HPCL's Q2FY21 earnings remained robust at Rs 24.7bn (+2.4x YoY).

Both boards approve merger of JSHL into JSL Key highlights of proposed scheme The board of directors of Jindal Stainless (JSL) and Jindal Stainless (Hisar) (JSHL) have accepted the recommendations of the respective board committees and approved the merger of JSHL into JSL. The transaction between Jindal Stainless (Hisar) and Jindal Stainless Ltd is an all-equity merger. As per the approved share swap ratio, 195 equity shares of JSL will be issued for every 100 equity shares of JSHL. Furthermore, as per the...

City Union Bank: CUBK's 1QFY21 earnings were ahead of our estimates on account of lower-than-expected operating expenditure and higher-than-expected treasury gains. Expectedly, sequential balance sheet growth was negligible. The sharp reduction in the proportion of the portfolio under moratorium to just ~12.5% was heartening, and the bank's performance on this front is significantly better than that of its peers, despite its high share of SME loans. We maintain a BUY with a target price of Rs 164 (2.1x FY22E ABV). Our assigned multiple reflects the bank's (1) strong PPOP profile and capital position, which are capable of absorbing shocks, and (2) consistent performance across most parameters. It remains our preferred pick amongst the mid-tier banks. Dilip Buildcon: Dilip Buildcon (DBL) reported 1QFY21 APAT at Rs 336mn (73%/71% YoY/QoQ), marginally behind our estimate, as revenue declined by 16%/23% YoY/QoQ. However, execution was 9% ahead of our estimate as labour availability improved to 90%. CFO during the quarter was negative at Rs 2bn as NWC days increased to 114 days from 93 days at FY20 end. Net D/E also increased from 0.8x on Mar-20 to 0.92x on Jun-20. Nonetheless, despite muted ordering in the sector, the company has won orders of Rs 107bn till date in FY21. We maintain BUY on DBL, with a target price of Rs 466/sh, given its (1) strong and diversified order book of Rs 261bn and (2) continued focus on asset recycling. We have valued EPC business at 8x FY22E EPS and HAM at 1x P/BV. Deccan Cements: Deccan Cement's (DECM) 1QFY21 volume...

AU Small Finance Bank: AUBANK's 2QFY21 net earnings were ~110% ahead of estimates, buoyed by gains from the stake sale in AAVAS. Adjusted earnings, too, were ~28% ahead of estimates, on account of lower-than-expected provisions. The bank saw a sustained improvement in collection efficiency and did not make incremental COVID-19 related provisions. While these trends are promising, we continue to model for a sharp rise in GNPAs and elevated provisions in FY21E. Strong CASA growth, led by retail deposits, was another positive. We like the bank for its strong fundamentals and believe that its long-term prospects remain intact. We maintain ADD with a target price of Rs 770. ICICI Securities: Led by healthy trading activity (ADTV cash/derivative: +3.5/32.3% QoQ), ISEC reported pure broking revenue growth of 10.2% QoQ. ISEC also gained market share in the cash segment by 240/40bps YoY/QoQ to 11.1%. This primarily drove the 12.5% PAT beat. We believe this is cyclical, and as the volatility and retail participation reduce, we expect ISEC's market share to normalise. Additionally, we remain watchful of the impact that increased upfront margin requirements could have. Discount brokers acquiring a higher client share remains a concern. Driven by the revenue and PAT beat, we increase our FY21/22/23E APAT estimates by 8.8/3.2/4.3%. Given the highly cyclical nature of the business, we are concerned that we may be closer to peak earnings and worry that the market may be giving it a closer-to-peak multiple. We maintain an ADD rating with a higher target price of Rs 550, i.e. 23x Sep-22E EPS....

Birla Corporation (BCORP) has reported extremely good set of numbers for 2QFY21 as its revenue and EBITDA were 11.7% and 41.7% ahead of our estimates. The beat was driven by lower operating costs and better volume and realisations. Despite 2Q being a monsoon quarter, the company reported its best EBITDA/mt in over a decade and best ever absolute EBITDA in this quarter. Along with better profitability, the company has managed to cut down its debt by Rs1.1bn over the past 12 months despite spending Rs8bn in capex for its Mukutban (Maharashtra) plant. Overall, we believe that better regional presence, focus on trade segment, higher blending ratios, focus on cost rationalization and modernization will result in sustained improvement in BCORP's earnings....

20 July 2020 Mahindra Finance (MMFS) reported 1QFY21 PAT of INR1.6b (up 128% YoY; down 29% QoQ), a 3% miss. While PPoP beat our estimates by 25%, higher-than-expected provisions at INR8.4b led to the modest PAT miss. While the value of assets financed declined sharply, we note the decline in Tractors was much lower (35% YoY). Around half of the opex cut is sustainable, as per management. Gross Stage 3 assets increased 75bp QoQ to 9.2% due to slippages from tractor owners who had not availed moratorium. provision coverage to 40% QoQ from 31%. ECL% increased to 5.5% v/s 4.4% in 4QFY20 and 3.6% in 1QFY20. MMFS is comfortable on the ALM front, with liability repayments of INR54.7b in 2QFY21, against a cash balance of INR85b.

IOCL's Q2FY21 EBITDA of Rs 94bn (2.6x YoY) was above estimates.

We initiate coverage on Deccan Cements with a BUY for a price target of Rs. 600 (6X EV/EBITDA FY23) representing potential appreciation of 60% over the next 24 months from the CMP of Rs. 380

We broadly maintain our estimates for FY21E/ FY22E despite muted H1FY21 as we expect execution to pick up significantly from Q3FY21E in projects worth Rs33.4 bn on receiving the appointed date coupled with stabilization of labour and supply chain issues. We introduce FY23E and expect 4.2%/ 23.6%/ 23.3% revenue growth for FY21E/...

Birla Corporation Ltd. (BCL) reported a strong beat in Q2FY21 led by better than expected volumes and realisation.

Management's strong commentary despite weak performance was driven by 1) Strong deal pipeline, 2) Decent performance in all verticals except Travel, 3) No further erosion in Airline Services....

Hindustan Petroleum Corporation: We maintain ADD on Hindustan Petroleum (HPCL) with a price target of INR 228, owing to an expected recovery in demand for petroleum products and, subsequently, refining margins. 1Q EBITDA and APAT were 3% and 9% above estimates owing to higher-than-anticipated other income. EBITDA came to INR 44bn (vs. EBITDA of INR 16bn in 1QFY20 and an operating loss of INR 17bn in 4QFY20). Refining business' inventory gains were INR 2bn, and marketing inventory gains were INR 4bn. Forex gains stood at INR 490mn. Adjusting for these, core EBITDA stood at INR 37bn (+85/9% YoY/QoQ). DLF: DLF reported revenue of Rs 5.5bn (-59%/-68% YoY/QoQ, 12% miss). Issuance of the possession letters got adversely affected during the lockdown and, hence, impacted revenue recognition. Rental business was impacted owing to the retail malls remaining shut due to lockdown and waivers given by DLF to tenants. Construction has recommenced at all sites, and DLF is operating at ~ 65% of pre-COVID levels. The company has not availed interest moratorium. Office segment remains robust with longer-term drivers in place and robust collections of 95%. We do believe that rental escalation may remain soft. Retail recovery will be much more protracted as its worst hit. Balance sheet remains comfortable with net D/E of ~0.1x.

Burger King India Limited (BKIL) has exclusive pan-India master franchisee rights to open and operate BURGER KING restaurants in the country. It is one of the fastest-growing QSR chains in India, reaching 200 outlets in its first 5 years of operations. An increase in the number of dual-earner families, changing lifestyle, rising consumerism and higher internet penetration will drive eating out...

Burger King India Limited (BKIL) has exclusive pan-India master franchisee rights to open and operate BURGER KING restaurants in the country. It is one of the fastest-growing QSR chains in India, reaching 200 outlets in its first 5 years of operations. An increase in the number of dual-earner families, changing lifestyle, rising consumerism and higher internet penetration will drive eating out...

Negotiations restarted for SBI Macquarie stake sale with prospective buyers and deal progressing in right direction as per management. ASBL reported decent quarterly performance with execution ramping up (6% YoY growth) across its project sites led by rise in labour availability. Margins...

Negotiations restarted for SBI Macquarie stake sale with prospective buyers and deal progressing in right direction as per management. ASBL reported decent quarterly performance with execution ramping up (6% YoY growth) across its project sites led by rise in labour availability. Margins...

SBI Macquarie stake sale deal continues to be an overhang on the stock, negotiations to likely restart with prospective buyers. ASBL reported resilient operational performance in a tough scenario with revenues falling 34% YoY due to Covid-19 pandemic, impacting construction...

During COVID-19 crisis, packaging business was least impacted as people are more preferring packaged food in order to maintain hygiene and safety. Management expects, domestic demand for polyester packaging to grow in between 12-14% going ahead, which could be a phenomenal demand growth....