Sell

Mindtree reported inline quarter on revenue & margin front. Attrition Change in Estimates | Target | Reco increased sharply & is not a surprise. Positives were stable TCV momentum inspite of management transition & broad-based growth amongst verticals....

WPRO: Puzzling margin beat; unlikely to hold up. Trade: Trade deficit narrows as imports shrink. Logistics: Demand climate deteriorates further

Wipro (WPRO) reported in-line revenue growth of 1.1% QoQ CC, but a surprising beat on operating margins (18.1%, +10bps QoQ vs. 60bps est.) that materialised despite the impact of compensation revision.

booking & will impact on revenue conversion of deals. Inconsistency & volatility of revenue growth in Wipro among its key vertical makes us cautious. We believe IT companies will have to invest in digital & people to participate in the strong demand environment. Wipro's management aggressive cost rationalization keeps us skeptical about their participation in demand environment & hence will restrict their revenue momentum. Wipro's key verticals continue to be under pressure due to client-specific challenges (BFSI vertical), company-specific challenges (manufacturing...

The recent cut in corporate tax rate is a big positive for D-Mart as it was hitherto a full tax paying company. Incorporating the same, we revise our earnings estimates upwards by ~15%, thereby having a direct positive impact on cashflow generation. Despite a heavy capex nature of the business, D-Mart has a capital efficient business model generating superior RoCE of 23% and fixed asset turnover ratio of 4.1x. Optimal product assortment and stringent inventory management has led to robust inventory turns to the tune of 12.0x. D-Mart continues to trade on expensive...

Data Integrity issues and repeat observations. With lower tolerance level of USFDA in dealing with non-compliance in injectable unit, we expect WL in near term though resolvable in 12-14 months. There could be lower offtake of partnership products in US from the plant due to those concerns though not...

The USFDA's warning letter (WL) on Mandideep plant identified a long list of Change in Estimates | Target | Reco activities to address the operational deficiencies. Besides, LPC has to...

sustained market share gains difficult. We believe increasing competitors focus on premium products in fans and lighting can drag sales growth. in Lloyd, benign input costs and peaked out expenses on distribution...

We reiterate SELL as (1) Margin pressures are expected to sustain given weak demand outlook and lower utilization levels (as new capacities come onstream). We are building in margins at 25.8/25.6% over FY20/21E vs. 29.6% in FY19 (2) While the launch of entry variants will improve footfalls in the current backdrop, we expect a delayed recovery in demand due to the ongoing downturn (3) VECV is impacted by aggressive discounting by the incumbents. Key Risks: Any reduction in GST rates. We met the management of Eicher Motors. Launch of entry level Bullet and roll out of 250 small format stores are the new strategies to revive volume growth under the leadership of Mr. Dasari. In light of the upcoming BSVI regulations, the emission related cost hikes will impact consumer affordability. Thus, an entry variant in these circumstances will drive customer footfalls. The market response/profitability of the new variants needs to be monitored. We reduce our FY20/21 estimates by ~10% to factor in the sluggish demand and roll forward our estimates. Reiterate SELL with a TP of Rs 14,245 (at 19x Sep21 EPS) as lifestyle segment demand remains challenged