We recently met the management of DCB Bank (DCB) and key takeaways are: (1) Despite intense competition, focus remains on maintaining healthy asset quality. (2) The bank intends to double its balance sheet in the next 3.5 years driven by growth in small-ticket loans. (3) Productivity improvement from newly-added branches would bring down the C/I ratio. (4) DCB is offering SA interest rates of 6
Upgrade to ACCUMULATE on better project execution visibility
* Q1FY18 PAT came in at Rs8.6bn, which was broadly in line with our expectation of Rs8.4bn. Generation increased 13.0% yoy to 8.55bn units while realization was down 5.6% yoy to Rs3.1/unit. Revenue increased 6.7% yoy to Rs23.3bn.
* NHPC didn’t commission any fresh capacity dur
* Q1FY2018 operating performance in line with estimates, excluding one-off expenses:
TVS Motors’ (TVSM) Q1FY2018 results were impacted by one-off expenses. The topline for the quarter at Rs.3,399.5 crore increased by robust 18% YoY (broadly in line) on account of strong 11.7% YoY volume grow
Strong operating performance; pricing power improving
Valuations are compelling; Reiterating Buy
1QFY18 adj. EBITDA grew 98% YoY (+13% QoQ) to INR16.2b, exceeding estimate by 7%, due to higher regional and mix premiums. EBITDA is adjusted for (a) rail line doubling payment of INR411m and (b) expected credit loss of INR815m, w
On a steady growth path
Talwalkars Better Value Fitness Ltd. (TBVFL) reported inline numbers for Q1FY18 with a net revenue and PAT growth of 12.9% & 28.9% YoY. Led by cost efficiencies, EBITDA margins expanded 200bps YoY to 50.2%, which was encouraging. We remain positive on TBVFL's medium to long term growth prospects given the bright prospect
Beat led by volume growth and margin expansion
* Revenue increased 9% YoY (-6% QoQ) to INR14.5b in 1QFY18, ahead of our estimate of INR13.8b, led by strong volume growth. EBITDA of INR3.3b (+25% YoY, -34% QoQ) too exceeded our est. of INR2.6b, boosted by (i) strong volume growth (market share gains), (ii) Margin expansion (higher double-stacking and lo
Multiplication of 360 degree by applying square of 9 from the significant high of Rs212 is placed around Rs158. The same coincides with 61.8% retracement mark of the entire move from Rs125 to Rs212. So, base building pattern was seen around the point of confluence (between Rs155-158). In previous week’s trade, ONGC attempted to breakout from the base building pattern, suggesting a medium-
* Revenue stood flat; high input prices and lower operating leverage affected OPM:
GlaxoSmithkline Consumer Healthcare’s (GSK Consumer) revenue declined marginally by 1.3% YoY to Rs.1,045.9 crore in Q1FY2018 on account of canteen stores department (CSD) consumption loss and reduction i
The tunnel just got over
Two states ready to sign PPAs; Full visibility for FY18 volumes
* Reiterate BUY with Rs26 TP. Catalysts from PPA agreements in Andhra Pradesh and Karnataka.
* SUEL stock declined 20% from its May peak levels as investors were worried that the company would fall s
Cera Sanitaryware’s (CRS) 1QFY18 sales were in line with EE (+10% yoy), but EBITDA fell 16% short of EE (-10% yoy) with EBITDA margins coming in at 14.1%, 316bps lower yoy due to higher outsourcing and employee costs. Sanitary-ware/faucet-ware/tiles contributed 58%/21%/19% of 1QFY18 revenues. Demand was hit by GST-led destocking by trade channels in Jun’17. We pare our FY18/FY19 sal
Be st-of-breed earnings growth visibility commands premium multiples
* BRIT’s consolidated sales grew 6% YoY (est. of +4%) in 1QFY18. Standalone (S/A) sales increased 6.6% YoY, but subsidiary sales were down 5.9% YoY. We expect base business volume growth to have come in at ~2%, as against our estimate of flat volumes. Thi
* In-line operating profit; Dahej utilisation robust at 96% despite a decline in India’s LNG imports:
Petronet LNG (PLNG) reported operating profit of Rs.744 crore (+15.8% YoY; +20.7% QoQ) for Q1FY2018, in line with our estimate of Rs.750 crore. Strong growth was driven by a sharp incr
Better realization helps restrict loss
* Revenue stood at Rs130bn (+26% yoy/-9% qoq), which was better than our estimate, backed by better realization. Realization came in at Rs38,242/tonne (+15% yoy/+3.8% qoq) while sales volume was in line with estimate at 3.03mt (+9% yoy/-12% qoq).
* EBITDA stood at (-)Rs839mn [vs Rs2,338mn in
India’s shrimp industry is still at a nascent stage and has large, untapped potential. India is also a major exporter of shrimps to the US, with its share in US shrimp imports more-than-doubling from ~13% in 2011 to ~31% at 2016. With growing global demand for Indian shrimps, we think large, integrated players such as Apex Frozen Foods (APEX) are on a strong footing. The company’s n
Domestic Formulation Biz to Sustain Growth Trajectory
Torrent Pharmaceuticals (TRP) is focused on developing complex generic drugs with presence across India, Brazil, US and Emerging Markets. It has a strong presence in high-margin and cash flow sticky chronic segment, which account for ~75% of its total domestic sales. Looking ahead, we expect TRP&rs
Better performance amidst challenges; Maintain HOLD
* Grasim Industries’ Q1FY18 result is above our estimate, with EBITDA at Rs5.6bn coming in ahead of our estimate of Rs5.2bn and OPM of 20.3% against our estimate of 19.7%. EBITDA/kg in VSF stood at Rs28.8 against the estimate of Rs27/kg.
* VSF realization was up 11.5% yoy due to a
Growing from Strength to Strength
Market leadership in tiles, accelerated macro initiatives, implementation of GST, improved operating leverage and strong new product funnel would be the key growth drivers for Kajaria Ceramics, going forward. We expect the Company to post 13.9% revenue and 19.3% earnings CAGR through FY17-19E. We initiate coverage on t
Minda Industries (MNDA) delivered yet another strong quarter with 25% yoy consolidated sales growth in 1QFY18; of this, ~9% growth was driven by the Rinder India (Rinder) acquisition last year, and the rest by ramp-up at alloy wheel business and other subsidiaries. Management stated it would consolidate associate and group companies Mindarika and Ften in 2HFY18; hence, we have included these in
Realisation spike leads to EBITDA beat; Downgrade to ACCUMULATE
* Sanghi Industries (SNGI) Q1FY18 result is above our estimate, with EBITDA at Rs661mn against our estimate of Rs536mn and EBITDA/tonne at Rs993 against our estimate of Rs850, led by a steep 37.3% qoq increase in realization.
* Sales volume of cement was flat yoy, but clinker exp
In-line; RE margins stable; VECV significant positive surprise
EIM reported in-line 1QFY18 results. Consol. PAT rose 22% YoY to ~INR4.6b (est. of NR4.6b), led by healthy Royal Enfield (RE) performance and positive EBITDA margin at VECV.
* RE EBITDA margin at 31.4%: Net realization rose 2.9% YoY (+2.8% QoQ) to ~INR108.7k (est.
* Impressive margin performance, beats estimates:
Insecticides India reported robust earnings growth for Q1FY2018, strongly beating our estimates on the margin front. Topline for the quarter at Rs.312 crore increased by 14% YoY, led by well-progressing monsoon, which resulted in good demand for in
Subsidiaries led the beat in EBITDA
Margin outlook positive; upgrading estimates and TP
JSW Steel’s (JSTL) 1QFY18 cons. EBITDA declined 17% QoQ to INR26.2b (8% beat) due to seasonal decline in volumes and lower steel prices. Standalone EBITDA at INR22b was in-line, while the positive surprise came from subsidiaries.
Margins soften, but not yet dismal
* Cummins India’s (KKC) Q1FY18 operational performance was better than our expectations. While the revenue increased by 7% yoy, EBITDA margin declined by 183bps to 14.6% yoy and APAT remained flattish.
* Lower exports and adverse product mix impacted EBITDA margin. While domestic sales grew by 10% yoy,
Shrinking global ship building order book, bottoming asset prices, stable crude prices and stable shipping freight rates bodes well for shipping cum offshore companies including GESCO. From the above, we can infer that the freight rates to improve in the shipping segment and day-rates to improve in the offshore segment which should result in improvement in EBIDTA margin and return ratios for GE
We recently met WPRO‟s IR head in Bengaluru and were enthused by the commentary. Gradual recovery is on track driven by company specific factors at play and could help achieve 4Q-CC exit rate in-line with industry average. Although FY18E growth could lag peers, FY19E could be different. Services margins too are tracking well (excl. two-month wage hike impact), and FY18E CC margins could be si