The India Cements (ICEM) reported weak operating performance for 1QFY19 because of the sustained fall in realisation. Cement volume continued to pick up with 15.8% YoY growth at 3.08mnmt (above our estimate of 3.0mnmt). However, realisation continued to decline 10.3% YoY/2.5%QoQ to Rs4,323/tn (below our estimate of Rs4,323/tn). Effectively, revenues grew only ~5% YoY to ~Rs13.6bn (in line with our estimate of ~Rs13.8bn). Operating costs decreased ~5.4% YoY/2.6% QoQ to Rs3,917/tn because of savings in logistics cost and other expenditure. Limited pass-through because of weakness in key ICEM markets led to EBITDA margin compression of 326bps YoY to 11.5% YoY. Effectively, EBITDA/tn stood at Rs510/tn, down...

Dalmia Bharat Enterprises (DBEL) reported a steady performance in 1QFY19 backed by YoY double-digit volume growth. Volume grew ~13% YoY to 4.51mnmt (below our estimate 4.67mnmt), contributed by its key markets. Realisation, however, fell ~4.8% YoY/flat QoQ to Rs4,881/tn on account of weak pricing in the southern/eastern region. Overall revenues grew ~16% YoY to ~Rs23.7bn. Additionally, operating costs increased ~10% YoY to Rs4,088/tn (5% above our estimate) contributed by higher raw material and energy costs, and also other expenses. Effectively, EBITDA declined ~6% YoY to Rs5.24bn versus ~Rs5.6bn in 1QFY18 (above our estimate of ~Rs4.9bn). EBITDA/tn stood flat at Rs1,135 versus Rs1,333 as cost inflation and weak...

Strong Earnings Driven By Inventory Gains, But Interest Expenses Up Indian Oil Corporation (IOCL) reported earnings of Rs68bn for 1QFY19, up 30.9% QoQ and 50.2% YoY, primarily because of: 1) Higher gross refining margin or GRM of US$10.21/bbl in 1QFY19 versus US$9.2/bbl in 4QFY18 and US$4.3/bbl in 1QFY18, mainly on account of higher inventory gains of Rs 59bn in 1QFY19 as compared to Rs24bn in 4QFY18 and an inventory loss of Rs28bn in 1QFY18. 2) Rise in refinery throughput from 17.2mmt in 4QFY18 and 17.5mmt in 1QFY18 to 17.7mmt in 1QFY19. 3) Employee benefit expenses at Rs23.6bn in 1QFY19 declined 19.5% QoQ and 1.9% YoY. 4) Domestic product sales at...

formulations, INDR's net sales increased by 4% YoY in Q1FY19. The stoppage of US and restriction on EU exports from Goa plant reduced exports in regulated markets by 55% QoQ and 60% YoY. Higher contribution of domestic...

API prices and while EBITDA margin increased by 160bps QoQ. The increase in EBITDA margin was benefitted from lower overheads which management guided to increase in later part in FY19E. Further adjusted with normalised other expenses and R&D; expenses, normalized EBITDA margin was 9.5%, declined by 360bps QoQ. Tax provisioned 29%, guided effective tax rate of 27%, while cash tax outflow was 31%. GNP's Q1FY19 was disappointing given that it launched two limited...

Strong Performance across verticals : Maintain BUY GMM Pfaudler Ltd (GMM), for Q1FY19, reported a strong set of numbers. Revenue grew at 35.4% YoY to Rs 932mn (est Rs 925mn). EBITDA showed growth of 93.4% YoY to Rs 153mn (est Rs146mn) with 494bps YoY increase in margin from 11.4% in Q1FY18 to 16.4% in Q1FY19 due to higher export revenue and lower power cost. Net profit inclined by 63.9% to Rs 91mn (est. Rs 88mn) due to operationally strong performance. During the quarter, export accounted for 10% of revenue compared to the...

Merck's Q2CY18 results were a mix bag. Topline was 27.2% below our estimates given the divestment in the business, however PAT was 7.6% above our estimates given better than expected EBITDA. Sales grew by 33.3% YoY to Rs2.2bn. EBITDA margins were at 23.1% up QoQ from 12% given higher gross margins and reduced OE. APAT was...

Thermax posted 1QFY19 consolidated revenues of Rs10.4bn, up 19% YoY and broadly in line with our/consensus estimate, respectively. Gross margin was down 110bps YoY at 50.1%. Other expenses rose 30% YoY to Rs2.6bn (up 210bps YoY as a percentage of sales to 25.4%), leading to 160bps YoY decline in EBITDA margin to 6.7%, much below our/consensus estimate of 9% each. EBITDA fell 4% YoY to Rs693mn. Higher other income (up 29% YoY at Rs310mn) led to 21% YoY increase in PAT to Rs490mn, below our/consensus estimate of Rs641mn/Rs589mn, respectively. The consolidated order inflow in 1QFY19 was healthy at Rs16.5bn, leading to a strong order backlog of Rs64.2bn, up 13% QoQ. Thermax is focusing on executing its robust order book (which will lead to healthy revenue...

Comprehensive miss across estimates: LPC's adj. sales, adj. EBITDA and PAT declined by 5%, 32% and 126% QoQ respectively in Q1FY19, due to Change in Estimates | Target | Reco regulatory price restrictions in export markets and higher overheads. With...

Ultramarine Pigments (UMP) produces range of inorganic pigments, detergents and cosmetic grade surfactants. They also have an ITES division, which offers services for international customers in digital publishing, healthcare etc. For FY18, sales, EBIDTA and PAT were at Rs2.8bn (+9%YoY), Rs602mn (+20%YoY) and Rs436mn (+35%YoY) respectively. Surfactants is the largest business and accounted for 58% of FY18 revenues, followed by pigments (31% of FY18 sales) and balance is accounted by ITES division. Growth has accelerated for UMP and over five years EBIDTA and PAT has...

net forex gain of Rs400m. The optimistic guidance of the management: a)launch of one complex drug/quarter and Q4FY18 was to be first strong quarter (to begin a series of good quarters) hasn't played out. And disappointed. Its gross margin declined by 110bps QoQ despite benefit of 4% higher (QoQ) US$/INR rate in Q1FY19. Inflation in global commodity prices, higher costs of API from Chinese suppliers and unabated price erosion in US generics has led to lower gross margin....

TVS Motor Company's 1QFY19 performance was below our expectations on margin as well as PAT fronts. Reported PAT at Rs1.46bn was 19% below our estimate, while EBITDA margin stood at 7.4% (up ~120bps YoY/35bps QoQ) versus our estimate of 7.9%. The miss on the margin front was largely on account of higher-than-expected raw material costs as a result of which gross margin fell sharply by 160bps YoY and 240bps QoQ to 23.8%. Absolute EBITDA at Rs3bn grew 45% YoY on a low base and was 10% below our estimate. Net sales at Rs41.5bn grew 22% YoY on 16% YoY volume growth, but realisation for the quarter fell 0.4% QoQ despite the company going for a price hike in 1QFY19. Lower realisation was on account of accounting change as per IND-AS where freight expenses are...

Tactical Shift To Guard Realisation; Limits Volume Gains JK Lakshmi Cement (JKLC) reported a steady set of numbers for 1QFY19 driven by marginal realisation gains. Cement realisation (adjusted with ready-mix concrete or RMC revenues of Rs420mn) were up ~2.1% YoY at Rs3,854/tn (above our estimate of Rs3,793/tn). JKLC tactically shifted from the non-remunerative non-trade segment (54% vs. 50% in 1QFY18) to guard the realisation in otherwise weak JKLC markets. Effectively, volume stayed flat YoY at 2.28mnmt in a growing market in 1QFY19. Despite the changed strategy, revenues grew only 2.5% YoY to ~Rs9.2bn (above our estimate of ~Rs8.7bn). However, following higher energy, logistics and other...

Background: Capital First Ltd (erstwhile Future Capital Holdings Ltd) is a non-deposit taking NBFC with large focus on retail lending. Capital First provides loans to retail customers (in the form of secured and unsecured loans to small and medium enterprises (MSME), consumer durables loans, two-wheelers loans and housing loans) and corporate customers (loans to real estate developers) on a selective basis. AUM (Asset under Management) stood at INR 296bn as of 1QFY19 with a mix of Retail- 91%...

Astral Poly Technik's (Astral) Q1FY19 result came largely in line with estimates where EBITDA/adj. PAT were 6.3%/3.4% above our estimates respectively while revenue was 2.4% below expectation. Revenue grew by 17.1% YoY to Rs4.7bn, EBITDA was up 60.7% YoY to Rs779 m and adjusted PAT was up 76.8% YoY to Rs454 mn. Plastic segment saw a volume growth of 15% YoY to 22,476mt whereas Adhesive business witnessed revenue growth of 25% YoY to Rs1.4bn. Both Plastics and Adhesive business witnessed a margin expansion of 412bps and 483bps YoY respectively. We keep our estimates unchanged and expect revenue/EBITDA/PAT to clock a CAGR of 19%/20%/24% during...

NBIE Values your patronage- Vote for The Team in the Asia Money poll 2018. Click Here Emami's (HMN) 1QFY19 operating performance was below overall expectations. Consolidated revenue on a comparable basis grew 19% YoY with HMN reporting volume growth of 16%. We believe that revenue growth in 1QFY19 has been led by a favourable base as volume decline in the base quarter was 18% due to GST-related challenges. Although all key brands, except Boroplus, reported strong growth during the quarter (due to favourable base), but the underlying growth in core brands still remains a cause of concern. Operating margin expansion of 530bps...

in data volume. Capex stood at Rs9.8bn and annual capex guidance intact at Rs70bn. Vodafone are more vulnerable to lose subscribers during their merger integration. Weak Q1FY19 has led to another round of EBITDA downgrade. Current cash balance (after fund raising & tower monetization) and merger-related benefits would take care of cash burn during FY19-20E. However, net debt/EBITDA for merged entity to remain at elevated levels of ~6.7x in FY20E, restricting aggression on capex spends and retaining RMS. We are already factoring in aggressive opex savings of >Rs120bn over FY19-20E. We retain SELL with TP of Rs39, valuing at 8x FY20E pro-forma Sept'20 EBITDA....

Weak Performance; Foray Into South India To Add To Challenges Shree Cement's revenue growth of ~21% YoYin 1QFY19 at Rs30.7bn was largely in line with our estimate. However, the performance was driven by volume (18.7% YoY jump including clinker sales) as realisation remained weak, down marginally by ~1.0% YoY because of weak demand. However, costs escalated ~13.2% YoY driven by higher fuel costs and other expenses. Effectively, EBITDA fell ~15.4% to Rs5.8bn and EBITDA margin slipped below 20% to 18.7% YoY. The power segment's performance, however, was strong with a 58.3% YoY jump in external power sales to 450.5mn units and revenue jump of 43.5% at Rs5.1bn. SRCM continue to be propelled by volume in...

Margins improved by 80bps QoQ to 2.5% mainly benefiting from reduction in cost of deposit deposit de-growth especially in bulk deposits BOI continued to report loss at PBT levels but was better than expectations mainly on sharp improvement in NII growth of 32% YoY benefiting from reduction in bulk deposits and de-growing international assets. Slippages...

Healthy Show; Avenues For Further Improvement Limited HeidelbergCement India (HEIM) reported a strong set of numbers for 1QFY19 driven by higher realisation which was up ~8% YoY/~2% QoQ at Rs4,237/tn (above our estimate of 4,175/tn). Realisation gains were also partially because of the change in commercial terms post Goods and Services Tax or GST introduction. Volume gained 15% YoY at 1.27mnmt backed by healthy demand in Uttar Pradesh (UP) and Madhya Pradesh (MP), HEIM's key markets. Effectively, revenues grew ~16% YoY to ~Rs5.3bn (above our estimate ). However, operating costs/tn declined ~2% YoY to Rs3,322/tn following energy and raw material cost savings. Consequently, EBITDA grew ~78% YoY...