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technology access may not be as big a barrier to competitors (KOEL, Mahindra, and Perkins), end markets may not be strong enough to absorb such steep price hikes (similar learning from the earlier transition from CPCB-I to CPCB-II), the implementation date is set as July 2021, which may be pushed by six to nine months, especially given the COVID- 19-led disruption. However, the key end markets Manufacturing, Real Estate, Retail, and Hospitality are likely to remain under pressure, with a sluggish growth outlook over the next two years. Even the transition to CPCB-II met with a similar fate, with an anticipation of pre-buying, followed by price hikes, and hope of earnings growth. Given the weak outlook for the end markets and limited pricing power in the Gensets industry, we refrain from being bullish on CPCB-IV opportunities. Currently, macro headwinds remain too strong for the industry to witness double-digit growth on a sustainable basis in the domestic market.
Outlook and Valuation: While we believe that these are a positive development for INFOE, we continue tobelieve that the core/standalone business of the company is expected to suffer in thenear term as the growth prospects of the company are closely linked to GDP growth ofthe company.
We expect demand recovery from 2Q-3Q, supported by (1) strong digital playbook, (2) recovery in deal contracting with increase in consolidation deals (advantage Indian Tier-1s) as enterprises consolidate their tech portfolio, and (3) tech budget normalisation in 2Q for impacted verticals. Following -1.5/-6.0% QoQ in 4Q20/1Q21E, we have factored -0.6/+1.5/+2.8% QoQ in revenue over 2Q-4Q21E. The IT sector margin is expected to decline 95bps QoQ. Profitability is expected to be impacted by lower utilisation, pricing, cross-currency (GBP), lower forex gains and should be offset by (1) INR depreciation, (2) lower travel and discretionary spend, (3) deferral of wage increase and variable payouts cuts/deferrals, and (4) lower sub-contracting. We expect the margin trajectory to bottom out in 2Q. Subsequent margin recovery is premised on (1) demand recovery leading to utilisation recovery (onsite utilisation to precede offshore), and (2) continuity in optimal SG&A, including travel and sub-contracting rationalisation. IT sector (coverage universe) is expected to post -6.1/-3.7% QoQ/YoY in 1QFY21E revenue with cross-currency impact of -15 to -70bps QoQ. We expect Tier-1 IT revenue to decline between 5% and 9% QoQ while Tier-2 IT is expected to display a wider divergence (-2 to -14% QoQ). COVID-related economic impact on sectors like travel and transportation, O&G;, retail & CPG (discretionary) will be accentuated in 1Q (dual impact of price/volume cuts and deal deferrals/cancellations), while BFSI, healthcare, retail & CPG (non-disc.) and hi-tech verticals will be more resilient (deal-deferral impact, but resilient on pricing/volume).
Outlook and Valuation: We downgrade our revenue estimates for FY21E by 5.9% to Rs. 60.3 bn dueto downgrade in Customs Synthesis and Generics business due to no revenueguidance provided by the management.
Outlook & Valuation: We downgrade our revenue estimates by 7.5% for FY21E to Rs 169.6 bn on accountof downgrade across regions while we introduce FY22E revenue estimates atRs 186 bn.
Tata Steel (TATA) reported Q4FY20 EBITDA above our/consensus estimates by 12%/8% at Rs46.5bn (up 48% QoQ/down 38% YoY), led by higher than expected earnings in TATA Steel Europe (TSE). While, Indian operations reported earnings in line with our expectation. Stock moved up ~20% over last couple of months in light of improvement in global prices (up 15% from bottom), low input prices and gradual recovery in domestic demand. However, we expect prices to weaken in H2CY20 due to ease in China's pent-up demand and sharp increase in Chinese steel...
We reduce our revenue estimates by 20.1%/ 8.5% for FY21E/ FY22E on account of lockdown due to covid-19. We factor EBITDA loss in H1FY21E leading to reduction in EBITDA margin estimates by 712/ 19 bps for FY21E/ FY22E to 4.9%/ 12.0%. Accordingly, we drastically reduce our PAT estimates by 95.1%/ 13.2% for FY21E/ FY22E. We...
Background: Emami is a FMCG company with niche focus on relatively under penetrated segments such as antiseptic cream, fairness cream, talcum powder, cooling oil, pain balm and pain reliever. Emami's power brands such as Navratna Oil, Boroplus Cream, Zandu & MenthoPlus Balm, Fair & Handsome, Boroplus Powder, Navratna Cool Talc, Fast Relief, SonaChandi & Zandu accounts for 75% of company's sales. Emami sales have grown at a CAGR of 38.5% (FY2010-20)....
Background: Page Industries is the exclusive licensee of Jockey International Inc (USA) to manufacture and distribute Jockey brand in India, Sri Lanka, Nepal, Bangladesh and UAE till 2040. They broadly operate in premium men's innerwear; women's innerwear and leisure wear segments. Jockey enjoys high brand recall and they spend ~5% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. They are also exclusive licensee of Speedo swimwear brand in India. Page has network in ~250 cities and ~760 exclusive brand outlets in India. They...
