Broker Research reports: Sell reports
for all reports
Latest broker research reports
with sell recommendations along with target prices forecast and upside.
Browse thousands of reports and search by company.
Continuing high growth momentum with margin expansion: Hold (Target upgrade) GMM Pfaudler Ltd (GMM), for Q3FY20, reported a strong set of numbers. On standalone basis revenue grew by 29.4% YoY to INR 1366mn (est INR 1364mn). EBITDA showed growth of 66.4% YoY to INR287mn (est INR263mn) with 466bps YoY improvement in margin from 16.3% in Q3FY19 to 21% in Q3FY20, due to favorable product mix mainly led by Glasslined business ,where EBIT margin improved by 366bps on YoY basis with 67% contribution in standalone revenue. Moreover, Heavy engineering and proprietary products business has also supported growth momentum with 52% growth in revenue and 18.9% EBIT margin (686bps YoY improvement ) in Q3FY20. As per the management, heavy engineering to add lot of growth on the back of healthy order book till Q2FY21 and expect further improvement in margins going forward. Current order book breakup includes 50% in Glass lined, 30% in heavy engineering and 20% in proprietary products. Net profit surged by 77.4% to INR 194mn (est. INR192mn) due to operationally strong performance and lower tax expense (22.8% vs 32.4%)....
For the AMC business, we are concerned about fund raising, and regulatory clampdown. We remain wary of increased competition in broking. Lastly, despite much of the negatives in MOHL being factored in, the business needs to display scalability. We maintain a SELL with a TP of 711 i.e. 10/20x Broking/AMC business Dec-21E EPS. Key Risks: any sharp turnaround in fund raising and broking market activity, stronger scale up and lower stress in legacy book at MOHL. Treasury income (Rs 545mn, +82.3% beat), boosted MOFS (ex-MOHL) reported 3QFY20 PAT to Rs 1.49bn (+11.0/-3.1% YoY/QoQ). However 9MFY20 core cap markets/AMC performance remains weak as PBT declined 9.9/9.0% YoY. We tweak our estimates but retain SELL (unchanged TP of Rs 711), as core profit growth remains elusive.
Background: RBL bank (RBL) came into operations in 1943 and was incorporated as a small, regional bank in Maharashtra with two branches in Kohlapur and Sangli. Post the change in the management team in 2010, it has been one among the fastest growing private sector banks and now has 346 interconnected branches and 383 interconnected ATMs spread across 24 Indian states and union territories serving ~7.8mn customers. The bank offers a comprehensive range of banking products and services customized to cater to the needs of large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers. Loan book of the bank grew at a CAGR of 52% over FY11 to FY19 and stood at INR 596bn as of 3QFY20...
22 January 2020 APNTs ~-8% realization decline (on a base that had an already weak mix in 3QFY19) does not augur well for its sales growth beyond FY20, especially given the uncertain economic revival. While 4QFY20 should continue seeing YoY margin gains, there is uncertainty on further commodity price reduction in FY21/FY22, thereby tempering margin growth expectations. This means that EPS growth is likely to be in line with top line. On account of lower FY20 capex assumption and margin beat in 3QFY20, we have upgraded FY20/FY21 EPS estimates at 2%/3%; our FY22 forecast remains unchanged. net sales grew 3% YoY to INR54.2b (slightly lower than est. INR54.5b), despite volume beat of ~11% (v/s est. Note that 3QFY19 saw 23.5% sales growth. Despite significant mix deterioration, gross margins were up 190bp YoY to 43%. However, higher operational expenses mean that EBITDA margin expanded only 100bp YoY to 21.
While volumes increase deteriorating mix is expected to keep yields under check. Distribution revenues have bottomed out. ISEC is rapidly building loan assets which will drive earnings in the near term. All the above, along with cost control will drive earnings at FY20-22E CAGR of 17.9%. We increase FY20E/21E/22E APAT estimates by 0.6/4.8/5.1%, and continue to rate ISEC a SELL with a TP of Rs 376 (16x Dec-21E EPS). We believe 16x is a fair multiple for the stock given market linked nature of its business lines. A rally in equity markets coupled with increased retail participation remains a key risk. Higher core broking revenues and strong growth in funding book drive profits, while distribution and IB remain soft. Cost decline is lower than our expectation.
We reiterate our REDUCE rating on the stock with a revised target price of Rs. 817 based on 14x FY22E adj. EPS, given the sluggish growth in contracts signed and tough competition in the industry. Strong Hi-Tech segment leads the way Mindtree's revenue were up 10.0% YoY to Rs. 1,965cr primarily driven by the 15.7% YoY growth in the High Technology and Media segment (41.5% of total revenue), Also, Travel and Hospitality segment (16.6% of total revenue) and BFSI segment (21.3% of total revenue) grew 9.9% and 8.2% YoY, respectively. Retail, CPG and Manufacturing...
Expansion plan to be led by mix of organic and acquisition route We met the management team of Metropolis Healthcare (METROHL) at their Global Reference(Mumbai) to understand their business outlook for next few fiscals. We believe METROHL will continue to focus on specialized test (low volume and high complexity), and increase its share in B2C business by partnering with local labs (with sizeable track record) and converting them into Metropolis-branded PSCs (Patient Service Centre). Its wide range of test menu and patient shift towards organized diagnostic player are some...
We expect changing regulations in motor to drive down both claims and tariffs, creating supernormal profitability in the short term. We believe that this period (of super-normal profitability) will be short lived, as we expect IRDAI to clamp down on TP pricing restricting profitability. We believe market is not factoring this risk, accordingly we rate ICICIGI a SELL with a reduced TP of Rs 1,126 (Dec-21E P/E of 26x and a P/ABV of 5.7x). ICICIGIs 3QFY20 saw NEP growth of 16.4% YoY (ex crop 22.2% YoY, +10.3% vs. est.) to Rs 24.5bn, decline in COR (calc.) to 99.5% was also better than est., but investment yield of ~7.3% (-80/-114bps YoY/QoQ), weighed on APAT, which at Rs 2.94bn grew +23.0/-14.9% YoY/QoQ, (-2.6% vs. est.)
13 January 2020 DMART delivered another strong quarter in a consumption slowdown context, albeit with an inline but a decelerating revenue growth print. High capex and moderating revenue growth could crimp return ratios and compress the stretched valuation multiples. DMARTs standalone 3QFY20 revenue/EBITDA/PAT grew 24%/26%/55% YoY to INR67.5b/INR5.7b/INR4b (pre IND-AS 116 basis). Footprint addition was a healthy 9% YoY in 3QFY20; the company added 7 stores/0.47m sqft to reach a total of 196 stores/6.97m sqft area. 9MFY20 saw addition of 20 stores (v/s est. Revenue growth came in at 24% each for 3QFY20/9MFY20, but has slowed considerably compared to 33% each in the corresponding period. For 9MFY20, our same store sales growth (SSSG) estimate was in low double- digit (v/s 18% in FY19). Gross profit was up 26% YoY at INR10.
We remain sellers on the counter as we believe 1) D-MART's throughput, cost and working capital efficiencies are near peak. 2) Cost of retailing is inching up. 3) Well capitalized e-grocers/online biggies (Amazon /Flipkart) are getting price-war-ready as can be seen from the significant bump up in their authorized capital. (This could increase cost of retailing in general for the industry over the medium to long term as offline retailers may be arm-twisted into taking fulfillment cost on their books not factored in). We largely maintain our estimates/TP and we bake Revenue/EBITDA/LTL APAT CAGR of 26/30/30% CAGR over FY19-22 and currently have a DCF-based TP of Rs. 1,250/sh, implying 24x Dec-21 EV/EBITDA. Stock currently trades at 42/34x FY21/F22 EV/EBITDA. While D-MART posted healthy growth in 3Q, the pace of growth has come off consistently over 9MFY20 courtesy 1. A heavier base, 2. Ever-heightening competitive intensity. What is more worrying is the dip in the anchor variable - sales velocity (revenue per sq. ft) over the last 9m partly due to larger-sized stores. This certainly warrants a closer look to assess how close is D-MART to its peak on throughput, cost and working capital efficiencies.
We believe Ilumya will face stiff tough competition from AbbVie's Skyrizi (Risankizumab) and J&J;'s Tremfya (Guselkumab) because of the lower efficacy level with PASI (Psoriasis Area Severity Index) score of 75 in week 28 versus Skyrizi & Tremfya PASI of 90 in just 16 weeks. With more than 15 months' post launch of Ilumya in US, its market share has been lower than 2% in interleukin (IL) treatment for psoriasis/psoriatic arthritis, while Skyrizi and Tremfya have gained market share of more than 2% and 5% respectively. Although market expects Ilumya peak sales of US$300-350mn, we believe...
Several observations related to lapses in injectable formulation SUNP's Halol (Baroda) facility underwent a routine cGMP(Current Good Manufacturing Practice) audit by USFDA during 3rd-13th December, and the inspection concluded with 8 observations in Form-483.We believe that few observations are critical in nature and there is likely possibility of conversion into WL post 90 days. The observations indicated lack of authenticity of data pertaining to microbiology tests, contaminations, and...
Big deals in the bag, conversion will be key. Margin challenge likely We attended Tech Mahindra's (TML) analyst day recently and have the following key takeaways: (1) It emphasized client mining as a big thrust area going forward with an emphasis on selling multiple offerings within its top 200 clients, which according to it are currently using maximum of only 2 on an average. If TML is able to successfully execute this we think its margins can improve on lowering of SGA costs. However, this strategy is not new to the industry (2) While it is starting FY21 on a stronger footing with multiple large deals in the bag and a soft guidance of high single digit revenue growth (higher-than-industry enterprise growth and mid-high single digit communication vertical growth),...
Bharat Petroleum Corporation Ltd (BPCL) is one of India's leading oil & gas companies. It operates refineries located in Kochi, Mumbai, Bina and Numaligarh. The company's marketing infrastructure consists of...
