L&T Infotech: We maintain ADD on L&T Infotech (LTI), following a strong operational 2Q and continuity in its growth leadership ahead. A positive outlook on LTI is premised on (1) stronger NN large deal wins (USD 40mn in 2Q vs. USD 20mn in 1Q), broad-based wins, and strong large deal pipeline; (2) growth leadership in BFS vertical (~90% of incremental revenue in 2Q); (3) acceleration of cloud migration (9% QoQ in IMS and 5.9% QoQ in digital); (4) new logo addition reverting to pre-COVID level and recovery in Hi-tech vertical ahead; and (5) SaaS partnerships (Snowflake, ServiceNow). LTI's valuation premium to peers reflects its growth/margin/return metrics outperformance vs. peers. Our target price of Rs 3,065 is based on 22x Sep-22E EPS (DCF-implied at 22x), supported by industry-leading 20% EPS CAGR over FY20-23E, >45% RoIC. Hindustan Unilever : HUL posted a mixed result, with a marginal beat in revenue (3% vs 1% HSIE), but a slight miss in margins. UVG was at +1% (HSIE -2%). Home Care remained weak at 2% YoY decline as demand for fabric wash was sluggish (also impacted by price cuts). BPC recovered well but was flat after a sharp 12% YoY decline in 1QFY21. F&R; clocked strong growth of 19% (ex-GSK), aided by in-home consumption. The company clocked double-digit growth in 80% of its portfolio, which indicates a strong recovery. GM contracted by 145bps YoY due to commodity inflation and adverse product mix. ASP saw a sequential increase as the company resumed investments. We expect a gradual recovery in core categories in...

We upgrade our FY21/22E Revenue estimates by 2%/5% and introduce FY23 estimates. Revise rating to BUY from HOLD earlier with change in TP to Rs. 2,455 (earlier Rs. 2,200) as we continue to value the stock at 53x FY23E EPS.

16 September 2020 Detergents, Tea, Oral Care, etc. Of the remaining 20% portfolio, 15% declined by 45% while the rest 5% declined by 69% during the quarter. Skin Care the largest segment of the remaining 20% portfolio performed poorly in 1QFY21, but has started to recover consistently since June (although it is yet to turn positive YoY). With the Ice-Cream business being a washout in 1QFY21, it contributed significantly to business decline in the quarter. However, the Ice-Cream business is much less salient in the base quarter of 2QFY21 (2QFY20) v/s 1QFY21. Therefore, 2QFY21 is not expected to be as drastically impacted by the Ice-Cream business as 1QFY21. The GSK business was affected by temporary plant shutdowns due to COVID- led disruption and some labor issues. The temporary shutdown at HUVRs Haridwar plant due to COVID issues did not affect operations owing to adequate inventory buffers.

Company rebuilt supply chain, launched 50 products; rationalised of SKUs to supply relevant products and enhanced capacity of sanitisers (by 120x) and handwash (by 6x) to capture growing demand. HUL focuses on improving profitability through cost-savings; synergistic...

Amid the pandemic induced global chaos, one thing is at least clear: a few powerful and quality companies are set to gain more clout and HUL is one such name. With key brands in its bucket, solid quarter( Q1FY21) along with...

operations of the company. But with operating profit margin (OPM) contract by 120 bps to 25.1%, the operating profit was down by 1% to Rs 2695 crore. Other income was up by 6% to Rs 154 crore and thus the PBIDT was down by 1% to Rs 2849 crore. After accounting for higher interest cost (up 15% to Rs 31 crore) and higher depreciation (up12% to Rs 257 crore), the PBT was down by 2% to Rs 2561 crore. The EO expense was Rs 119 crore, a swing of RS 126 crore. Thus the PBT after EO was down by 7% to Rs 2442 crore. However with taxation stand lower by...

Q1FY21 standalone revenue rose 4.4% YoY primarily on account of acquisition of GSK-CH and higher sales of foods & refreshment. EBITDA margin shrank 110bps YoY to 25.0% due to negative impact of COVID-19 lockdown costs, partially offset by savings and synergies of...

Structural story remains intact for the Nutrition business, led by driving penetration (especially in rural markets through sachetization), building demand by increasing relevance, ramping-up of reach across channels and expansion of Nutrition category...

Demand outlook: On a MoM basis HUL has witnessed recovery in business which in April was at 70% further improving in May and in June the company reported 5% revenue growth on YoY basis including 6% distributor inventory re-stocking. However, whether this demand sustains is too early to call out

HUVR has successfully integrated GSK which reinforces our confidence in long-term growth story led by 1) Increased Market penetration by leveraging HUVR's distribution capabilities (increase in reach by 1.75x initially and then 2.25x), 2) Launch of sachets and pouch packs at aggressive price points (20% discount), 3) Low rural penetration of HFD in South and East India, 4) Savings in media costs and material procurement, 5) Reduction in number of depots and 6) Savings of 3% in Royalty costs as it now owns Horlicks brand. Synergy benefit of 250-300bps has been realized already, the HUL expects 550-700bps...

Performance above expectations; Rural yet to pickup We are putting Hindustan Unilever (HUVR) Under Review' for a day to make relevant changes to our model based on the updates from the call on GSKCH merger to be hosted by the company (scheduled for 22nd July 2020, 4.00pm). We will reinstate our earnings estimates and recommendation post the call. For 1QFY21, standalone turnover (including other operating income - OOI and impact of merger with GSKCH) grew by 4.4% YoY to Rs105.6bn (est. 2.3% decline to Rs98.8bn). Underlying domestic consumer business sales (excluding the impact of merger of GSKCH India with HUL) declined by 7% YoY due to...

GSK Consumer addition helped boost operational performance Revenues came in line with our estimate but EBITDA and APAT was a beat. Core business registered 8% volume de-growth - was in line. Core business witnessed 170bps deterioration in margins but merger...