Sell

4Q revenue was weaker than estimate though margins were better. FY26 revenue declined 6.5% in CC, the weakest in our coverage

We revise our FY28E EPS estimate by +7.8% accounting for improvement in execution and normalization in provision. BHEL delivered a strong Q4FY26 performance with revenue growth of 36.9% YoY, driven by robust execution of its order backlog, while EBITDA margin expanded 499bps YoY to 14.2% supported by lower other expenses. The Power segment remained the key growth driver, with ~54% YoY revenue growth backed by execution of a healthy order book of ~INR1.7trn, while order book further strengthen by recent key order win of INR135bn EPC package (3800MW) from NTPC in Q4. BHEL has successfully commissioned 8.9GW of power capacity in FY26...

Quarterly Update Q4FY26

Railtel Corporation of India’s (Railtel) Q4FY26 net profit grew 24.9% YoY, driven by telecom services, while project revenue growth did not translate into EBIT growth as margin continues to shrink.

PCBL’s Q4FY26 print was good with a rise in domestic carbon black volumes and stabilised gross profit/kg. It remains hopeful of high single-digit volume growth and double-digit EBITDA growth for carbon black in FY27, aided by US tariff reductions, higher power realisation and cost reductions.

Indus Towers’ (Indus) Q4FY26 EBITDA print was impacted by multiple one-offs and higher seasonal maintenance costs; therefore, reported EBITDA growth appeared soft.

Kajaria Ceramics (KJC) reported 12.4% YoY consol. revenue growth in Q4FY26, as tiles volume grew 11.3% YoY on a low base (15.7% QoQ; 7-year CAGR of 5.8%).

NACL reported a weak Q4 with EBITDA at Rs23.5bn (+7.8% QoQ), 14.7% below consensus; aluminium performance improved on higher prices, while alumina EBITDA declined due to lower alumina sales during the quarter.

BAF reported a good quarter in terms of growth, profitability, and credit cost, with PAT of Rs54.6bn (attributable to shareholders), above our estimates and broadly in line with street estimates.

We downgrade CEAT to REDUCE from Buy while cutting our target price by ~27% to Rs3,600 from Rs4,900, valuing the stock at 20x Mar-28E EPS. CEAT posted a strong Q4, with revenue growth of 18% YoY driven by healthy traction across the replacement, OEM, and international segments.

AU SFB maintained its growth acceleration in 4Q which, coupled with better CoF, led to further margin expansion. This, along with improving asset quality and thus lower credit cost, led to a ~9% earnings beat, with Rs8.3bn PAT/1.8% RoA.

India Cements (ICEM) reported EBITDA of INR1.6b (~37% beat) in 4QFY26 vs. INR11m in 4QFY25. EBITDA beat was led by all-round operating strength. EBITDA/t increased ~62% QoQ to INR498 (vs. est. INR396).

4QFY26 came in weaker than our estimate driven by weakness in TMT and late booking of a mega deal

est: INR19.2bn) vs INR14.5bn in Q3FY26 and INR3.6bn in Q4FY25. Throughput fell to with EBITDA coming in below estimates at INR17.8bn, vs INR27.8bn in Q3FY26 (PLe: which included a forex loss of INR6.1bn. PAT declined to INR1.2bn (PLe: INR16.7bn, cons 4.4mmt vs 4.7mmt in Q3FY26. MRPL met its target to open 250 retail outlets in FY26,...

Cyient’s (CYL) DET business reported 4QFY26 revenue of USD163m, down 2.4% QoQ in constant currency (CC) terms, below our estimate of 2.1% growth.

TechM posted an in-line operating performance in Q4. Revenue grew 0.9% QoQ to USD1.63bn (up 0.6% CC), a tad ahead of our estimates.

TATA Elxsi (TELX) reported Q4FY26 revenue growth and margin in line-with I-Sec est. Growth was led by traction from: OEMs, stabilisation of automotive demand and a recovery in the media and communication vertical; and continued traction in EU.

4QFY26 tad weaker than estimate on both revenue and margins. US$2bn revenue run rate is likely in 4QFY27. Still be a growth leader

HCLT explicitly states FY27 is weaker than FY26. Due to (1) geopolitics and (2) Gen AI deflation. FY27 acceleration narrative fails first test

HCLT's Q4 performance was significantly below expectations, with revenue declining 3.3% QoQ CC versus our estimate of 2.0% and consensus of 1.6%. The miss was driven by weakness in the Services business, impacted by cancellation of discretionary programs in select telecom clients and termination of two SAP modernization engagements, which are expected to weigh on FY27E revenue by ~50 bps. Beyond these specific headwinds, subdued discretionary spending amid geopolitical uncertainty, the near-term deflationary impact of AI, and continued softness in the Software segment are likely to weigh on growth. Consequently, FY27E organic revenue...