Sell

Pidilite Industries (PIDI) reported below-expected consolidated Q2FY20 revenue growth of 2.8% YoY as CBP volumes dipped 0.9%, offsetting industrial volume growth of 12.6%.

Divesting Kyowa to pursue profitable avenues of growth: Lupin has entered into an agreement to divest its stake in Kyowa to Unison.

Margin Compression Continues.Maintain SELL: During Q2FY20, Eicher s sales declined by 9.3percent YoY to Rs 21.7bn

Loans & Advances declined 6.3% YoY, due to 15.0% decline in the Corporate Banking division representing 61.9% of total loans. Net interest margin (NIM) declined ~60bps YoY and ~10bps sequentially, due to higher cost of funds, fresh slippages and decline in loans. GNPA/NNPA ratio increased sharply to 7.4%/4.4% in Q2FY20 vs. 1.6%/0.8% in Q2FY19, as a result of increasing bad loans. Given the weakening asset quality, declining margins and loan volumes,...

Bharat Forge Ltd (BFL) is a leading player in the forgings industry. The company is serving several sectors including automobile, power, oil and gas, rail & marine, aerospace, construction, mining, etc. Q2FY20 revenue de-grew by 17%YoY due to the slowdown in export (down by 18%YoY) & domestic segment by 36%YoY. The negativity in growth is largely contributed by both CV and industrial segment. EBITDA margin declined by 440bps with 320bps increase in input cost , and lower utilization resulted in higher fixed cost....

Mahanagar Gas's (MAHGL) Q2FY20 adj. PAT underperformed estimates at Rs 2.1bn (+57% YoY).

NMDC reported Q2FY20 EBITDA in line with our estimates; missed consensus estimates (CE) by 6%. On PAT level, it missed our estimates by 13% (CE:21%) due to status quo on tax rates as we believe that company is waiting for tax treatment on capitalization of its steel plant. Street is excited on expectation of fast clearance of NMDC's Donimalai iron ore mines with the...

YoY to Rs39 mn. Company reported net adjusted loss of Rs205 mn during the quarter against PAT of Rs396 mn in 2QFY19. Order inflow during 2QFY20/1HFY20 was down 5%/17% YoY. While many Green Energy Corridor (GEC) orders were tendered out during the quarter, most of them are under final negotiations and expected to be awarded in 2HFY20. The Bangladesh HVDC project has been put on hold in order to ascertain measures to further reduce the project cost. With ongoing liquidity crisis, company raised debt...

The CD division revenue growth at ~9% YoY was largely impacted by slower demand in Q2FY20. While the fan business increased 22% YoY, the appliances, lighting and Morphy Richards business grew albeit at a low pace of ~7%, ~2% and 2.2%, respectively. We believe the CD business is likely to grow at a CAGR of ~13% in FY19-21E led by dealer addition and market share gain in some of the leading categories like fan and water heater segments, going forward. On the EPC front, while illumination and lighting revenue grew ~11% YoY, the transmission line tower and power...

We believe that the current valuation multiples (8.7x EV/e FY22) are already pricing in a full privatisation scenario for BPCL. Only potential improvement in earnings and cash flows can drive re-rating of stock. But this will obviously be realized with a lag and is contingent upon the private player's ability to bring about efficiencies. Our SOTP target is Rs 451/sh (5.5x Sep-21E EV/e for standalone refining, 6.0x Sep-21E EV/e for marketing and pipeline business and Rs 139/sh for other investments). Maintain SELL. Owing to a subdued refining performance in Q2, BPCL failed to impress us yet again. Moreover, BPCLs core EBITDA (adjusted for inventory and forex gains/losses) growth will lag peers over FY20-22 in the absence of refinery expansion.