We believe that despite a 132.2% appreciation in the stock price of Uflex Ltd (Uflex) since our IC, dated 5th April, 2016, (link) the growth story is far from over. We estimate that revenues will grow at a 12.4% CAGR to Rs 9,234.6 crore by FY20. The EBITDA and PAT are expected to grow at a CAGR of 16.1% to Rs 1,352.3 crore & 20.3% to Rs 611 crore, respectively, over the same period. The pri
US FDA lifts 99-32 clause – a sentiment positive
But import alert under another clause remains
* Divi's Laboratories (DIVI) has been informed by the US FDA that it will lift the import alert under clause 99-32 on the company's Unit-II at Visakhapatnam. The US FDA had issued an import alert under clauses 99-32 a
We recently met the management of ion Exchange (IEL). IEL has a strong position in the water treatment market in India having set up projects for prestigious clients in India and abroad. The company has recently won a large order from Sri Lanka which has boosted its order book.
In view of the strong order book, the profit outlook for the company has improved. Given the rising focus on
Creating a large financial conglomerate
Swap ratio – A key for SHTF and SCUF shareholders
IDFC Bank and Shriram Group have announced their intent to explore a merger during the course of a 90 day exclusivity arrangement. During this period the boards of both companies will apply for regulatory approvals. The merger wi
We met Tech IR in Pune and were surprised by the unusual silence on the campus vs. the usual activity observed in our earlier visits. Though it likely emphasizes EBITDA margin focus driven through cost optimization and automation initiatives, revenue traction could be a concern. We are trimming our 1QFY18 estimate which flows through FY18E. This along with PE multiple cut leads to a cut in our
Mayur Uniquoters published its 24th Annual report for FY17 yesterday. The management remains positive about the long-term story of synthetic leather industry. Rising disposable income, changing lifestyle and ban on slaughter of animals are some of the factors working in favour of synthetic leather. Though GST rates have no major impact on the business, management remains optimistic about the sh
* Improvement in rural demand coupled with new launches to aid volume growth; Hero to aggressively tap export markets:
2W industry volumes have revived in Q1FY2018 with industry exhibiting 8% volume growth as against a marginal drop in Q4FY2017. Positive rural sentiments on back of normal monsoon c
Just an expression of interest
Keen to acquire international operations of Air India, but won’t pursue if not EPS-accretive
In a conference call arranged by InterGlobe Aviation (INDIGO), the founders Mr Rahul Bhatia and Mr Rakesh Gangwal expressed their interest in buying out Air India and also discussed the company&rs
Exclusion of gas from GST adds to pain
Gas volumes down post GST
* With gas not being included under GST, it has become more uneconomical. Dirtier alternatives like coal and fuel oil have been included under GST.
* As a result, industrial offtake for Gujara
Some pricing pressure, but fundamentals are strong
Trading at 2.8x EV/EBITDA; Re-iterate BUY
Operations are strong, but book cleaning affected PAT in FY17
NMDC’s business is strongly supported by robust demand growth from its key customers (JSW, Essar, RINL, etc.), high qualit
We met the management of BEPL to understand the company's business and industry insight. The company is a vertically integrated petrochemical company in the field of Acrylonitrile Butadiene Styrene (ABS) manufacturing in India. The current installed capacity stands at 80,000 tonnes, spread across two manufacturing facilities in Abu Road, Rajasthan and Satnoor, Madhya Pradesh. ABS acts as a
Weak container shipping market, realignment of services by container majors which lead to market share loss for GPPL and appreciating rupee impacted the performance of the company in FY17. However, improving container volumes on the west coast, potential from the project cargo division, diversification to crude and car segment should yield results for the company over FY17 to FY19E. With the hi
Energy Efficiency Services Limited (EESL) order tracker
Air conditioner ordering takes the center stage
* Ordering dominated by air conditioners:
EESL placed orders worth INR7.1b in April-May 2017, as against INR5.2b in the year-ago period, an increase of 37% YoY. Ordering was dom
Positive start to FY18
Key highlights of Q1FY18 operational performance
* Sobha clocked Q1FY18 sales volume of 0.82msf (up 13% QoQ) worth Rs5.7bn (up 12% QoQ in value terms) owing to higher volumes from NCR (Gurugram) and a 17% QoQ volume uptick in Bengaluru.
* While management has refrained from giv
Recent NITI AAYOG document hints of support to gas based plants and this could help the revival of ~1.6 GW UNOSUGEN and DGEN. Focus on renewable expansions and distribution capex due to the GERC's thrust on RPO and Distribution will lead to reduction in Stranded Gas based plants/Net Fixed Assets from 37% in FY17A to ~29% by FY20E. Based on SOTP valuation, we obtain a base case Mar’18
Marred by interim challenges but long term outlook strong; Upgrade to Hold
We met the management of Havells India Ltd to get latest update on its business and strategy for the foreseeable future.
* Second half of May and whole of June saw some destocking in trade across categories ahead of the GST implementation. Havells has started giving ex
Increased freebies add to the pain of subscription growth
* Increasing competitive intensity in the DTH space, with increased freebies, continued subscriber addition by Free Dish and down-trading are likely to dent Dish TV’s performance going forward, as subscriber profile for the company is weak due to its rural focus.
* We see a parti
Year of Movie buying
* FY17 annual report has focused on content positioning, delivery platform, viewer connect (focus on language expansion) and continued widening of international footprint with new channel/content launches. Movie satellite rights acquisition is expected to remain high in the near term. Fresh digital strategy is expected to be announ
Recovery to be gradual; Maintain HOLD
* Dabur was witnessing some revival in growth during April and May led by gradual recovery in demand and rural growth has been marginally ahead of urban growth. However, June month has been witnessing destocking by distributor on account of GST.
* Except for core Ayurvedic portfolio of Rs1.5-2bn where the
Recovery continues in 1QFY18
Remains insulated from GST impact
Titan Company (TTAN) has released its pre-quarterly update for 1QFY18. Key highlights:
Overall good growth across segments
* 1QFY18 was a good quarter for all retail formats, particularly jewelry.
Sunny day arrives, Initiate at BUY
A bet on PepsiCo India
* We initiate coverage of Varun Beverages (VBL) with a BUY rating and a price target of Rs674, implying 32% upside from here. VBL is the leading Indian soft drinks player and controls 45% of PepsiCo India’s volume through franchise model.
Multiple triggers in place to drive earnings
* Jubilant Life Sciences (JLS), part of Jubilant Bhartia Group, is an integrated pharmaceuticals and life sciences company engaged in the manufacture of radiopharmaceuticals, allergy products, generics, advance intermediates, nutritional products and life sci
Margins surprise positively
* Simplex Infrastructure’s (SINF) Q4FY17 revenues increased marginally by 3% YoY to Rs.15.5bn in line with our expectation. PAT beat our as well as street estimates on the back of strong EBITDA margins of 13.2% and a negative tax rate.
* Order infl
KEI Industries (KEI) is one of the leading wires and cables manufacturers in India with core strength in the cables business (LT, HT and EHV cables) and it is looking to capitalize on the rising demand in the house wires division. GOI’s aggressive approach to develop world class infrastructure is likely to offer significant opportunities for KEI and its peers. We expect revenue/EBIDTA/PAT
Realization under pressure on grade adjustment and mix
Cut estimates by 4%/10% for FY18/19; Attractive dividend yield; Buy
n The new coal distribution policy ‘SHATKI’ favors coal supply to the power sector at notified prices. This would lead to a decline in the share of e-auction volumes to 16% from 20% estimated