Buy Berger Paints India Ltd For Target Rs.245.00 - Emkay

Steady performance amid challenges; Retain Hold

* Inline performance - Consolidated revenue at Rs11.1bn, up 8.2% yoy; EBITDA up 3.5% yoy to Rs 1.6bn; EBITDA margin at 13.8% (-70bps yoy); APAT at Rs1.1bn, +16% yoy

* Decorative volume growth at ~11%. Have gained marginal market share (0.1-0.2%) in FY17. General and Automotive business reported

3/07/2017 2:41:22 PM | Posted in Broking Firm Views - Long Term Report read full news
Update On Prabhat Dairy Ltd - Motilal Oswal

Solid institutional player

Moving toward consumer business

Incorporated in 1998 by the Nirmal family, Prabhat Dairy (Prabhat) is a fully integrated milk & dairy products company engaged in the sale of products to institutional and retail customers. The company sells specialty and comanufactured products to its institutio

3/07/2017 2:34:05 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Thermax Ltd For Target Rs.795.00 - Emkay

Recovery getting delayed

* Thermax (TMX) Q4FY17 operational performance was in-line with our expectations. While revenues reported flattish growth, EBIDTAM increased by 280bps YoY to 11.6%. APAT (before share of losses in JV) increased by 2% YoY.

* Order inflows declined by 23% YoY to Rs11.7bn while order backlog declined 15% YoY to Rs 40bn.

3/07/2017 2:27:08 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Persistent Systems Ltd For Target Rs.740.00 - Motilal Oswal

Headwinds to near-term profitability… …

but on track to revive margins

We discussed with Persistent Systems (PSYS) about its business prospects amid multiple headwinds to profitability. Key takeaways:

 

Three key headwinds to 1QFY18 profitability…

Three

3/07/2017 2:16:35 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Blue Dart Express Ltd For Target Rs.5,150.00 - Kotak Sec

Weak business environment (esp. B2B segment), consultancy charges of Rs 350 mn paid to Mckinsey to develop a future strategy for BDE and increasing competition were the factors responsible for weak performance of BDE in FY17. However, improved outlook, a fresh strategy under the observation of Mckinsey, implementation of GST, and benign fuel cost are expected to keep the growth momentum healthy

3/07/2017 2:08:27 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Tata Steel Ltd For Target Rs.451.00 - Motilal Oswal

Selling Tata Motors’ shares will boost equity value by INR31/share; stake in Tata Sons is worth at least INR135/share

* Tata Steel will be selling 83.64m shares in Tata Motors, a group company, to Tata Sons in a related party transaction at prevailing market price on or after 23 June 2017. This will unlock value of INR38b @INR455/share and help i

3/07/2017 1:45:31 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold EClerx Service Ltd For Target Rs.1,260.00 - Emkay

More clarity on FY18E outlook yet growth to be subdued

* While the US$ revenue growth at 1.5% QoQ was tad lower than our estimate, it marks a relief after 4 consecutive quarters of revenue decline. Revenues from Emerging clients grew strongly by ~17% QoQ (albeit after 2 quarters of muted performance).

* EBIT margins improved by 150bps QoQ ahe

3/07/2017 12:31:30 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Voltas Ltd For Target Rs.400.00 - Motilal Oswal

Room AC segment to feel the heat of GST in 1QFY18

Market shift toward inverter ACs to be gradual

We met management of Voltas (VOLT). Key takeaways:

GST to impact room AC growth led by dealer destocking/inventory liquidation

* Growth in the room air conditioning (AC) segment is expected to

1/07/2017 2:52:25 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Sadbhav Engineering Ltd For Target Rs.378.00 - Emkay

Execution picks up

Result highlights

* Sadbhav Engineering (SADE) reported in-line revenue of Rs10.3bn (up 20% YoY) and EBITDA of Rs1.1bn (up 35% YoY). The execution pickup was driven by the roads segment which contributed 80% of the revenues of which 82% was from EPC projects.

* For FY17, HAM proje

1/07/2017 2:33:54 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Arvind Ltd For Target Rs.362.00 - Motilal Oswal

G ST to have a transitional impact

Continued pressure on margins

Brands & Retail: Higher tax under GST to drive price hikes

Price hikes on the cards: Arvind’s (ARVND) Brand & Retail segment currently attracts a tax rate of ~11% (5.5% VAT, 3.5%

1/07/2017 2:23:19 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Venkys India Ltd For Target Rs.2,150.00 - Kotak Sec

Venky's India suffered a five-year stagnation/ decline in earnings through FY11-FY15, as a result of weakness in gross margins (a result of a demandsupply mismatch in poultry) as well as significant capex (higher interest expenses) in the midst of the demand slowdown. Since FY15/16, measures taken by the industry to correct the supply-demand mismatch in poultry have begun to impact chicken

1/07/2017 2:14:41 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Axis Bank Ltd For Target Rs.570.00 - Sharekhan

The game changer

* Corporate facing banks were under significant pressure due to mounting non performing assets (NPAs) that was weighing down the balance sheets of banks. Recently, the government along with Reserve Bank of India (RBI) has taking several policy measures to address NPA issue. In the initial phase, the insolvency proceedings are initiate

1/07/2017 2:04:08 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Petronet LNG Ltd For Target Rs.546.00 - Motilal Oswal

For the long haul

Volume growth to continue for a long time

* Though PLNG witnessed 5.8% volume CAGR over FY12-17, its volumes grew 25% in FY17, aided by favorable LNG prices and Dahej expansion. To better capture sporadic increases in offtake, as PLNG expands its Dahej facility and ramps up Kochi utilization, we believe a 3

1/07/2017 1:58:37 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Chambal Fertilisers Ltd For Target Rs.139.00 - Emkay

Concludes divestment of all non-core assets; Upgrade to Buy

* Chambal has announced divestment of the 3 remaining ships by Sept’17. Each of the ships will be sold for ~US$21.5mn (~Rs1400mn). With this, the company would have completely exited from all non-core business

* Q4FY17 revenues from continued operations (excluding shipping) dro

1/07/2017 1:51:46 PM | Posted in Broking Firm Views - Long Term Report read full news
Update On CCL Products Ltd - Equirus Sec

We reiterate our positive view on CCL Products (CCL) post our meeting with Mr. Rajendra Prasad, Executive Chairman of CCL Products. Management of CCL remains very optimistic about the medium to long term growth prospects for the business. Initiatives taken by CCL during FY17 for Vietnam and Guntur plant and setting up freeze dried capacity in Chittoor indicates that focus remains on high margin

1/07/2017 1:39:07 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Cummins India Ltd For Target Rs.950.00 - Motilal Oswal

Domestic business witnessing strong demand revival

Competitive intensity remains fierce

We recently met multiple channel partners/dealers/OEMs of diesel genset manufacturers in India to understand the domestic demand scenario. Key takeaways from our meetings are as follows.

 

HHP witne

30/06/2017 2:23:55 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Parag Milk Foods Ltd For Target Rs.222.00 - Emkay

Revival of value added products portfolio holds key

* Revenue subdued but margins healthy – Revenue grew by 3.4% yoy to Rs4.3bn, EBITDA at Rs 518mn grew 29.7% yoy, APAT at Rs 328mn grew 104.4% yoy aided by tax refund

* Value added milk products (64% of sales) declined 10% yoy impacted by steep price hike (8%) taken in Jan’17. Focu

30/06/2017 2:15:10 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Jubilant FoodWorks Ltd For Target Rs.880.00 - Emkay

Complete overhaul in strategy; focus shifts to profitability

* Dismal quarter – Revenue at Rs 6.1bn, down 0.9% yoy; EBITDA at Rs605mn, down 15.2% yoy; APAT at Rs189mn, down 32.2% yoy

* SSG at -7.5%, impacted by demonetization (in months of Jan & Feb) and withdrawal of discounting. Complete overhaul in the strategy where focus shifts

30/06/2017 2:07:52 PM | Posted in Broking Firm Views - Long Term Report read full news
Update On Bharat Financial Inclusion Ltd - Credit Suisse

* We recently visited BHAFIN's operations in the Vidarbha region in Central India—one of the worst affected regions on collections post demonetisation. Our takeaway is that the peak of collections pain is behind us, with numbers improving WoW.

* We also conclude that news flow on loan waivers should have negligible/nil impact on the business. From our discussions, the borrow

30/06/2017 1:59:52 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Kewal Kiran Clothing Ltd For Target Rs.1,910.00 - Sharekhan

Key points

* Fallout of GST would result in weak Q1FY2018 and muted FY2018:

Our recent interaction with the top management of Kewal Kiran Clothing (KKCL) gives us an indication that Q1FY2018 will be weak with lower volume and realisation growth due to de-stocking at dealers level prior to implementation of GS

30/06/2017 1:48:08 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Bharti Infratel Ltd For Target Rs.440.00 - Motilal Oswal

Healthy tenancy outlook to support growth

Vodafone-Idea merger could dilute EBITDA by 15%

* Accelerated data network expansion by Bharti and RJio should keep gross tenancy additions healthy. Net additions might be moderated by the potential loss of tenancies from Aircel and TTSL.

* As cell density grows in urban are

30/06/2017 12:24:59 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Bharat Heavy Electricals Ltd For Target Rs.106.00 - Emkay

Lackluster performance

* BHEL’s Q4FY17 operational performance was below our estimates. Revenues declined by 3% YoY. EBITDA declined by 200bps and APAT declined by 57%

* Q4FY17 order inflow increased by 6% YoY to Rs167bn while FY17 order inflow declined by 46% YoY to Rs235bn. While order backlog declined by 5% YoY to Rs1tn, the executab

30/06/2017 12:11:59 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Tata Chemicals Ltd For Target Rs.636.00 - Emkay

Subdued operating performance; Revise rating to Hold

* Consolidated revenues (including discontinued operations) fell 13% yoy to Rs35bn and was below our estimate of Rs 41bn. EBITDA at Rs5.7 was also below our estimate of Rs6.4bn mainly on account of lower EBIT in chemical segment (-14% yoy to Rs3.7bn)

* Fertiliser EBIT stood at Rs244mn compa

30/06/2017 11:39:15 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Manpasand Beverages Ltd For Target Rs.900.00 - Motilal Oswal

Tie-ups to expand distribution network; growth intact

* Revenue, EBITDA and PAT below estimates: Overall revenue grew 28.6% to INR2,672m (est. of INR3,272m) in 4QFY17 from INR2,078m in 4QFY16. The topline had an impact of INR400mn on account of INDAS adjustment. EBITDA margin shrunk 120bp from 20.6% in 4QFY16 to 19.4% (est. of 18.5%)

29/06/2017 2:04:29 PM | Posted in Broking Firm Views - Long Term Report read full news
Accumulate Heritage Foods Ltd For Target Rs.1,160.00 - Emkay

Revival in dairy volumes remains key; Downgrade to Accumulate

* Revenue steady but margins subdued – Revenue grew by 10.7% yoy to Rs7.0bn aided by retail segment, EBITDA at Rs339mn (-10.4% yoy) and PAT at Rs147mn (-18.6% yoy)

* Dairy segment grew at 6.1% yoy aided by healthy growth in value added products (grew 10.4% yoy). Acquisition o

29/06/2017 1:59:16 PM | Posted in Broking Firm Views - Long Term Report read full news