Sadbhav Infra’s (SIPL) consolidated operational performance was above estimates due to higher-than-expected standalone contribution. Non-cash finance costs led to a below-expected PAT of Rs 813mn, but overall quarterly generation was at Rs 625mn. With greater impact of refinancing and gradual growth in traffic, we expect cash profits to grow steadily over the next two quarters. We are pos
* Print Ad revenue was impacted by GST transition and sub-par government spends in Uttar Pradesh (UP). Circulation revenue was flat yoy, affected by price cuts in UP and Bihar due to competitive intensity. Digital revenue growth was healthy at 33% yoy.
* Mid-Day continued to register decent Ad revenue growth of 3.3% yoy in spite of tough business environment. Consolidated EBITDA was d
Breakeven at new stations to drive earnings
We recently hosted Music Broadcast’s (MBL) management at our ‘Mid-cap Conference’.
* Local advertisers – one of the key drivers of growth – continue to feel the heat of GST. Momentum in real estate and government ads too remains weak.
States to drive domestic T&D capex
Railways to provide strong business opportunity
We recently met management of KEC International at our ‘Midcap Conference’.
* Domestic T&D business is expected to be driven by state capex – we note that 65
* Idea Cellular reported weaker-than-expected operating performance but cost-control efforts restricted decline in EBITDA. Delayed response to competitive pricing led to subscriber loss in H1FY18.
* Both Idea and Vodafone have sold 20,000 towers to ATC for Rs79bn, implying Rs3.9mn EV/Tower. Lower transaction value could be attributable to absence of exit penalty for merging overlappin
Result highlights: Company’s revenues for Q2FY18 were sharply lower than our estimates due to GST implementation which had delayed the supplies of material. Also lack of clarity on GST exemption on government projects led to delay in billing and payments from clients. Company expects to recover the shortfall in revenues in the coming quarters. Margins were ahead of our estimates. Interest
GSFC reported ~6% YoY decline in net sales in Q2FY18 to INR 15403mn on account of one time urea subsidy loss (INR 920 mn) and ammonia plant shutdown in July which impacted chemical segment. Fertilizer segment reported increased trading activity whereas production volume declined YoY. Capro-Benzene spread at $1200/ton in November would help chemical segment in coming quarters. GSFC expects payme
Sadbhav Engineering (SADE) outperformed on execution and profitability fronts in 2QFY18, and saw moderation in WC and debt reduction during the quarter. SADE enjoys revenue visibility of 2.7x FY17 net sales after factoring in a total order book (incl. L1 orders) of Rs 95bn. Margins have improved along with working capital contraction, in line with our view. Going ahead, smooth HAM project execu
Cement division set for a better 2HFY18
TBK segment to see profitability improvement led by better product mix We recently hosted Prism Cement (PRSC) at our ‘Midcap Conference’.
* Cement demand for the company is likely to grow 5% YoY in 2HFY18, led by resolution of the sand mining issue in UP, a favorable base of 2HFY18 (was imp
* KPP (standalone) reported better than expected operational performance. Revenue increased by 10% yoy, EBITDAM declined by 10bps yoy and APAT increased by 24% yoy. While the T&D business grew by 4% yoy, pipeline and railways business grew by 24% yoy and 50% yoy respectively.
* Order inflow (standalone) declined by 46% yoy to Rs10.8bn. Order backlog (standalone) increased by 2% yo
Revenues of the company during the quarter were lower than our estimates due to lower revenue booking in residential real estate segment. Also, Chennai Market city ceased to be the subsidiary of the company and hence its numbers are not consolidated in Q2FY18 financials. Margins stood strong at 48% on improvement in rentals across market cities. Net profit performance was impacted by higher tax
We recently met the management team of Minda Corporation ltd. (Minda Corp) consisting of Mr. R. Laxman - Group President, Finance along with head of various departments. We also visited five manufacturing facilities at Pune namely Spark Minda Technical Centre, Security Division, Minda Stoneridge, Minda VAST and Minda Die casting plant. Following are the key takeaways.
STL reported strong all round performance in 2QFY18. Robust growth in automobile volumes across segments translated into 21% YoY revenue growth for the company. Operating leverage on strong revenue growth led to EBITDA margin expanding YoY from 20.1% to 23.2%. Strong operating performance led to 62% YoY jump in net profit. As compared to 1QFY18, the performance of the company was strong. We exp
* Techno Electric (TEEC)'s operational performance missed our and consensus expectations. Revenues declined by 31% yoy impacted by GST related disruptions. EBITDAM declined by 10 bps yoy and PAT declined by 15% yoy.
* Revenues in the EPC and Energy segments declined by 32% and 25% yoy respectively. EBITM in EPC segment contracted by 200bps yoy. Order inflow decreased by 75%
Eicher Motors’ (EIM) Q2FY18 performance marginally missed our estimates, wherein revenue growth was at 23.5% YoY to Rs21.7bn (PLe: Rs22.1bn), and the EBITDA margin came in at 31.5% (PLe: 31.9%). With higher share of profit from its joint venture, consolidated net profit for the company grew ~25% YoY to Rs5.18bn (marginally below PLe). Eicher’s standalone performance was decent with
Volume triggers playing out
Reiterate Buy; increased competition remains a key risk
We hosted MCX at our recent Midcap Conference. In our discussions, we covered a range of topics such as volumes on the exchange, potential triggers, and competitive threats. Some notable highlights:
* Post demonetiza
Focus on circulation ramp-up to continue
We recently hosted DB Corp’s management at our ‘Midcap Conference’.
* Ad growth was impacted in October 2017 due to the shift in the festive season to the previous quarter. However, the ad growth outlook for November appears better due to a low base o
Videocon merger synergies to drive earnings * EBITDA comes in above estimates: Dish TV (DITV) delivered healthy EBITDA growth of 7% QoQ (-18% YoY) to INR2.2b in 2QFY18, 4% above our estimate. Revenue grew 1% QoQ to INR7.5b, supported by a 2% improvement in subscription revenue. EBITDA margin improved 160bp QoQ, led by lower SG&A costs, partly offset by higher transponder cost. *
Videocon merger synergies to drive earnings
* EBITDA comes in above estimates: Dish TV (DITV) delivered healthy EBITDA growth of 7% QoQ (-18% YoY) to INR2.2b in 2QFY18, 4% above our estimate. Revenue grew 1% QoQ to INR7.5b, supported by a 2% improvement in subscription revenue. EBITDA margin improved 160bp QoQ, led by
MoIL’s operating performance during the quarter was boosted by better realisation. Net sales during the quarter grew 46.3% YoY to Rs2.87bn (down 15.5% QoQ). EBITDA during the quarter grew multifold YoY to Rs1.17 bn, with an EBITDA margin of 40.6% (est. of 39%). PAT came in at Rs927 mn. The company has hiked prices in the month of October by 7.5%, which should be reflected from 3QFY18 onwa
AC portfolio overhaul likely post energy rating norm changes
Voltas-Beko product line to be launched in 2HCY18
We recently met management of Voltas (VOLT). Key takeaways:
* Room Aircon: New energy ratings to result in complete portfolio overhaul
* To comply with the new energy-efficiency
Indian bank reported higher NIMs at 2.85% (15bps y-o-y & 12bps q-o-q) led by higher C/D ratio and improvement in spreads. PPOP grew by 37% y-o-y (10% q-o-q) largely due to controlled opex (3% y-o-y & q-o-q) and higher other income (22% y-o-y & 10% q-o-q). GNPA remained flat q-o-q to 96.2bn (6.7% vs. 7.2% in Q1 FY18) and higher provision (9% q-o-q) resulted in improvement in PCR to 6
* Net revenues increased by 11% yoy to Rs3.5bn marginally above our estimate of Rs3.3bn. Gross margins contracted 140 bps yoy to 41% and were in line with estimates as the company was unable to take excise duty benefit on inventory lying for more than one year.
* EBITDA margin at 21.5% contracted by 80bps yoy and were tad lower than our estimates of 22%. EBITDA stood at Rs750mn
Volumes up 26% YoY at 605k units (est. of 590k)
* HMCL’s November-17 volumes of 605,270 units (+26.1% YoY) came in above our estimate of 590,000.
* Our FY18 total volume estimate is 7.56m units, implying a monthly residual run-rate of 613k units.
* Strong volumes growth can be ascribed to robust demand during the ongoing
* KNR Construction reported sales of Rs3.9bn (below our estimate of Rs4.5bn). EBITDA improved mainly due to key projects nearing completion and hitting payment milestones.
* On the back of strong operating performance and negative tax rate, PAT jumped 34.5% yoy to Rs590.7mn (our estimate: Rs450mn).
* Management is targeting order inflows of Rs20-25bn during FY18 majorly from