Sell

Sun Pharma (SUNP) posted a 6% EBITDA miss on in-line sales, driven by higher staff cost (+7% QoQ), lower gross margins (115bps QoQ) and lower R&D; cost (6.4% of sales).

Reported lowest ever EBIT margin for diagnostic segment at 25% We reduce our earnings estimate by 56% and 42% for FY21-22E and downgrade THYROCARE to SELL (earlier HOLD) with a new TP of Rs307 (earlier Rs523) 18x PE on FY22E.We believe THYROCARE earnings to be significantly impacted due to 1) loss of core business due to COVID lockdown and low footfall till 1HFY21E 2) post lockdown to struggle for competitive market share 3) high operating expenses (to comply with COVID guidelines).Despite having a track record on asset optimization, EBITDA...

We recommend a SELL on TITAN due to reduced consumer spending on discretionary items which could sharply affect its profitability in H1FY21.

We recommend a SELL on BAJAJ FINANCE with a Target Price of Rs 1,636, a downside of 9% from CMP of Rs.1,798 and Stop Loss Rs 1,888

While India continue to lead growth (pre-buying in March aided growth, in-line), exports were a drag. Gross margin at 72.4% was a function of strong growth in India, leading to impressive EBITDA margin of 28.2% (our estimate: 25.4%). Though company remains confident of outperforming IPM growth, we remain wary of the exports (US 2 key facilities under WL and OAI, Brazil adverse currency and batch traceability regulations in Germany) given the weaker outlook....

Astral Poly Technik's (ASTRA) Q4FY20 performance was disappointing, with consolidated revenue dropping 19% YoY and pipe volumes down 13%.

Apcotex registered a revenue decline of 24% YoY to | 116 crore, largely impacted by sluggish growth from NBR segment due to slowdown in the auto sector along with a fall in realisation due to passing on of benefit of lower RMAT prices. Further, fall in tyre latex along with carpet latex revenue also weighed on the overall performance. The company was struggling to maintain its historic gross margins of 30-32% in the last few quarters due to increase in NBR imports from Europe at lower prices leading the company to sell NBR at losses or breakeven level in the last few quarters. This was...

JSW Steel (JSTL) posted Q4FY20 EBITDA below our estimates by 11% due to lower than expected earnings in domestic subsidiaries and higher intercompany eliminations. Impacted by tepid domestic demand and lower exports, sales volume fell 8% QoQ/14% YoY to 3.7mnt (PLe:3.75mnt). Realisations rose 8% or Rs2,880/t QoQ (down 10% or Rs4,310/t YoY) to Rs40,600 (PLe:Rs40,415). Cost/t remained flat QoQ to Rs32,585 (PLe:Rs32,600)/t. Hence, EBITDA/t came in line with our estimates at Rs8,700 (PLe:Rs8,500), up 45% QoQ/14% YoY. Management guided to maintain volumes in FY21e at 15mnt on expectation...

25 May 2020 10.9% SSSG and a strong 18 store additions drove 24% YoY revenue growth (in- line) in FY20. However, the company reported a big 22% miss on EBITDA with 4% YoY growth. We have cut our EBITDA estimate by 16.8% for FY21E due to 50% of stores being closed over AprMay20, lower gross margins from increased non- discretionary revenue, and higher opex. However, we maintained our FY22E EBITDA estimates given the sharp recovery expectation as it pertains to non- discretionary. DMARTs consolidated revenue grew 24% YoY to INR63b (down 8% QoQ, 4% above est.) on account of sales of only essential products at DMART stores. In Mar20, revenues grew only 11% YoY (v/s Mar19) due to the lockdown effect witnessed in the nine days of Mar20. Hence, implied revenue growth over JanFeb20 is ~30%. For FY20, revenue/EBITDA grew 24%/8.1% to INR249b/INR20.2b with flat EBITDA margin at 8.1%.

Though significant negative impact is expected on sales; costs like rent, other operation related costs would not decline in the same proportion. Hence Bata would take abnormally longer time to restore...