Sell

Background: Mindtree is a global technology consulting and services company, helping enterprises marry scale with agility to achieve competitive advantage. Born digital, in 1999 and now a Larsen & Toubro Group Company, Mindtree applies its deep domain knowledge to 290+ enterprise client engagements to break down silos, make sense of digital complexity and bring new initiatives to market faster. We enable IT to move at the speed of business, leveraging emerging technologies and the efficiencies of Continuous Delivery to spur business innovation. Operating in more than 15 countries across the world, we're consistently regarded as one of...

We maintain our Reduce rating as we consider stock valuations expensive against the downturn of discretionary spends & top client concentration (30% of revenues). Our EPS estimates are upgraded on account on better margin performance, change in deprecation policy & higher other income. We value MTCL at 14X Sep-22 EPS of Rs. 63.5 to arrive at changed TP of Rs.888. MTCL is trading at 16X/15X FY22/23E earnings of Rs.61/66 respectively. Mindtree reported revenue de-growth of 9.1% in QoQ vs our estimates of 7.1% CC decline. Volumes were up 4% YoY. Pricing was down 5.2% YoY, mainly...

We upgrade Wipro to Buy from Sell as they are managing costs well, delivering solid cash flows, new CEO, potential buyback & inexpensive valuations. Wipro has surprised us consistently with margin defense. We have raised our earnings estimates by 12%/9% for FY22E/23E led my margin upgrade & now...

Bata generates ~50% of the revenues from premium category footwears (MRP> Rs 1000+) and largely operates through its wide retail network contributing ~84% to the revenues. We, Initiate coverage with SELL rating on the stock with a target price of Rs 1150 as we value the stock at 40x P/E on its FY23

Domestic Formulations A Mixed Bag: The domestic formulations industry grew by 9.7% during the quarter and 9.8% for the year. The last 15-20 days of the March quarter were an issue due to COVID-19 and lockdown. Digital marketing, video calling had replaced the traditional mode of personalvisits and marketing.

Avenue Supermarts Ltd (DMart) owns & operates India's most profitable supermarket, DMart. It provides products like Food, Non-Food (FMCG), General Merchandise & Apparel through 216 stores (total 8mn sq. ft). We downgrade DMart to Reduce rating with new Target of Rs2,100...

We have revised our estimates to factor in lower C-I and higher other income. We beleive inadequate CAR and high moratorium will weigh on the stock. We recommend a Sell with a TP of Rs 40 (0.22x FY22E ABV).

Avenue Supermarts (DMART) 1QFY21 result was operationally in-line while PAT was better than expected due to higher other income. Store shutdowns, restrictions on selling high-margin non-essential products and strict social distancing norms inside the stores contributed towards dismal performance in Q1FY21. Online sale remain strong as customers preferred safety and convenience. Adding 2 stores of size 1 lakh sqft each is departure from DMART's usual strategy of opening 40-50k sqft size stores. Large-size stores should ideally be more profitable if the company maintains its usual inventoryturnout of 14x.Given the strength of DMART's balance sheet with Rs 29bn unutilized money from QIP, it would be opportune time to bargain real-estate and further...

Store expansion plan suffers (just 2 added in 1QFY21), will impact FY22/23 D'Mart 1Q21 shows full impact of COVID19 with lower footfalls, higher cost of operations and restrictions on sale of non-essentials. However, being positive at EBIDTA and PAT level shows the resilience of business model with little rentals and interest cost. Although recovery of 80%+ of pre-Covid sale...

As a result, revenue witnessed a 34% drop and estimated same-store sales growth (SSSG) fell -55%; the closure of the margin-accretive non-food section dragged down gross margins by ~220 bps, translating to 81% YoY decline in EBITDA. DMarts consolidated revenues fell 33% YoY to INR39b (6% below est.) on sales of mostly essential products witnessed at DMart stores and many stores remaining shut in the initial phase of the nationwide lockdown. Gross profit fell 42% YoY (in-line) and gross margins (GM) contracted 220bps YoY to 14.2% (90bp below estimate). This is attributable to the high- margin General Merchandise and Apparel sections of retail stores being closed during the lockdown and stores in some areas (with high local restrictions) continuing to operate sales only for essentials items. Subsequently, loss of INR3b in gross profit directly impacted EBITDA, which fell 81% YoY to INR1.1b (28% below est.); EBITDA margins contracted 740bps to 2.