in Q4 while capacity constraints restricted volume gains (to 1% YoY)

Garden Reach Shipbuilders & Engineers’ (GRSE) Q4FY23 EBITDA performance was below street estimates by ~50.5%. Key highlights: 1) revenues rose 10.7% YoY largely on the back of delivery of two ships (cargo-cum-ferry vessel for the government of Guyana and fast patrol vessel {FPV} for Indian Coast Guard), and P-17A advanced frigates entering their peak billing phase.

India Cements (ICEM) has posted an EBITDA loss for the third consecutive quarter. EBITDA loss in Q4FY23 stood at Rs445mn vs a loss of Rs695 in Q3FY23 and a profit of Rs615mn in Q4FY22. While volumes rose ~5% YoY, weak cement prices and elevated fuel cost got the better of ICEM.

Somany Ceramics: We maintain BUY on Somany Ceramics (SOMC), with a revised target price of INR 730/share (12x Mar-25E consolidated EBITDA, implying 26x P/E). In Q4FY23, SOMC reported healthy 9/9% YoY/QoQ tiles volume growth. Even margin expanded 246/77bps QoQ/YoY to 9% on reducing gas prices. It expects to deliver 10%+ volume growth in FY24E (benefits of its strengthening distribution) and 9.5-10% EBITDA margin (gas price tailwinds and favourable product mix). It will commission a large-sized tiles plant in Gujarat (4.5MSM capacity in H1FY24E end), which will also bolster product mix and margin. Shree Cement: We maintain our REDUCE rating on Shree Cement, with an unchanged SOTP target price of INR 22,600/share. In Q4FY23, Shree reported 10/10% YoY/QoQ volume growth. Cement NSR remained flat QoQ. Op-lev gains, increased green power usage, and higher contribution of non-cement revenue drove blended unit EBITDA expansion by INR 130/MT QoQ to INR 1,101. Shree is targeting ~13% volume growth in FY24 and it is also confident of margin expansions, mainly due to energy cost reduction. Shree would be expanding its capacity to 56/80mn MT by FY25/2030E (vs 46mn MT in FY23).

The Union ministry of commerce is in talks with regulators and other departments to put in place systems that will level the field between exports through e-commerce and traditional channels, when it comes to tax refunds.

While the company has taken the right steps to improve share of ODM, initiated cost saving measures, we believe weaker demand for white goods and durables is likely to impact revenue growth in near term.

Shree Cement’s (SRCM) Q4FY23 EBITDA (in line) dipped 2% YoY despite 10% volume surge. Similarly, for FY23, EBITDA was down 19% YoY despite 15% volume jump. Cement industry’s inability to pass on the impact of fuel cost surge (due to high competitive intensity) to consumers takes the blame for the same.

Crompton Consumer: Crompton's Q4FY23 print surprised positively, largely on account of a decent ECD performance in a challenging environment. ECD revenue grew by 8% YoY (Havells/Orient dipped 14/20% YoY). ECD growth was led by appliances (+43%) and pumps (+15%) while fans were flat (premium fans +24% BLDC fans up 2.5x). While maintaining its fans' market share in the mass segment, Crompton has gained market share in premium fans (#2 in BLDC). Lighting remained weak due to subdued B2B performance. The company is focusing on fixing white spaces by taking various corrective steps like (1) higher brand investments (2) innovation and R&D (3) expanding GTM reach (4) new brand architecture in pumps and (5) dedicated sales team in lighting. Current valuation is low (ECD business is valued at <INR 140bn for EBIT of INR 8bn in FY23 vs. Havells' implied ECD value of c.INR 200bn for EBIT of INR 4bn). If Crompton sustains a healthy trend for the ECD business, the valuation gap will narrow. We maintain our estimates and value the stock at 35x on Mar25E EPS to derive a TP of INR 400. Maintain BUY. JK Lakshmi Cement: We maintain our BUY rating on JK Lakshmi Cement (JKLC) with a lower target price of INR 815/share (8x Mar-25E consolidated EBITDA). In Q4FY23, JKLC reported a subdued 3% YoY volume growth and even the EBITDA margin recovered a modest INR 40 per MT QoQ to INR 687. However, JKLC is confident of ramping up the margin to INR 800 per MT in FY24E and towards INR...

Crompton Consumer: Crompton's Q4FY23 print surprised positively, largely on account of a decent ECD performance in a challenging environment. ECD revenue grew by 8% YoY (Havells/Orient dipped 14/20% YoY). ECD growth was led by appliances (+43%) and pumps (+15%) while fans were flat (premium fans +24% BLDC fans up 2.5x). While maintaining its fans' market share in the mass segment, Crompton has gained market share in premium fans (#2 in BLDC). Lighting remained weak due to subdued B2B performance. The company is focusing on fixing white spaces by taking various corrective steps like (1) higher brand investments (2) innovation and R&D (3) expanding GTM reach (4) new brand architecture in pumps and (5) dedicated sales team in lighting. Current valuation is low (ECD business is valued at <INR 140bn for EBIT of INR 8bn in FY23 vs. Havells' implied ECD value of c.INR 200bn for EBIT of INR 4bn). If Crompton sustains a healthy trend for the ECD business, the valuation gap will narrow. We maintain our estimates and value the stock at 35x on Mar25E EPS to derive a TP of INR 400. Maintain BUY. JK Lakshmi Cement: We maintain our BUY rating on JK Lakshmi Cement (JKLC) with a lower target price of INR 815/share (8x Mar-25E consolidated EBITDA). In Q4FY23, JKLC reported a subdued 3% YoY volume growth and even the EBITDA margin recovered a modest INR 40 per MT QoQ to INR 687. However, JKLC is confident of ramping up the margin to INR 800 per MT in FY24E and towards INR...