V-Guard Industries (VIL) posted revenue of Rs6.2bn in 2QFY21, flat YoY but 9%/11% above our/consensus estimates. Categories such as pumps, fans and digital UPS performed better in the quarter. Revenue from South region fell 3% YoY to Rs3.8bn (61% of total sales), while Non-south region revenue was up 4% YoY at Rs2.4bn (39% of total sales). Revenue of Electronics/Electricals segments grew 2% YoY each to Rs1.7bn/Rs2.8bn while Consumer Durables segment revenue declined 7% YoY to Rs1.6bn. Gross margin declined by 220bps YoY to 31.6% due to underutilization of Sikkim plant and unfavourable product mix. EBITDA fell 5% YoY to Rs739mn, leading to an operating margin of 12%, down 50bps YoY on a high base. Excluding the ESOP provision write-back...
Automobile sales in October 2020 are likely to be strong in anticipation of festival demand and normalization of supply chain, strong sentiments from rural and semi urban markets and rise in preference for personal mobility. OEM commentaries suggest that festivals have started on a good note and the urban markets are catching up with the recovery. Demand continues to be inclined towards the lower end of the segments. Dispatches from OEMs are likely to improve sequentially as most OEMs have achieved pre-covid utilization levels. For majority of OEMs, dispatches are expected to be higher on a YoY basis on channel filling and a low base. Our interactions with the dealers suggest that retail sales, especially in the 9 days of festivals, have been around last year's levels and Diwali/Dhanteras are...
Can Fin Homes (CFHL) reported strong earnings growth of 31.5% YoY and 37.9% QoQ, led by record high margin of 4.1% (+39bps QoQ) and favorable cost trends (opex flat YoY). The margin expansion in the quarter came on the back of a sharp drop in cost of funds, which was down 21bps QoQ at 7.1%. Incrementally, the company is borrowing at 6.54%, which means that margin is likely to continue on a strong trajectory, at least in the near term, which should keep the earnings momentum going despite soft loan book growth. The management's long-term guidance on margin remains at 3-3.4%. Operating profit was up 36.4% YoY and 10% QoQ. Provisions for the quarter stood at Rs151mn. Total covid provisions on the balance sheet...
Various cost optimisation measures to protect margins The company witnessed QoQ increase in EBITDA margin led by various cost optimisation measures. On a YoY basis, the base quarter includes ~| 10.2 crore of Esop provision. Adjusting with one-off expense in Q2FY20 and Q2FY21, EBITDA margin would see an improvement of 70 bps YoY. The...
Background: Indian Bank features among the mid-sized banks in the public sector space. As of 2QFY21, the bank had business of about 8.6tn operating through a network of 5996 branches. Prior to amalgamation with Allahabad bank, Indian Bank's footprint was largely skewed towards the southern states of Tamil Nadu, Karnataka, Andhra Pradesh and Kerala. Now the combined entity has a stronger presence in Central and Eastern states of India too. With RoA of ~0.26%, the bank features amongst the most profitable banks in the PSU space. The bank has...
Indian bank is a mid-sized bank in the public sector, with a loan book size of Rs. 3.6 lakh crore and deposit base of Rs. 5 lakh crore. Allahabad Bank was merged with Indian Bank on 1st April 2020 and operates...
We expect the company to positively endure its robust pickup in collections, focused book, disbursements and restrained debtors, yet asset quality remains questionable. Hence, we value the stock at Rs. 74 based on ~0.9x FY22E BVPS and our ACCUMULATE rating. Elevated disbursements; Balanced loan book LTFH's focused loan book recorded a mild growth of 1.2% YoY at Rs. 94,172cr, as Rural finance grew 6.7% YoY partially offset by a granular growth in Housing (+0.9% YoY) and de-growth in Infrastructure finance (-2.3% YoY). Salaried class loan book went up...
Q2FY21 revenue grew 7.6% YoY led by higher volume (~20%YoY), largely supported by higher rural demand. EBITDA margin expanded 580bps to 27.3% on higher utilization and stringent cost reduction measures. PAT surged 55.1% YoY, while adj. PAT rose 113.1% YoY after adjusting for exceptional item. While volumes have improved, clinker-to-cement conversion ratio has also improved by 2% YoY thereby aiding margin growth. Considering higher volume growth, robust utilization, we are positive...
Early data for September'20 indicate that 57.6% indicators were in the positive territory, up from the 42.2% suggested by the early indicators in August'20. Final data for August'20 suggest that 34.69% indicators were in the positive territory, same as in July. The rebound in economic activity is encouraging, but we believe that it is a reflection of normalisation of supply chains, pent-up demand and the start of the festive season. We would therefore be cautious on the sharp rebound, although we anticipate a gradual recovery going forward. Rural demand has largely sustained as evinced by robust currency in circulation and tractor sales in September'20, although government spending was down by 15.2% YoY in August '20. Tractor sales were up by 28.3% YoY and two-wheeler sales were up by 22.1% YoY. Passenger vehicle sales were up by 43.8% YoY, reflecting...
Broad based growth across Geographies and Verticals All verticals except Telecom & Hi-tech (down 0.6% QoQ in USD terms) were up, Transportation (up 4.1% QoQ), Industrial Products (up 4.6%), and Plant Engineering (up 8.1%). Medical Devices continues to report healthy growth at 7.4% QoQ. Broad-based growth across geographies led by RoW, up 10.8% QoQ...
Retail sales have been buoyant and drove total volume growth, despite lower non-trade demand. In South, project demand has picked up in the past two months, thus moderating regional vol decline in 2QFY21. Utilisation recovers to last year level: Despite the COVID-induced slowdown, cement demand has recovered to last years level in 2Q, leading to flattish utilisation YoY at 68%. During Q2, we estimate aggregate sales for 13 cement companies under coverage would have grown 2% YoY, led by volume growth across north, central and east markets, while volume decline trend would have continued in south and west markets (albeit at a slower pace).
Plants are currently operating at the utilisation of 70-90% of the pre-COVID level. Plant utilisations of companies that cater to end-user industries engaged in essential services such as pharmaceuticals and agrochemicals are even higher. The Automobile industry has shown signs of recovery in 2Q; thus, in the ensuing quarters, we expect a recovery in the segments of companies catering to the demand from the automobile industry. Our chemical universe is expected to report a stable 2Q, despite the concerns of the COVID-19 pandemic. Revenue for our coverage universe is likely to improve by ~2.9/14.7% YoY/QoQ and EBITDA may be up by 4.4/7.5% YoY/QoQ. The nationwide lockdown has impacted operations of the majority of chemical companies in 1QFY21, but the pick-up has been rapid in 2Q.
Saw correction in September month after a 5 long months Correction remain short lived on account of expectation of additional stimulus Liquidity will keep on supporting market Ultimate goal of full revival of economy in US is still away Covid cases are still at higher level and Europe is seeing second wave Vaccine is expected in near term but implementation can take time India has seen recovery ahead of expectation despite higher Covid cases Q2 may see Sales decline of 6% and Q3 likely to be flattish yoy Recovery more in favour of bigger players Valuation at 10 Year High Market likely to be range bound in near term Need to be careful in small cap in near term
