Sell

Merck's Q2CY18 results were a mix bag. Topline was 27.2% below our estimates given the divestment in the business, however PAT was 7.6% above our estimates given better than expected EBITDA. Sales grew by 33.3% YoY to Rs2.2bn. EBITDA margins were at 23.1% up QoQ from 12% given higher gross margins and reduced OE. APAT was...

Execution progress in Raigarh-Pugalur UHVDC order, traction in medium voltage portfolio and a nascent revival in the process industries supported strong growth in topline in Q2CY18. As a result, revenue grew by robust 22% YoY led by strong execution across robotics and motion (34% YoY) & Power Grid (41% YoY) segments. Industrial Automation posted moderate growth of 7.5% YoY while electrification products reported flat numbers in Q2CY18. Order inflow for the quarter stood at Rs 2,474 cr with Rs. 633 cr coming from robotics and motion, Rs. 713 cr from electrification products, Rs. 413 cr from Industrial Automation and 856 cr from power grid segment....

Margins Contraction in Pumps Segment Continues:The company's revenue has grown by 13.7% YoY due to growth in pumps and valves segment, EBITDA margins improved by 65 bps majorly due to improvementin margins of valves segment.

Background: Capital First Ltd (erstwhile Future Capital Holdings Ltd) is a non-deposit taking NBFC with large focus on retail lending. Capital First provides loans to retail customers (in the form of secured and unsecured loans to small and medium enterprises (MSME), consumer durables loans, two-wheelers loans and housing loans) and corporate customers (loans to real estate developers) on a selective basis. AUM (Asset under Management) stood at INR 296bn as of 1QFY19 with a mix of Retail- 91%...

Astral Poly Technik's (Astral) Q1FY19 result came largely in line with estimates where EBITDA/adj. PAT were 6.3%/3.4% above our estimates respectively while revenue was 2.4% below expectation. Revenue grew by 17.1% YoY to Rs4.7bn, EBITDA was up 60.7% YoY to Rs779 m and adjusted PAT was up 76.8% YoY to Rs454 mn. Plastic segment saw a volume growth of 15% YoY to 22,476mt whereas Adhesive business witnessed revenue growth of 25% YoY to Rs1.4bn. Both Plastics and Adhesive business witnessed a margin expansion of 412bps and 483bps YoY respectively. We keep our estimates unchanged and expect revenue/EBITDA/PAT to clock a CAGR of 19%/20%/24% during...

Mahanagar Gas's (MAHGL) Q1FY19 earnings beat estimates at Rs 1.3bn (+3.2% YoY, +22.5% QoQ), driven by (a) above-expected volumes of 261mmscm and (b) stronger adj. EBITDA margins of Rs 8.6/scm. CNG volume growth (+12.6% YoY) looks unsustainable as management maintained its 6-7% annual growth guidance. Though we raise FY19-FY21E earnings by 7-9% on higher margins and hence increase our DCF-based fair value to...

in data volume. Capex stood at Rs9.8bn and annual capex guidance intact at Rs70bn. Vodafone are more vulnerable to lose subscribers during their merger integration. Weak Q1FY19 has led to another round of EBITDA downgrade. Current cash balance (after fund raising & tower monetization) and merger-related benefits would take care of cash burn during FY19-20E. However, net debt/EBITDA for merged entity to remain at elevated levels of ~6.7x in FY20E, restricting aggression on capex spends and retaining RMS. We are already factoring in aggressive opex savings of >Rs120bn over FY19-20E. We retain SELL with TP of Rs39, valuing at 8x FY20E pro-forma Sept'20 EBITDA....

While the performance largely mirrored expectations, however persistence inhigher non-corporate slippages further cements our concerns on the SME/Retail book which were flagged of in the last quarter results.

Dismal Show on Rising Global Spot Coal Prices & Lower PLF JSW Energy (JSWEL) continued to report a dismal performance in 1QFY19 with its PBT declining by 27% YoY to Rs2.4bn in line with our estimates. Reported PAT grew by 5.7% YoY to Rs2.2bn owing to lower effective tax rate of 9.8% (vs. 33.5% in 1QFY18) on deferred tax benefits. We maintain our REDUCE recommendation on the stock with a revised Target Price of Rs62. Higher Realisation Drives Revenue Growth; Consolidated PLF Declines JSWEL's revenue rose by 4% YoY to Rs24.4bn owing to 11% YoY rise in overall realisation to Rs3.9/ unit despite 4.7% YoY fall in generation. It generated 6,086mn units in 1QFY19 (vs. 6,400mn units...

Margins Falter despite strong revenue growth: In Q1FY19, total revenues of Alembic Pharma increased by 33% YoY to Rs 8.6 bn (above our estimates Rs 8.0 bn). The Company's operating marginsincreased from 15.7% to 17.5% YoY (our estimates 20%).