Sell

We maintain Neutral on BHIN (after upgrading from Sell in 4QFY18) as (a) stock has corrected by ~40% from peak (b) on account of savings on DDT and earnings accretion from Indus acquisition and (c) prognosis for rental renegotiations though a risk but weak. Bharti Infratels (BHIN) 1QFY19 operating performance was weak with 4,818 net tenancy losses. Gross tenancy additions too were weak at meager 838. BHIN has lost 19k net tenancies in last three quarters. But, BHIN is yet to see the impact of ~6.7k tenancy loss on financials as it has received termination notices but services continue. Thus, revenue and EBITDA were better than expected.

Revenue growth on account of low base due to GST: Revenues for the quarter at Rs 7357 mn were above our estimates of Rs 6675mn on account of low base due to GST last year. The operatingmargins at 19.1% in Q1FY19 were in line with our estimates of 19%.

Hexaware Technologies (Hexaware) has reported an in-line revenue performance in 2QCY18. Aided by healthy revenue performance in Insurance & Healthcare (+10.9% QoQ), MFG & Consumer (+11.2%) and Professional Services (+9.2%) verticals, its USD revenue grew by 3.8% QoQ (4.7% QoQ in CC terms) to US$168.3mn. However, on YoY comparison USD revenue grew by 10.3%, which marks deceleration for the 5th successive quarter. Volume growth came in at 4.9%, more or less in line with CC revenue growth. The key BFS vertical grew by a subdued 1.8% QoQ, while YoY growth slipped to 9%, marking the slowest YoY USD revenue growth in last 4 years (since 2QCY14) and the first quarter since...

Reiterate SELL with a revised TP of Rs 530 @ 40x Jun-20E EPS (vs. Rs 570 earlier). We reduce our FY19-21 EBITDA estimate by 5-6% and EPS 7-9%. UNSP after blockbuster 2QFY18 reported third consecutive weak quarter especially on margin front (reported margin 9.6%, adjusted 11.3%). Revenue grew by 13% YoY, EBITDA 22% owing to low base of 1QFY18 led by highway ban. Despite management guidance of low-teen revenue growth and mid-teens margin in medium term, margin continues to struggle.

Subdued Performance in TMD segment: LMW revenues decline by 8.6% YoY (12% below our expectations) due to the underperformance of Textile Machinery division by 20.6% YoY. EBITDA margin came in at 8.9% showing a decline of 122 bps YoY.

Hexaware reported growth of 4.7%/3.8% qoq in CC/USD terms as against our estimates of 4.0%/3.3% qoq growth. EBIT margin at 14.0% was largely flat but lower than our expectation (14.8%) despite the significant INR depreciation and absence of wage hikes in Q2CY18. margins were due to the absence of one-time revenue received on completion of a project (not highlighted in Q1CY18), which impacted margins negatively by ~95bps in Q2CY18. Hexaware upgraded its revenue and EPS growth guidance to 12-13% and 13-14%, respectively from 10-12% guidance for both revenue and EPS growth provided at the start...

24 July 2018 HEXWs 2QCY18 CC revenue growth of 9.9% was in line with our estimate (dollar revenue grew 3.8% QoQ to USD168.3m v/s our estimate of USD169m). However, EBITDA margin came in flattish at 15.6% (+10bp QoQ; est. of 16.5%), despite revenue traction and a weaker INR. The impact came from a higher base (one-time 100bp gain from a project) not called out by management back then. PAT grew 25% YoY (14% QoQ) to INR1,534m (est. of INR1,497m), led by higher other income and waiver of ~USD0.4m quarterly liability. HEXW upped its dollar revenue growth guidance to 12-13% (from 10-12%), implying an ask rate of 2.6-3.8%.

Wipro's (WPRO) Q1FY19 revenue growth of 0.1% QoQ CC was slightly ahead of estimates of a 1% decline. At 15.6%, the IT services EBIT margin was largely in line. Management's muted Q2 revenue growth guidance of 0.3-2.3% QoQ (ex-data centre sale) came as no surprise. Regulatory uncertainty in the healthcare business, restructuring of India & Middle East operations, and a muted outlook for the utilities & manufacturing verticals continue to hamper...

HIL Q1FY19 PAT was slightly lower than our estimates due to lower margins in the lighting segment. However we are encouraged by the sales and margin growth reported in other segments/Lloyd. We see margin expansion in...

Lagged Expectation: The bank's standalone performance lagged expectations with slower than estimated momentum on loan growth, NIMs saw further pressure despite the bank conserving on capital, quarter end CASA growth hitting high base and core fee income growth lagging advance growth.