Sell

APL's EBITDA margin fell by 900bps YoY to 15.3% led by higher fuel cost, arrears of transmission charges (Rs2.8bn) and lower fixed capacity charges. Fuel cost/unit increased to Rs2.7/unit from Rs2.5/unit in 3QFY17. Finance cost marginally declined to Rs14.1bn from Rs14.3bn in 3QFY17 due to reduction in short-term loans. Delayed payment surcharge led to rise in other income. Its...

The steady-state RoCE of UCC, SRCM's latest target, is unclear. While SRCM's domestic continues to meet our expectations, capital allocation is an area of grey. Moreover, defying the pan-India trend, realizations have been flat. Yet volumes of 5.3mt fail to impress us, given a lower base. With rising pet-coke prices and environmental regulations, the operating profit per ton could be under pressure. Though EBITDA has moved up by a fifth to Rs5.7bn in Q3FY18. We assume the deal goes through. And UCC contributes higher RoCE by FY19. Even then, at the current valuations, assuming de-bottlenecking and inorganic...

TCS posted a 1.0% sequential growth in USD revenues to US$4,787mn v/s US$4,801mn expected. In rupee terms, revenues came in at `30,904cr V/s `31,049cr, up 1.2% QoQ. In Constant Currency (CC) terms, the company posted a 1.3% QoQ growth with volume growth coming in at 1.6% QoQ (highest growth in three years for the December quarter). On pro..

Shree Cement's (SRCM) EBITDA recovered 8% YoY in Q3FY18, driven by 8% YoY cement volume growth while power segment delivered EBITDA loss. Rising fuel and freight costs dragged down profits across both the segments. We expect low base effect to turn favourable on YoY basis, in subsequent quarters. While the 4mn MT inorganic acquisition of Union Cement in UAE is at low cost of USD75/MT, weak demand in the GCC region has kept its revenue/EBITDA flat over the past four years and hence we do not see any major positives here. SRCM's valuation remains extremely expensive at 25x/21x/17x its FY18/19/20E EBITDA. We re-iterate SELL with a revised TP of Rs15,650....

Guidance has been retained both on revenue growth as well as profitability front. Management remains optimistic about outlook for CY18. Digital offerings are driving growth in structurally challenged BFSI/Retail verticals. for further gains in OPM is limited, owing to lack of headroom for improvement in levers such as utilization (now at 85%, net hiring soft YTD), delivery mix (demand to be more onsite centric) and SG&A; efficiency (expense flat in 9MFY18). We expect revenue/earnings growth CAGR of 6%/5% over FY18-20E and expect the stock to underperform given its soft growth metrics (9MFY18 TCV down 19%) and likely risk of...

In absence of details of mix of tenancy losses, timing and event uncertainties, our numbers are on business-as-usual basis. But, we provide the impact of each of the events separately. Bharti Infratels (BHIN) share price has declined from a peak of Rs 480 to Rs 373 (22%) in last two months. Despite recent decline, we reiterate our Sell rating with revised TP of Rs 310 (vs. Rs 387). Our TP is based on 20x Dec-19E EPS (Rs 356) for business as usual (vs. 24x earlier) less impact of Rs 60/sh from Voda-Idea merger (vs. Rs 39/sh earlier) and likely acquisition of Voda-Idea stake in Indus at EV of Rs 5mn/tower (+Rs 15/sh).

Volume grew by impressive 16% YoY led by strong growth in US, Europe and ROW markets coupled with strong demand in agriculture and mining tires. Realization/ton also increased by ~6% YoY led by favourable product mix and currency hedges (Euro realization at Rs. 80 as against Rs. 75-76 for FY17). Hence, reported revenue surged by 22.5% YoY. Given strong demand outlook across geographies the management has increased its volume guidance to 190,000 to 195,000 tons from 185,000 to 190,000 tons. We expect volume CAGR of 14.5% over FY17-20E as demand continues to be buoyant across segments (especially the OTR space) and the company continues to make in-roads with various OEM's....

On a positive note, the slippages were at the lowest level in last 15 quarters as it declined by 47% QoQ in Q2FY18. As a result, Gross/Net non-performing asset (NPA) ratios improved by 43/23 bps sequentially to 12.6%/6.5%. However, one of the major concerns was the 80 bps QoQ increase in SMA-2 loans to 4.4% which raises doubt on the sustainability of lower slippages. Further, while upgradations and recovery declined by 61% QoQ, write-offs increased by 20% QoQ. Moreover, the overall stressed loans remained at ~20%, and the RBI...

Cadila Healthcare posted good set of numbers for 2QFY2018. Sales came in at `3,155cr (`2,800cr expected) v/s. `2,336cr in 2QFY2017, a yoy growth of 35.0%, mainly driven by 66.2% growth in sales of US formulations. On operating front, the EBITDA margins came in at 24.7% (21.3% expected) v/s. 21.4% in 2QFY2017, on the back of higher than ex..

For 2QFY2018 Indoco Remedies sales came in at `280cr, in line with expectations, posting a yoy growth of 1.3%. The growth was impacted by lower exports, mainly on the back of US (` post a 69.5% yoy dip in sales). Indian Formulation sales posted 11.5% yoy growth. On operating front, the EBITDA margins came in at 12.9% (11.8% expected)...