Sell

Bosch India’s (BOS) Q1FY24 EBITDAM at 11.3% (down 160bps QoQ) missed consensus and our estimate of ~12.5%. This was because higher mix of traded goods pulled down GM and new business-related expenses increased other expenses, thus impacting overall profitability.

Navin Fluorine International’s (NFIL) Q1FY24 net profit dipped 17.5% YoY to INR 615mn despite revenue growth of 24% YoY and lower depreciation charges of INR 150mn. Honeywell supply plant had two months of lost sales due to shutdown and volatility in demand forecast; one molecule for agrochemicals had nil sales due to destocking.

Tepid volume growth of 5% YoY with little support from realisations kept Q1 revenue growth muted

Asahi India Glass’ (AISG) Q1FY24 EBITDAM at 20.1%, was up ~330bps QoQ and higher than I-Sec estimate of 17%. The beat was driven by auto segment EBIT margin improvement of ~730bps QoQ to 13.5% (9-quarter high) vs architectural segment EBIT margin remaining flat QoQ at 21%. Increase in the auto margin was driven by price hikes taken by AISG to pass on input cost inflation, operating leverage and improved mix.

Options ADTV has increased exponentially for MCX over the last few years (Q1FY24/Jul’23: INR 629/735bn) while futures ADTV has dipped below INR 200bn levels in Jul’23. Futures plus futures equivalent option volumes (on a like to like basis, MCX's unit revenue from one option notional ADTV is equal to 40% revenue earned from one future ADTV; this ratio keeps changing based on options premium turnover and the rates) stands at INR 478bn as of July23 versus INR 320bn in FY20, while our estimate for adjusted ADTV stands at INR 640bn for FY25E.

Rossari Biotech’s (Rossari) Q1FY24 revenue dipped 5.5% YoY to Rs4.1bn due to drop in raw material prices, while volume grew ~20% YoY. Gross profit margin dipped 10bps QoQ despite softening raw material prices as the company focused on growing volumes and driving operating leverage. EBITDA margin has improved 70bps QoQ to 14.1%. Rossari expects revenue growth of 12-14% and EBITDA margin at 14% for FY24 despite a weak Q1FY24.

Recommendation: We continue to have a negative outlook on the business in the short term. We maintain our SELL rating on the stock.

Indus Towers’ (Indus) Q1FY24 performance was good on two counts: 1) tenancy addition accelerated with a net add of 5,048 despite 518 exits; and 2) there was no provisioning that had marred EBITDA previously. We believe the high rate of tenancy addition is unlikely to sustain as Bharti is close to completing its rural 4G rollout; 5G rollout over the next 12 months will largely come as loading.

Blue Dart Express’ (BDE) Q1FY24 EBITDA fell short of our estimate by 10%. Key points: 1) number of shipments rose ~9% and tonnage 2.6% YoY; 2) both revenue and EBITDA per shipment continue to decline; 3) EBITDA margin contracted to 15.4% (Q1FY23: 20.7%) – lowest since Q1FY20 – on unfavourable price-cost impact despite the benefit of lower ATF prices.