Sell

Mphasis (MPHL) reported weak revenue but an operating margin beat in Q1FY21.

Equity flows remain subdued

36.5% YoY. Gross margins expanded by 575bps YoY to 57.0%, which were significantly above our estimate of 51.0%. We believe, gross margins have largely expanded due to benign input costs. EBITDA (D.est: Rs 547mn) de-grew by 34.0% YoY to Rs 1.58bn, with an EBITDA margin of 24.0%. The company has controlled its other expenses and power and fuel costs, down by 38.3% YoY and 33.8% YoY respectively. Tax rate stood at 28.0% against 31.8% against...

Rallis grew its consolidated sales by a 6.3% YoY to Rs 6.62bn (D.est: Rs 6.73bn). Controlled other expenses (up 0.7% YoY to Rs 492mn) and employee costs (down 4.7% YoY to Rs 857mn) helped in deriving operating leverage, also a richer product mix supported healthy gross margin expansion of 230 bps YoY to 39.7%. Thus, growth in EBITDA (D.est: Rs 990mn) and PAT (D.est: Rs 705mn) of 35.4% YoY and 52.1% YoY to Rs 1.28bn and Rs 919mn came ahead of our estimates. Within the crop care segment (ex-seeds), domestic business grew by...

We continue to maintain negative view as FY21 could be tough year as challenges persist in the form of regulatory changes (cost rise due to the move from BS-IV to BS-VI) and negative economic impact of Covid19. As schools and colleges remain shut, we do not see any revival in demand in the bus segment in FY21. The increasing penetration of EVs...

We highlight that while long term target is attractive, the fibre pricing weakness persists. Moreover, we would await meaningful traction in demand before turning constructive. Post ~40% run up since our last update, we downgrade our rating to REDUCE (vs. HOLD, earlier). We value...

Bajaj Auto (BJAUT) Q1FY21 result was above our and consensus estimates at all parameters. EBITDA margin for the quarter stood at 13.3% vs our and consensus estimates of 4.4% and 10.6% respectively on account of lower operating expenses. We expect domestic 2W/3W industry to see a double digit decline in FY21 driven primarily by adverse impact of the COVID-19 outbreak on economic growth and discretionary spending. However stronger recovery in export market for 2W/3W segment would help BJAUT to partially mitigate the current slowdown in domestic market. We cut our volume estimates for FY21/FY22 by 5% each factoring the extended lockdown in certain...

The company has moved ahead with various transformational initiatives which it had embarked on over the last few years. Through a reoriented marketing strategy, it is shifting gears in the non-south markets as well as preparing for the Ecom channel. It has plans to expand its presence in the non-South region by enhancing distribution network and brand visibility. Its A&P; thrust will be on non-south markets, where it expects to gain share. Its product launches also get transformed. Typically, product introductions are made in the Kerala market followed by the other...

Valuation and Risks: We upgrade our revenues by 3.2% / 3.3% for FY21E/FY22E at Rs 52 bn / Rs 56 bn respectively due to upgrade in US, ROW and API business.

HDFC Life's overall APE de-grew by 30% YoY as FYP and Single Premiums de-grew 23%YoY/38%YoY respectively. Product mix on Ind. APE basis continued its bias in Par segment from NPar (slowed SP product on higher base) which also has drag on margins being maintained at 24.3% (flat QoQ) as individual protection business still was better. Structurally growth pull back will be stronger with better positioning on protection, digital and tech led adoption. Although, in medium term slower attachment rates in credit life, on-par peer positioning in term insurance rates and lower room for risks on...