Sell

The weak performance in Q3FY20 was largely the result of extended monsoons, which led to the disruption in mining and infrastructure activities. This impacted the sale of packaged explosives in the eastern, central and northern regions. Demand for packaged explosives is expected to remain weak in the near term. On the other hand, Coal India's production was hindered by flooded mines. However, December and January saw an uptick in mining activities giving some respite for Q4FY20. Decline in prices of ammonium nitrate by ~8% coupled with a change in product mix (17% YoY...

Industrial Automation facing headwinds due to higher exposure to slowing Automotive sector and limited capex from private sector. ABB India reported flat revenue growth YoY driven by Robotics & Motion and Electrification business. Industrial Automation business was impacted due...

Mahindra & Mahindra Limited operates in nine segments. The automotive segment includes sales of automobiles, spare parts and related services. Farm equipment segment includes sales of tractors, spare parts and related services; information technology (IT) services, which consists of services rendered for IT and telecom; financial services includes services relating to financing, leasing and hire purchase of automobiles and tractors; steel trading and processing includes trading and processing of steel; infrastructure includes...

Background: Berger Paints is the second largest decorative paint company in India. The Company operates seven manufacturing facilities spread across India, and four overseas manufacturing facilities. The company has second largest distribution network of ~11,500 active dealers and ~12,000 tinting machines. Berger has a strong presence in East and North India, which accounts for 60% of its distribution network while South & West India accounts for 40% of distribution network. Company derives ~80% of revenue from decorative paints and the rest from industrial paints of which Automotives accounts for 8%, powder coating...

Net Borrowings stands at Rs3.3bn as on 3QFY20 compared to Rs4.3bn in 2QFY20 due to better collections and turnaround of inventory. GE T&D; reported weak set of numbers for 3QFY20 on the back of lower opening order backlog (HVDC nearing completion), weak fresh order inflows,...

Evosys is focused on Oracle cloud implementation and consultancy. It provides a gamut of solution offerings like Oracle HCM Cloud, Oracle ERP Cloud, Oracle SCM Cloud, Oracle CX, Oracle EPM Cloud, PaaS solutions (including custom-built solutions), AI, IoT and machine learning. The company generates 60% of revenues from Oracle cloud implementation, 32% from support services and rest from licence revenues. Geography wise, the company generates 44% of revenues from Middle East, 17% from North America, 30% from the US, UK and the rest from APAC region. Further, the...

The order backlog of the company remains at | 10,826 crore excluding framework contracts against TTM revenues of | 2451 crore, representing TTM book-bill of 4.4x. The management believes the company would achieve its annual revenue guidance of | 3000 crore (9M revenues of | 1772 crore) but we expect the company to be able to execute contracts worth | 800-900 crore in the last quarter given that old receivables are already stuck at present and any large growth could distort balance sheet, going ahead. Further, delay in proceeds from old receivables such as TSGENCO, Tecpro...

NIACL is India's largest insurer but continues to make high underwriting losses (9MFY20 COR: 115.8%). We also note company's competitive positioning is only weakening and thus we remain concerned of company's ability of write high quality (profitable) business in the near future. We estimate an FY22E adj. RoE of just 7.1%, and can at best assign a valuation of just 0.65x Dec-21E ABV (less 5% discount for expected 10.4% supply). We rate NIACL a SELL with a higher TP of Rs 130. Driven by a 1,230bps improvement in claims ratio, NIACL reported a better than expected adj. COR of 115.7% (-1,150bps YoY). NEP grew 11.7/4.9% YoY/QoQ to Rs 61.8bn. High investment income (Rs 22.3bn, +65.1% YoY) and low tax rate (17.3%) ensured a high APAT of Rs 10.7bn (vs. -1.1bn in 3QFY19). Post tax one-offs on account of provisioning for gratuity and pension dented profits by Rs 5.8bn to an RPAT of Rs 4.9bn. We retain a SELL with a higher TP of Rs 130.

Same Story Goes on: Wipro came up with yet another weak quarter with muted Q4FY20.

Future Supply Chain (FSCSL) reported yet another weak quarter as standalone Q3FY20 revenue/EBITDA declined 5%/15% YoY (adj. for Ind-AS 116), causing a 59% drop in adj. PAT.