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.
Seminal year for industry provides interesting insights However, amid all the gloom, the engineering and production prowess of the industry (along with its value chain) shone brightly as it successfully completed the world's fastest switchover to Euro 6 equivalent emission norms i.e. BS-VI as per schedule. Much of the post festive period was focused on the transition, with the entire ecosystem estimated to have spent ~| 70,000 crore towards the technological leap. Covid-19 crisis struck India in the run up to April 2020, just as the changeover...
Dr Reddy's (DRRD) has announced a key settlement of the patent litigation with Celgene for US Revlimid (lenalidomide capsules) used to treat multiple myeloma.
SML Isuzu reported a dismal performance in Q1FY20. Revenue stood at Rs 287mn (-94% YoY) attributed to sharp 95% fall in volume (202 units) offset by increase in net ASP because of better spare parts revenue. Bus to Truck volume mix was in ratio of 44:56 with market share of 7.8% in the bus segment. EBITDA loss stood at Rs 357mn attributable to high RM costs and negative operating leverage. The company reported net loss of Rs...
Valuation and Risks: Good brand recognition, market share and being amongst the very few companiesin the listed space in footwear, the company would continue to hold premiumvaluations.
Weak execution & higher than expected loss amid lockdown SELL Bharat Heavy Electricals (BHEL) posted 56% YoY decline in 1QFY21 revenue at Rs19.9bn, 5% above our estimate, but 21% below consensus estimate. Power segment revenue declined 68% YoY to Rs11.2bn (59% of total sales) while Industry segment revenue fell 15% YoY to Rs7.8bn (41% of total sales). Gross margin fell to 34.1% (vs. 42.5% YoY). Lower revenue led to negative EBITDA of Rs10.6bn (vs. negative Rs2.7bn YoY). The loss was higher than our/consensus estimate loss of Rs7.2bn/Rs6.8bn. PBT was negative Rs11.9bn. With deferred tax write-back of Rs3bn, net loss stood at Rs8.9bn (vs. loss of Rs2.2bn YoY). Net loss was...
We now expect BHEL to report loss in FY21E and have also reduced our FY22E earnings estimate by 21% to factor poor execution and a weak ordering environment. EBIT loss stood at INR2.5b (v/s profit of INR349m Order book (OB) was flat YoY at INR1081b, with OB/rev at 5.7x. Total receivables remain elevated at ~INR360b, of which 12% are from the private sector, 48% from state entities, 33% from the center, and 7% pertain cost at ~25% of sales. In FY20, working capital deteriorated to 99% of sales from 65% in FY19 due to higher inventory, slow movement in receivables, and poor We now expect BHEL to report loss in FY21E and have also reduced our FY22E earnings estimate by 21% to factor poor execution and a weak ordering environment. While the company has received EoIs from three major OEMs regarding its ongoing diversification drive, we believe any material financial impact is still some time away.
Outlook and Valuation: Currently the stock is trading at very stretched valuations and way beyond fundamentals as the markets are pricing in qualitative factors like solid fundamentals, strong competitive moat, value unlock potential in some of the investments, which will take some time to reflect in the numbers.
On the cusp of recovery; Rising debt is a concern Ramkrishna Forgings (RMKF) Q1FY21 performance was dismal. A sharp decline in domestic M&HCV; sales due to lockdown adversely affected its domestic revenue (-82% YoY). Export revenue also plunged 46%...
The domestic manufacturing story is leading the path for Dixon and it sits comfortably with a diversified product mix, client mix and fungible manufacturing facilities which can be adjusted to make use of any unutilized capacity. It has been successful in backward integration, improving operational efficiencies and design capabilities to continue on its growth trajectory. It continues to transition from the OEM model to ODM model of doing business, which should improve its margins going forward. The PLI scheme is another opportunity for Dixon, which can...
We build in revenue/EBITDA/PAT CAGR of 8/9/10% over FY20-23E (closely tracking APNT) and initiate coverage on the stock with a Sell recommendation and a DCF-based target price of Rs. 460/sh (implying 55x Sep-22 P/E) as there is nothing on the investor table at 66x Sept-22 P/E. RoICs are likely to mean revert to 22% by FY22/23. Berger Paints (BRGR) has gone toe-to-toe with dominant leader APNT over FY10-20 despite the former's higher industrial salience, implying that its decorative biz has outpaced APNTs. Growth has been smartly navigated alongside improving profitability viaaggressive productinnovation/ premiumisation, efficient marketing and distribution expansion (GM/EBITDAM differential has reduced from 856/924bp to 320/560bp over FY10-20). While this narrative will continue, outperformance is unlikely to be as steep over FY20-23, given that (1) BRGR will have to contend with APNT's stepped-up aggression at the bottom of the pyramid and (2) margin levers seem to be missing.
We build in Sales/EBITDA/PAT CAGR of 8/9/10% over FY20-23E. Alas! all pluses seem priced-in at 55x Sept-22 P/E. We initiate coverage with a Reduce Reco and DCF-based TP of Rs. 1,800/sh (implying 50x Sep-22 P/E). Asian Paints (52/64% revenue/PAT share) with 2.5-7x active dealers than the next three paint companies remains de-facto king in distribution/supply chain of paints in India. Coupled with better price laddering of products across categories/price points, this has ensured its unhindered dominance over decades. Promising optionality in waterproofing/other adjacent categories (we build in 40-50bp incremental growth from waterproofing) could surprise on the upside.
Post declaration of Future Group deal with Reliance Retail, we had given a call of sell on rallies (link to note). FRL shareholders in this deal will get shares of FEL which will have businesses like Consumer brands, Apparel Manufcaturing, Food park, Stake in Insurance ventures etc. we believe massive equity dilution in FEL (Rs12.26bn shares) and little profitability, makes the risk reward unfavorable. We believe FRL is no more a play on structural growth story of organised retail in India. we recommend exit from FRL and drop coverage on the stock....
We reduce earnings estimate of JUBILANT by 23%17.5%11.6% for FY21/22/23E due to weak and inconsistent performance of its Pharmaceutical segment (65% revenue and 78% EBITDA contribution in FY20) whose key contributors Radio pharma and Allergy are currently witnessing lower volumes caused by pandemic in US. Radiopharma being a hospital driven...
