* Reliance Infrastructure (R‐In fra) in its recent quarterly conference calls highlighted that their focus going forward would be towards, (1) Power, (2) EPC and (3) Defense sectors. R‐Infra has created a 100% subsidiary, Reliance Defense (RDL) to take on Defense opportunities emerging in domestic markets. As part of this strategy, R‐Infra recently completed the 51% stake acquisition of P
Performance in line with estimates
* Revenue reported at Rs 19.9 bn (+14%/+8%/4.3% YoY/QoQ) in line with our estimate backed by better realization in aluminium segment at Rs 140864/tn (+22%/+7% YoY/QoQ). Aluminium volume also remain favorable at 99 kt (+2%/+0.4% YoY/QoQ).
* EBITDA stood at Rs 2.85 bn (+101.5%/66% YoY/QoQ) supported by positiv
Execution picks up
* Sadbhav Engineering (SADE) reported in line revenue and EBITDA driven by execution pickup in the road EPC segment during the quarter.
* For 9MFY17, HAM projects continued only Rs47mn to revenue. However, from Q4FY17 execution in three HAM Projects out of four is expected
Weak execution persists
* Simplex Infrastructure Limited (SIL) reported 2% YoY revenue decline which was in line with our estimates. SIL’s EBITDA grew marginally by 3.8% YoY, however below our estimates on the back of lower margin. PAT was down 35.5% YoY on the back of lower OPM and hig
Long term growth story remains intact...
Impacted by demonetisation, Castrol India Ltd (CIL) reported muted numbers for Q4CY16, though they were slightly better than what we had anticipated. Net revenue de-grew by 1.1% YoY, while PAT growth stood at 10.7% (helped largely by higher other income). Led by lower material cost and moderation in ad spends, E
* Revenues were marginally lower than our estimate but was a mixed bag with strong YoY volume growth of 10% offset by realization decline of 14%.
* Higher EBITDA margin of 19.6% vs. estimated 18% on account of higher double stacking and lower empty running charges led to E
On a colorful growth trajectory
Akzo Nobel India Ltd (Akzo) is one of the leading paint manufacturers in India under the brand name ‘Dulux’. Akzo has ~11% share by revenue among the top 5 players. It manufactures and markets a wide range of coatings (contributes ~90%) and specialty chemicals & others (~10%). Akzo has six manufacturing f
Positives priced in
* KNR Constructions (KNRC) reported 74.9% YoY revenue growth; 23.6% YoY EBITDA growth and 21.9% YoY PAT growth, all of which were in line with our estimates.
* KNRC maintains guidance for double digit revenue growth in FY17E and FY18E. Tax rate guidance of 10-11%
Telenor India finds a suitor in Bharti Airtel
(1 NOK=~Rs. 8)
Indian telecom industry is heading towards becoming a 3‐4 player market as Telenor eventually finds a suitor in Bharti Airtel to acquire its assets. Telenor has been in lookout to form an alliance with Tata Tele earlier (minority partner) and Vodafone India in the past, none of wh
Steps in right direction to drive volumes; Retain ACCUMULATE
* Weak quarter led by sharp volume decline - Revenue at Rs8.6bn, down 11.5% yoy, EBITDA margin up 20bps yoy to 15.7% and APAT down 8.3% yoy to Rs1.4bn
* HFD volumes declined by 17% yoy impacted by low consumption offtake and wholesale channel destocking. Underlying value declined by
Shree Pushkar Chemicals & Fertilizers (SPCF) reported strong ~53%/21% YoY growth in Q3FY17 revenue/PAT driven by healthy volume growth in dyes and fertilizer segment. Additional dyestuff capacity of 3000 MTPA is expected to be commissioned by Q4FY17. We expect SPCF to consolidate its position in domestic dyestuff manufacturing industry with integration of dyestuff business with dye intermed
Demonetization plays the spoil sport
* Revenues were in-line with estimates while higher than expected opex led to EBITDA miss of 4%. Focus remained on improving yields (+8% yoy) while volumes (-8.5% yoy) were impacted by demonetization and yield improvement strategy
* Radio business was hard hit by demonetization, the trend is likely to reve
VRL had reported strong set of numbers amidst demonetization in Q3FY17 and the management expects the healthy performance to continue in coming quarter as well. This would be on the back of 1) Government initiatives to improve road infrastructure; 2) Impending GST bill and Motor vehicle Act; 3) Effective management of fuel cost; 4) Effe
Results impacted by one-off event; Maintain BUY
* Revenues at Rs 600mn (-19% yoy) was negative surprise as revenue contribution from the single largest product (contributed 35% to sales in H1FY17) vanished due to higher inventory at the customer end.
* Absence of key product also affected overall EBIDTA margins which dropped to 32% from 52% i
Margins appear to have peaked out
Our meeting with HPCL’s top management reinforces our primary concern that marketing business performance has peaked, given (a) the apparent market share loss in petroleum sales to both OMC and private peers, and (2) higher competition coupled with the burden of discounts/fees on cashless transactions which impe
Healthy performance across segments
* Sugar revenues jumped 179% yoy to Rs3.8bn primarily due to higher sales volumes and better realizations. Sugar EBIT improved 41% qoq to Rs 879mn (vs loss in Q3FY16) on account of better margins owing to firm prices and lower cost of production
* Chemical revenues at Rs3.8bn (+14% yoy) were driven by highe
Results beat estimates
* Overall revenue grew 2.5% to INR6.4b (est. of INR5.7b) in 3QFY17 from INR6.25b in the corresponding period last year.
* EBITDA margin contracted 70bp from 12.5% in 3QFY16 to 11.8% in 3QFY17 (est. of 9.5%). EBITDA declined 3% YoY to INR757m (est. of INR540m).
* Other income came in at INR190m, higher than ou
Annuity assets provide the cushion
* PEPL reported higher than expected revenue and earnings owing to many projects hitting the percentage completion threshold during the quarter. EBITDA margins remained weak as PEPL continues to incur cost overruns on projects being handed over for possessi
Attractive entry point
* The Phoenix Mills (PHNX) reported revenue of Rs43.7bn that was 10% lower than our estimate of Rs48.5bn owing to lower revenue recognition from development portfolio. However, higher share of rental income led to inline EBITDA of Rs2.1bn.
* Consumption grew 1
Demonetisation, slower execution hurt Q3 – HOLD
VOLT’s Q3 revenues (-7% YoY to Rs 11.8bn) were hit by demonetisation and slower execution in the projects business, even as EBITDA margins expanded 309bps YoY (9M: +241bps) off a low base. Management remains cautious on the pace of execution in the Middle East but expects closure of legacy pro
Foundry losses roil performance
* Dynamatic Technologies (DYTC) operational performance was below our expectations. Revenues declined by 4% YoY. EBIDTAM increased by 60bps YoY while APAT declined by 52% YoY.
* While the hydraulics and aerospace segments reported steady revenue and profitability growth, the automotive segment was impacted by l
Muted Q3; near-term outlook modest – HOLD
PI reported a below-expected Q3 with a 5% YoY drop in sales (RCMLe +8% YoY) and flat EBITDA YoY. Management stated that the global agrochemicals market is yet to pick up meaningfully, and thus the near-term outlook remains moderate. We expect a tepid 12%/18% sales/PAT CAGR for PI over FY16-FY19E due to a
Recovery at a distant far, downgrade to SELL
* Prism Cement’s Q3 result was largely in-line with our estimates on operating parameters with EBITDA at Rs251mn against our estimate of Rs266mn and OPM at 2% (vs an estimated 2%). TBK segment’s revenue was at Rs4.4bn against an estimated Rs5bn.
* Higher opex/tn (up 2.1% YoY due to incr
Results in line; PAT up ~20% YoY; other business post strong growth
* Reported PAT grew ~20% YoY/~3% QoQ to INR19.3b on strong capitalization in the preceding four quarters and robust growth at other businesses.
* Telecom business EBIT grew 42% YoY/12% QoQ to INR768m. Revenue increased 27% YoY/1% QoQ to INR1,444m.
* Consultancy busi
* Revenue stood at Rs 204 bn (+30%/+22% YoY/QoQ). Higher volume in zinc as per mine plan, increased volumes in iron ore post monsoon and ramp up in aluminium and power business, along with favorable metal and oil prices has led to better performance
*EBITDA came at Rs 59 bn (+82%/+26% YoY/QoQ). Majority of the improvement