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Granules (GIL) posted revenues of INR 5,999mn with 2.2% YoY decline, which was ~14% below our estimate of INR 6945mn. Revenue growth was mainly impacted by the restriction imposed on export of Paracetamol API, PFI and FD's (which was uplifted for PFI & FD's in the month of April and for the API in the month of May) and disruption in logistics (revenue loss of INR600 to700mn). However, post lifting of restriction on the export of paracetamol, capacity utilization has improved significantly now. Gross margin improved (754bps YoY) due to higher formulation sales (57% of revenue vs 52% in Q4FY20). However, EBITDA margin expanded by barely 75bps to 16.7% level was 279bps lower than our estimate due to higher employee cost (up 43.8%) and one time INR 217 Mn impairment of...
Valuations (81x FY20P EPS of 84) at WIL, in our opinion are disconnected from prevailing challenges on the demand front, with relative resilience in price performance centred around market expectations around the open offer price. On the back of elongated CV recovery cycle, we assign SELL rating on WIL and advice existing investors to either tender their shares in the forthcoming open offer ( 7067.5/share, 2.5 months away) or for simplicity of operations sell shares in open market. We ascribe a fair value...
Background: TVS Motor Company Limited (TVSM), the third-largest two-wheeler manufacturer in India, is a part of TVS Group; it manufactures motorcycles, scooters, mopeds and three-wheelers in India. TVS Motors is credited with many innovations in the Indian automobile industry, notable among them being the introduction of India's first two-seater moped, the TVS 50cc. The company has presence in all the three sub-segments of two wheelers, i.e.,...
UNSP's Q4FY20 was in-line but weak at operating level with volume decline of 13% YoY (P&A; 20%). Adjusted for one-off bulk sales, Revenue/ EBITDA/APAT were -14.8/-10.6/-28.2% YoY. Reported revenue/EBITDA/PAT were -11.4/-12.4/-14.6% YoY. Yet, UNSP's earnings print is impressive in backdrop of weak volume growth and decline in Gross margin of 433/220bps YoY/QoQ. Persistent cost controls in line-items below GP is enticing for second consecutive quarter. For perspective, below GP costs declined from...
Outlook & Valuation: We downgrade our revenue estimates by 7.5% for FY21E to Rs 169.6 bn on account of downgrade across regions while we introduce FY22E revenue estimates at Rs 186 bn.
GMM Pfaudler Ltd (GMM), for Q4FY20, reported a decent set of numbers. Revenue de-grew by 5.3% YoY to INR 1318mn (est INR 1593mn) mainly due to a revenue loss of INR 300mn led by the nationwide lockdown. EBITDA showed growth of 13.4% YoY to INR225mn (est INR323mn) with 280ps YoY improvement in margin from 14.2% in Q4FY19 to 17.1% in Q4FY20, due to favourable product mix mainly led by Glass-lined business, where EBIT margin improved by 463bps on YoY basis with 63% contribution in consolidated revenue. However, the Heavy engineering business has dragged growth momentum with 59.5% de-growth in revenue and -18.6% EBIT margin (vs 2.1%YoY) in Q4FY20. The loss came up as GMM couldn't ship the order to their Middle East client due to lockdown followed by higher fixed overheads. As per the management, heavy engineering can add strong growth on the...
