We believe that Brand Factory will continue to reel under the stress of a consumption slowdown for a couple of quarters. Ergo, the management has re-calibrated its expansion plans from 25 to 18 stores in FY20. While Brand Factory struggles, we believe Central will chug along and add 5 stores annually. We revise our DCF based TP downwards to Rs. 500 (earlier Rs. 550) which largely mimics the downward revision in FY21/22 EBITDA estimates by 8.8% and 11% respectively. Maintain BUY FLFL's revenue grew 3.1% YoY to Rs. 16.7bn (4.4% below estimated Rs. 17.4bn). Revenue was mainly impacted by the poor performance of its off-price format Brand Factory. While, top-line disappointed, margins were protected. Gross margins grew by 146 bps YoY to 34.9% (vs est: 34.5%). Adj. EBITDA margins (Pre-IND-AS) stood at 10.2% (vs est: 8.4%). The beat was a function of trickledown effect of a depressed top line. However better than expected cost efficiencies helped reduce the operational beat. The company reported Adj. PAT at Rs 0.57 bn.

Elevated slippages and consequent provisions at IIB dented IIB's RoAAs over FY19 and will continue to do so over FY20E. However, we see these as transient and expect RoAAs to climb to 1.90/1.97% by FY21/22E (one of the best amongst its peers) even as we build elevated LLPs. Our constructive stance on the stock remains unchanged in spite of the stress that has played out so far, and draws on IIB's inherent strengths and asset quality improvement beyond FY20E. A smooth leadership transition will help with current asset quality issues. IIBs 3QFY20 net earnings were below estimates due to higher provisions while the banks operating performance was slightly ahead of estimates (led by higher NIMs and controlled opex). Loan growth (YoY) remained slow, and even as GNPAs inched up, PCR increased. Maintain BUY with a TP of Rs 1,990 (3.0x Dec-21E ABV of Rs 663).

JMC Projects (JMC) reported subdued numbers in Q3FY20, missing our expectations. Standalone revenue grew by 4% YoY to INR 929 cr, which was well below our expectations of INR 1,054 cr.

Lemon Tree Hotels Ltd.'s (LTH) Q3FY20 result was a mixed bag as net sales was muted owing to weak performance of new hotels, while cost saving aided healthy margins improvement. Net sales increased by 39.2% YoY to Rs 1,996 mn mainly driven by 4% increase in ADR. EBITDA came in at Rs 812 mn, up by 65.7% YoY and EBITDA margin stood at 40.7%, improved by 649 bps YoY. The company reported net profit of Rs 122 mn down by 2.2% YoY. The company's new acquired venture Keys Hotels performance...

SEL 3QFY20 performance was a disappointment as funding constraints limited execution of projects. With conclusion of InfInfravit deal funding issues will get resolved. Group standalone debt reduction by 50% will augur well for reinstating financial markets confidence in the group. Whilst it will take time for SEL to revert to historical levels of quarterly execution, we believe 3QFY21E onwards things should normalize. We maintain BUY. Key risks (1) Delay in new order inflows; and (2) Further delay in execution ramp-up. We maintain BUY on SEL with a reduced TP of Rs 175sh (vs. Rs 241/sh earlier). We value SELs EPC business at 15x FY21E EPS and assign a 20% hold co discount to SIPL stakes market cap. TP reduction is owing to FY20/21E EPS cut by 43/24%.

Sluggishness in its home state and a conscious effort to focus on less risky (low ticket LAP) and salaried home loans, and no major branch addition plans will curtail growth, in spite of REPCO's small base and healthy CRAR. Inexpensive valuations underpin our stance. Even the ascription of a measly 1.3x multiple, yields a considerable upside. REPCOs 3Q was in line with estimates as growth slowed (9%) and NIMs expanded (+30bps QoQ). Asset quality was stable QoQ. Maintain BUY with a TP of Rs 422 (1.3x Dec-21E ABV).

JMC delivered robust 9MFY20 standalone Rev/APAT growth of 19.8/21.4% driven by 51% YoY growth in Infra segment. JMC is on track to deliver 15-20% growth in FY20. Slow order intake and weak real estate demand may impact B&F order book as clients will delay/defer projects. This shall cloud FY21E growth to sub 10%. Besides, Rs 900mn FY20 BOT loss funding/debt servicing is a dampener. Likely restructuring in two BOT assets during 4QFY20 or early 1QFY21 is a positive development and will reduce the equity infusion by the company towards loss funding and debt repayment by Rs 400mn/annum. Order book accretion of Rs 33.6bn YTDFY20E is muted, largely driven by B&F segment. We expect JMC to clock 13.1% revenue CAGR over FY19-21E. We will closely monitor the progress on BOT assets monetization and performance in 4QFY20. Key risks (1) Delay in monetization/resolution of BOT assets (2) Leverage. We maintain BUY on JMC, with a TP of Rs 162/sh (vs Rs 175/sh earlier). During 3QFY20 JMC delivered Rev/EBIDTA/APAT miss of 6/2/5% vs our estimates. We continue to value EPC business at 15x Mar-21 EPS. We have reduced our EPS estimates for FY20E/21E by 3.5/8% respectively.

AP orders removal improves visibility on net executable order book and we believe this is already reflected in the price. AP NWC recovery of Rs 8.3bn is the key overhang now. NCC has resumed orders bidding and is likely to surprise positively on new order inflows for FY21E. TAQA out of court settlement may result in Rs 1bn hit for NCC. Sembcorp arbitration hearing is expected to conclude by Mar-20 with final judgment by Sep-20. We have cut FY20/21E EPS by 8.9/5.0%. Maintain BUY with reduced TP of Rs 106/sh. Key risks (1) Adverse ruling on ongoing arbitrations; (2) Slow down in government capex; (3) Deterioration in NWC days; and (4) Weak real estate monetization. NCC reported inline 3QFY20 financial performance, Rev/EBIDTA/APAT beat of 11.4/11.5/0%. With removal of Rs 71bn of slow moving AP orders net executable order book stands at Rs 250bn. We maintain BUY with reduced TP of Rs 106/Sh (EPC business at 15x FY21E EPS) vs. Rs 111/sh earlier.

Credit growth sustains; Corp NPA reduction led by write-offs BUY IndusInd Bank (IIB) reported its 3QFY20 results with the key takeaways being: (1) Headline NPA situation remains stable; exposure to 3 stressed groups down to 0.47% (2) Loan growth was largely in line with expectations; NIMs expand further (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L; items, IIB delivered NII growth of 34% YoY at Rs 30,742mn, PPOP growth of 30% YoY at Rs 27,577mn and PAT growth of 33% YoY at Rs13,092mn, respectively. We have revised our estimates for FY20/FY21/FY22 and retained Buy rating on IIB, revising our target price to...

IndusInd's credit growth continues to decline to 20% vs 21% on sequential basis and reported higher slippages from corporate portfolio (up 76% QoQ). Deposits growth remains strong at 23% YoY. NII grew by 34% YoY with a 19% YoY growth in its core fee income. Consolidated PAT grew by 19% YoY; while adjusted for accelerated provisions PAT grew by 52% YoY. GNPA remain stable at 2.18% vs 2.19%; however NNPA declined to 1.05% vs 1.12% due to accelerated provisioning. Bank's aggregate exposure net of provisions to Zee/ADAG/DHFL declined to 0.47% vs 1.1% (QoQ) of loan book. We largely maintain our estimates for FY21. We retain our BUY rating with a TP of Rs.1,720 (Rs1,575 earlier) valuing the stock at 3.0x vs. 2.75x earlier (18%...

Q3FY20 GDP: Growth to recover in FY21. IIB: Leadership overhang recedes

As per a press release on the exchanges, IndusInd Bank (IIB) has received RBI approval to appoint Sumant Kathpalia as MD & CEO for three years beginning 24 March.

Credit growth was at ~20% YoY (5.2% QoQ) to | 2.07 lakh crore led by higher growth in corporate book (6.2% QoQ) compared to consumer book (4.4% QoQ). Slower growth within the consumer book is attributable to auto slowdown. Deposit growth continued to remain healthy at ~23% YoY to | 2.17 lakh crore led by healthy traction of 12% QoQ in savings deposits....

Repco Home Finance (RHFL) has reported its 3QFY20 results with the key pointers being: (1) Overall loan book grew 9% YoY, 3% QoQ at Rs116bn. Shift towards salaried segment continued (2) Asset quality broadly stable with gross stage 3 assets at 4.2% (flat QoQ, +30 bps YoY) (3) NIM improved 10bps YoY, 30 bps QoQ at 4.6% (See detailed conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, RHFL posted NII growth of 14% YoY at Rs1,318mn, PPOP growth of 12% YoY at Rs1,048mn and PAT growth of 25% YoY at Rs697mn. We have revised our estimates for FY20/FY21/FY22 and retained Buy rating on RHFL,...

10 February 2020 PAT increased 25% YoY to INR697m (2% beat) in 3QFY20. While NII was largely in line with our estimate, higher opex (7% miss) was offset by lower provisioning (11% beat), leading to largely in-line PAT. Reported spreads improved 20bp QoQ/YoY to 3.3%, while the GNPL ratio was sequentially stable at 4.2%. Buy with a target price of INR390. Disbursements were down 11% YoY at INR6.6b due to a similar decline in both home loan and LAP disbursements. ~56% of the book (+6% YoY). Loan growth in Maharashtra (third largest state) also slowed down from 23% YoY in 2QFY20 to 17% YoY in 3QFY20. Reported spreads improved 20bp QoQ/YoY to 3.3%, driven by better yield and stable cost of funds. PCR increased by 100bp QoQ to 29%. While issues of sand mining and property registration in TN have been resolved, overall housing demand remains weak.

Our estimates remain largely unchanged, even after DCBB's soft performance over 3QFY20. We model a considerable improvement in credit growth and operating efficiency beyond FY20E. These reflect our confidence in the bank's calibrated approach to growth. We expect oplev to be the biggest driver of return ratio improvement. DCBB stands to gain from an uptick in economic activity and a sustained downturn will pose a significant risk to our estimates. DCBB reported an in-line qtr and overall performance was lackluster (asset quality deterioration and slowing growth). Better cost control and a slight margin uptick were positives. MAINTAIN BUY with a TP of Rs 249.

Tata Chemicals' (TTCH) 3QFY20 consolidated results were reported for the continuing operations - i.e excluding the consumer business being demerged in favour of TGBL post the NCLT's approval for this transfer. We are maintaining our earnings model and valuations including the consumer business - pending the official transfer. We maintain BUY on our revised SOTP-based TP of 897 - post changes in our estimates that imply ex-consumer valuation of Rs462. The results (on ex-consumer basis) were a tad below expectation. Revenue was up 2% at Rs26.2bn the 40% growth in specialty (read Rallis) offset the 6% fall in basic chemistry segment. EBITDA margin came in 190 bps below expectations, with a 9% miss at EBIT level. The EBIT growth was driven by CPC subsidiary Rallis under specialty segment. The interest expense...

NCC Ltd (NJCC) has reported a weak performance in 3QFY20 owing to muted revenue booking led by project cancellation and absence of convincing pick-up in construction activities post monsoon. Reported revenue declined by 34% YoY to Rs21.2bn vs. our estimate of Rs24.5bn, while EBITDA witnessed a de-growth of 36% YoY to Rs2.5bn. EBITDA margin contracted by 36bps YoY and 165bps QoQ to 11.8%. Adjusted profit declined by a sharp 66% YoY (10% QoQ) to Rs543mn mainly led by soft execution. Notably, NJCC has set aside slow-moving and likelyto-be-cancelled projects worth Rs71.3bn from its order backlog in order to have a clear visibility of revenue booking from the ongoing projects. Therefore, its current order backlog stands at Rs250.5bn, which is 2.7x TTM revenue and still gives decent revenue visibility. Going forward,...

Management have reduced its revenue guidance to Rs90bn (from earlier guidance of Rs100bn), with EBITDAM in the range of 11-12% NCC is one of the largest and well-diversified construction companies in India having expertise and experience in every segment of construction sector....

PNB Housing Finance (PNBHF) reported 3QFY20 results with the key pointers being: (1) Asset quality deteriorated with Stage 3 assets ratio at 1.75% (+128bps YoY, +91bps QoQ) (2) Capital raise expected in Q4FY20; Clarity regarding PNB's status and shareholding (3) Loan book declined 7% YoY and 2% QoQ at Rs692bn; AUM was up 8% YoY, down 4% QoQ (4) NIM declined 8bps YoY, 21bps owing to 3 bps decline in yield and flat cost of borrowing (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, PNBHF posted 3% YoY NII growth at Rs5,721mn, PPOP growth of 6% YoY at Rs4,777mn and PAT decline of 12% YoY at Rs3,421mn. We have revised our estimates for FY20/FY21/FY22...