Sell

flavors and Palmolive Luminous Oil shower gel Colgate reported disappointing numbers with just 4% equated volume growth (percentage increase in dozen packs) despite 250bps increase in ad-spends (est tonnage volume growth at 1.5-2%). Although CLGT has stopped sharing...

We cut HAVL's FY20 and FY21 EPS by 16.5% and 13.5% respectively given 1) Change in Estimates | Target | Reco slowdown in core portfolio growth due to deteriorating demand scenario in real estate, industrial & infrastructure segments and 2) poor visibility on...

Revenue growth lower than estimates: Revenues for the quarter at Rs 8821 mn were below our estimates of Rs 9469mn on account of lower traction.

Higher Capex and Debt to Impact Profitability CEAT has delivered a strong operating performance in 2QFY20. Its EBIDTA margin was 110bps higher than our estimates, supported by lower commodity cost, while EBIDTA was 14% higher than our estimate. Its volume declined 3% YoY due to subdued sales in OEM segment, flat volumes in replacement and single digit growth in exports. Its consolidated revenue fell by 5% YoY and 4% QoQ to Rs17.5bn. Consolidated EBIDTA declined by 5% YoY (+3% QoQ) to Rs1.7bn, while adjusted PAT fell by 46% YoY as well as 46% QoQ to Rs445mn due to higher depreciation and interest outgo. EBIDTA margin improved 10bps YoY (+53bps QoQ) to 10.1% vs....

We expect revenue to grow by 13.4%/13.5% YoY in FY20E/FY21E. We estimate LTL EBITDA margin to compress by 67bps/87bps YoY to 16.5%/15.7% for FY20/21E mainly due to higher employee cost inflation and lower operating leverage. LTL EBITDA growth rate is likely to remain in high single digit mainly led by moderation in growth rates going ahead. Incorporating the improved profitability and turnaround time for stores along with the improvement in ROE due to tax cuts, we revise our PE multiple valuation to 40x (vs. 37x earlier). Our revised target price of Rs1,340...

ICICIGI is best positioned to benefit from changing regulations in motor which will drive down both claims and tariffs. However, we expect high competitive intensity and lower motor TP tariffs (de-tariffication/price reduction) to restrict underwriting margins and investment profits. Accordingly, we rate ICICIGI a SELL with a TP of Rs 1,060 (Sep-21E P/E of 26x and a P/ABV of 5.6x). ICICIGIs 2QFY20 saw an NWP decline of 2.1% YoY to Rs 21.7bn, increase in COR (calc.) to 103.7% (+184bps YoY) as expenses increased while claims ratio declined, and lower investment yields of ~8.4% (-121/-111bps YoY/QoQ).

Zee Entertainment overall operating performance was weak given the muted domestic ad growth. Revenues came in at | 2122 crore, up 7.3% driven by 26.8% YoY growth in domestic subscription to |646 crore which was driven by better monetization on account of implementation of New Tariff order. Domestic advertisement was muted at | 1225 crore (up 1.4% YoY), owing to dual impact of conversion of FTA channels into paid and overall weakness in ad environment due to macroeconomic challenges. EBITDA came in at | 692.9 crore, up 2.9% YoY, while consequent margins came in at 32.7%...

TVS Motors (TVS) is the third largest two- wheeler manufacturer in India with a market share of 14.8% in FY19. Q2FY20 revenue de-grew by 13%YoY due to sluggish Industry...

The stock has surged ~35% in a month and almost fully reflects our bull case, leaving little upside. Government's demonstrably weak stance on auto fuel pricing (across different political regimes), expected credit rating downgrades (likely on losing implicit GoI support on balance sheet) and rich valuations compel us to downgrade BPCL to SELL A group of Secretaries on disinvestment has approved the strategic sale of Government of Indias (GoI) entire 53.2% stake in BPCL. The Department of Investment & Public Asset Management (DIPAM) has floated a request for proposal inviting transactions, legal advisors and asset valuers for this purpose. Yet, there is uncertainty on whether this will lead on to genuine privatisation or yet another stake sale to a Public Sector Unit (PSU).

Infosys Limited is the second-largest Indian IT company that provides business consulting, information technology and outsourcing services. The Group's services include application development, product co-development, system implementation and system engineering, targeting businesses in the...