Sell

We reckon paint volumes declined for APNT in 2QFY24. We expect growth triggers to be muted in the near term considering (1) weak consumer sentiment may impact volume offtake, (2) international business will likely be under pressure due to geopolitical concerns, (3) rising competitive pressures due to entry by Grasim.

Takeaways from Q2FY24: (1) improved business visibility in core mobile division; its revenue contribution likely to improve from current ~50% to 60%+ by FY26, (2) aim on expanding margins by attaining operating leverage, better product mix and higher backward integration, (3) steady growth in exports with likely exports of INR 20-25bn in FY24 the as per company.

Given the uncertainty from the world's largest economies, we expect delays in decision-making on IT budgets. Keeping this in view, we recommend a SELL on the stock.

YES Bank (YES) reported a muted set of Q2FY24 PAT at INR 2.25bn with 0.2% RoA (vs 0.4% QoQ), pulled down by pressure on margins and elevated slippages. The bank is progressing reasonably well on balance sheet parameters namely CET1, LDR, NNPA, SR, granularity, mix, CASA, etc.

Rossari Biotech’s (Rossari) Q2FY24 HPPC revenue (+21% YoY) was led by a volume push which has hurt prices and margins. Despite rise in utilisation from 50-55% to >75%, EBITDA margin dipped 100bp QoQ to 13.1%. It has chosen to play volume game for FY24 to drive utilisation, and expects to improve margins as plant utilisations stabilise at higher levels, which in our view can cap return ratio in near term.

Mphasis reported a big miss on revenue with flat QoQ CC growth (vs. ISEC: +1.8%) and 0.1% QoQ USD (vs. ISEC: +1.9%; consensus: +2.1%) led by challenges in conversion of TCV to revenue, discretionary spend cuts, and continued challenge in DR business as well as BFS ex-DR. Deal TCV was soft at USD 255mn, down 16% YoY, partly due to higher conversion of pipeline to TCV in Q1FY24.

Quarterly Update Q2FY24