Sell

Expensive Valuations Retain SELL:During Q2FY20, MSIL sales declined by 24.3% YoY to Rs169.9 bn (above our estimates Rs159.7 bn).

Heartening sequential performance:Tata Elxsi (TELX) reported a strong revivalin sequential performance driven by strong volume growth.

We are downgrading MRCO to Reduce given that 1) growth headwinds in Change in Estimates | Target | Reco VAHO and Saffola are becoming structural in nature 2) reduction in trade promotions in tight liquidity conditions can back fire and 3) copra price...

With lower than usual growth in Pharma and declining LSI, JUBILANT sales Change in Estimates | Target | Reco were 3% lower than our estimates while adj. EBITDA and adj. PAT were ahead by 5% and 6% respectively. This is due to better adj. gross margin by 40bps...

Astral Poly Technik's (ASTRA) consolidated revenue grew 8.5% YoY in Q2FY20, aided by piping segment volume growth of 27% (~17% ex-Rex Poly).

FY20E a write-off, BS-VI transition more palatable for PV space The PV segment has suffered heavily amid the overall auto space weakness that has persisted since the 2018 festive period. Rise in ownership costs (additional safety features, higher fuel prices), slowing consumption demand and increasing preference for shared mobility in some pockets posed volume challenges to players. YTDFY20 volume decline at MSIL was at ~25% YoY, which includes a steep decline of 30% in Q2FY20. We believe BS-VI transition would be relatively more palatable for the PV segment since...

Sterlite Tech's performance for Q2FY20 was muted on the EBITDA front while it was weak on the PBT front given the higher depreciation and interest charges from the new optical fibre (OF) capacity that has yet to witness volume offtake. Revenues came in at | 1,360 crore, up 25.4% YoY, led by services revenues (forming 50% of topline) while product revenues were down ~16% YoY on account of demand challenges and pricing pressure. EBITDA came in at | 288.5 crore aided by slightly higher revenues. Reported EBITDA margins came in at 21.2%, a decline of 400 bps YoY. We highlight...

We expect a steady growth in earnings over the next couple of years (earnings CAGR of ~16.2% in FY19-21E versus ~13.1% (incl. amortization of goodwill) in FY13-19), which will aid to generate sizable cash flows. Apart from Niraparib, the visibility of new products has increased with 3 products filing from customers, which will not only accelerate growth, but also de-risk earnings from blockbuster products. The emerging signs of a recovery in Carbogen, bright prospects from Vitamin D business,...

Granules (GIL) posted revenues of INR 6,995mn with 20.4% YoY increase, which was 10% higher than our estimate of INR 6,337mn. Revenue growth was mainly driven by PFIs (43% YoY growth) and Formulation (FD) (34% YoY growth) segments, led by new product launches and better pricing in existing products in the regulated market. EBITDA margin expanded by 322bps to 20.5% level was 159bps higher than our estimate due to 322 bps improvement in gross margin led by improved product mix and easing RM costs. Adj.PAT came above our estimate at INR958mn (est INR671mn) driven by the operationally superior performance. During the quarter, GIL sold its 50% stake in Granules Omnichem JV for ~INR1,099mn( 2.2x Book Value) to JV partner. As it does not delivering desired result with lower capacity utilisation and lower return on capital. GIL is also initiated to sell its stake in...

would be subdued and would remain significantly below 3-year average levels in the backdrop of weak demand, high uncertainty (due to trade wars) and sizeable overcapacity (both in global and domestic). To factor in lower steel prices and reduced volumes, we cut our EBITDA estimates for JSTL by 19%/18% for FY20E/FY21E. We maintain Reduce rating due to stretched valuations, weak earnings and overhang of Bhushan Power and Steel (BPSL)...