Buy Navneet Education Ltd For Target Rs.215.00 - Motilal Oswal

Growth on track across segments; maintain Buy

Publication: Continuous growth, aided by syllabus change

The publication business grew 10% YoY in 1QFY18 despite deferment of publication of 9th grade text books in Maharashtra by the education board. Growth going forward is expected to be stronger, with likely spillover of revenu

3/10/2017 12:10:36 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Sadbhav Engineering Ltd For Target Rs.378.00 - Emkay

Strong set of results

* SADE reported revenue of Rs9.4bn (up 17% YoY) and EBITDA of ~Rs1.1bn (up 23% YoY) better than our expectations of Rs8.9bn and Rs0.9bn respectively.

* Standalone debt level has reduced by Rs2bn QoQ to Rs14.5bn mainly owing to receipt of mobilization advance and reduction in debtors.

* Mining segment execution

3/10/2017 12:06:52 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral United Breweries Ltd For Target Rs.875.00 - Motilal Oswal

Results better than feared, margin pressures likely due to GST

* Net sales rose 7.0% YoY (est. of -8%) to INR16.7b in the quarter. Despite the highway ban in 1QFY18, volumes were flat YoY, and importantly, UBBL expanded its market share by 150bp YoY. Quarterly sales growth was commendable, given that April sales were down in double-di

3/10/2017 11:48:58 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Persistent Systems Ltd For Target Rs.710.00 - Prabhudas Lilladher

We met Persistent Systems to get a business update. Key takeaways are as follows:

Recent acquisition of PARX aims at strengthening its Salesforce competency in Europe (especially DACH region). Persistent is also focusing on IoT deals, especially in Automotive/Manufacturing vertical through its partnership with IBM. Overall IBM IoT deal revenues (US$47mn in FY17) are expected to grow b

3/10/2017 11:44:22 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Infosys Ltd For Target Rs.1,050.00 - Motilal Oswal

Steadfast peace with the arrival of Mr. Nandan Nilekani

Addresses risk of further downside; more to do for gradual valuation re-rating

* Infosys (INFO) announced the appointment of Mr. Nandan Nilekani as non-executive non-independent Chairman of the Board.

* It also accepted the resignation of Mr. R. Seshasayee, Pr

3/10/2017 11:40:21 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Prabhat Dairy Ltd For Target Rs.145.00 - Emkay

Tracking well; Retain BUY

* Revenue growth strong at Rs 3.6bn, grew 22.7% yoy, EBITDA at Rs 283mn grew 14.1% yoy. APAT at Rs 58mn declined 3.5% yoy impacted by higher tax rate

* Revenue growth aided by healthy growth in milk powder, ghee & cheese. Share of value added products increased to 85%. Company is ramping up modern trade presence

3/10/2017 11:34:44 AM | Posted in Broking Firm Views - Long Term Report read full news
Sell GlaxoSmithKline Consumer Healthcare Ltd For Target Rs.4,500.00 - Motilal Oswal

Market share continues to decline; schemes impact gross margin

* GSK Consumer (SKB) posted 4.4% YoY net sales growth (including operating income; our estimate: -2%) to INR9.9b. EBITDA declined 18.3% YoY (our estimate: -11.1%) to INR1.7b, while adjusted PAT fell 17.7% YoY (our estimate: -6.9%) to INR1.3b. Gross sales declined 1.3% YoY t

3/10/2017 11:29:37 AM | Posted in Broking Firm Views - Long Term Report read full news
Hold Adani Ports Ltd For Target Rs.355.00 - Emkay

* Revenue of Rs27.45bn +51% YoY, +23% QoQ was higher than expectations on account of Rs6.95bn SEZ income as against Rs300mn in same quarter last year. At the same time, port income of Rs17.4bn was lower than expectations, grew 7% YoY

* Consolidated EBITDA margin of 57.1% was lower than expectations as implied SEZ EBITDA margins dropped to ~40% as SEZ income included development income

2/10/2017 1:15:13 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell SAIL Ltd For Target Rs.30.00 - Motilal Oswal

Net debt will continue to rise eroding equity value; Maintain Sell

SAIL’s reported EBITDA loss declined from INR2.6b in 4QFY17 to INR0.8b in 1QFY18. However, adjusting for the prior period sales of INR2.5b and prior period employee cost reversal of INR1.7b, the adjusted EBITDA loss stood at INR5b as against estimate of INR5.6b. Finance cost was

2/10/2017 1:06:24 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold JSW Energy Ltd For Target Rs.64.00 - Emkay

* Net generation declined 3.7% yoy to 6.4bn units due to lower offtake. Poor generation across Thermal projects was offset by strong performance of the Hydro segment. Derived average realization was down by 5.4% yoy at Rs3.5/unit.

* Consequently, revenue declined by 8.9% yoy to Rs22.3bn. EBITDA declined by 22.2% yoy to Rs8.7bn due to lower yoy merchant rates, increased employee cost a

2/10/2017 12:57:17 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy TVS Motor Ltd For Target Rs. 612.00 - Motilal Oswal

Higher RM, GST and BS3 compensation impact margins

* RM cost inflation hurts margins, but recurring margins at 7.1%: Overall volumes grew 12.2% YoY (+19.1% QoQ) to 802.1k units. Realizations rose 5.2% YoY (+0.4% QoQ) to INR42.4k. Net sales grew 18% YoY (+19.5% QoQ) to INR33.9b (est. of INR34.6b). Reported EBITDA margin contracted 80bp

2/10/2017 12:48:34 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Indraprastha Gas Ltd For Target Rs. 1,238.00 - Emkay

In-line result, volume visibility strong; maintain BUY

*  Result came operationally in line with our estimate, with EBITDA at Rs2.77bn (growing by 30% qoq) vs our estimate of Rs2.7bn while PAT came in at Rs1.61bn (up by 20% qoq) vs our estimate of Rs1.6bn. Volume continued to grow, rising by 3.87% qoq to 4.84mmscmd. CNG volume grew by 6.4% qoq to

2/10/2017 12:41:18 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Bank of Baroda Ltd For Target Rs. 198.00 - Motilal Oswal

Stress additions remain elevated; provisions mar earnings

* Bank of Baroda (BoB) reported PAT of INR2.0b v/s loss of INR989m in 4Q. Elevated NPL provisions (2.3% credit costs annualized) on account of continued stress additions weighed down on PPoP (-4%/-1% QoQ/YoY; in-line), leading to a sharp PAT miss.

* NII growth was muted at 2%/1% QoQ/Yo

2/10/2017 12:35:42 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Gujarat State Petronet Ltd For Target Rs.213.00 - Emkay

* As expected, volume grew by 15% qoq to 26.9mmsmcd, largely driven by Reliance Industries (RIL) and Essar Steel. Management has indicated that volume would further increase in the ensuing quarter, again due to startup of RIL’s ROGC. Current volume runrate is ~28-29mmscmd.

*Transmission tariff improved by 4.5% qoq to Rs1.16/scm. Other expenditure was lower on qoq basis, as the c

2/10/2017 12:23:42 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Cadila Healthcare Ltd For Target Rs.555.00 - Motilal Oswal

Weak 1QFY18, but expect strong recovery going forward

CDH’s 1QFY18 net revenue declined ~4% YoY to INR21.9b (~17% miss). Weak revenue can be ascribed to a decline of ~19% YoY in India business and ~9% in EM business. EBITDA margin came at ~12.6% v/s 22.9% in 1QFY17 and 18.7% in 4QFY17. Adjusted for GST impact, EBITDA margins should have been 18%

2/10/2017 12:16:24 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Cipla Ltd For Target Rs.525.00 - Emkay

Result highlights

* Slight miss in Q1 results with revenues at Rs35.2bn (estimate Rs38.2bn), adjusted EBITDA at Rs5.9bn (estimate Rs6.5bn) and EBITDA margin at 16.8% (estimate 17.1%) while adjusted net income came in at Rs3.5bn (estimate Rs3.2bn), supported by higher other income.

* The big revenue miss was in the API business which may have

2/10/2017 12:08:54 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Bosch Ltd For Target Rs.21,994.00 - Motilal Oswal

Below est.; very weak CV volumes, high import content impact EBITDA

*Slower transition to BS4 and lower aftermarket impact revenue:

Revenue grew ~4% YoY to ~INR26.5b (est. of ~INR30.2b), driven by 5% YoY growth in Autos. Diesel segment grew by 8% YoY (driven by ASP increase due to BS4) and Gasoline by 54%. No

2/10/2017 12:01:03 PM | Posted in Broking Firm Views - Long Term Report read full news
Reduce Sun Pharmaceutical Industries Ltd For Target Rs.400.00 - Emkay

Result highlights

* Overall guidance on EBITDA margins and a modest decline in revenues appears a stretch in what is otherwise a tough year for SUNP.

* ROW revenues have been the one bright spot for SUNP and should remain strong. However it’s unclear how the other revenue growth levers like EM market, APIs etc. make up for a weak US pe

2/10/2017 11:49:21 AM | Posted in Broking Firm Views - Long Term Report read full news
Neutral BPCL Ltd For Target Rs.515.00 - Motilal Oswal

Adjusted EBITDA above estimate; GRM at USD4.9/bbl

* BPCL’s reported EBITDA of INR12b (-70% YoY, -45% QoQ) was lower than our estimate of INR19b due to product inventory loss of INR7.3b during the quarter. EBITDA adjusted for product inventory loss stood at INR19.5b, ahead of our estimate. Reported GRM (inclusive of crude inventory gain/loss) sto

2/10/2017 11:40:28 AM | Posted in Broking Firm Views - Long Term Report read full news
Sell Symphony Ltd For Target Rs. 930.00 - Emkay

* SYML’s Q1FY18 operational performance was below our expectations. While the sales declined by 15% yoy, EBIDTAM plummeted by 1,068bps yoy and PAT declined by 24% yoy.

* Erratic rains during May - June 2017 impacted primary and secondary sales. Launch of next generation range of air-coolers at discounted prices during the January – June 2017 dents profitability.

2/10/2017 11:27:48 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy State Bank Of India Ltd For Target Rs. 341.00 - Motilal Oswal

High slippages and sharp drop in margins weigh on earnings; Sharp earnings cut

* SBIN’s PAT increased 5.4x YoY to INR20b, but missed our estimate by 34%. A sharp rise in slippages from non-corporate credit, impact of demon, and loan waiver led to high interest reversal (INR13.6b, 20bp margins impact) and miss of 11% on NII. Fee income/SA growth o

2/10/2017 11:19:16 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Deepak Fertilisers And Petrochemicals Corporation Ltd For Target Rs.405.00 - Emkay

* Consolidated net revenues increased by 20% yoy to Rs12.1bn driven by sharp growth in fertiliser segment. Consolidated EBITDA increased 13% yoy to Rs1.2bn while EBITDA margins contracted 60 bps yoy to 10% on the back of higher RM cost

* Fertilizer revenues jumped 57% yoy to Rs4.6bn driven by higher sale of manufactured fertilisers (+350% yoy) while trading revenues dropped 53% yoy in

2/10/2017 11:05:30 AM | Posted in Broking Firm Views - Long Term Report read full news
Sell Gujarat Alkalies and Chemicals Ltd For Target Rs.540.00 - Kotak Sec

Gujarat Alkalies & Chemicals (GACL) stock has rallied ~27% since our initiation date 18th April 2017. The uptick in the stock price was driven by a sharp surge in caustic soda prices, however, the benefit of the same was restricted due to poor demand of chlorine. Going ahead, we believe that 10% increase in caustic soda prices in the last 3 months augurs well for the company. But, excess su

2/10/2017 10:21:32 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy GNA Axles Ltd For Target Rs.418.00 - Religare Sec

(Axle)rated growth ahead

Established in 1993, GNA Axles is amongst the leading manufacturers of rear axle shafts used in on-highway and off-highway vehicular segments in India. It manufacture and supply a diverse range of rear axle shafts, other shafts and spindles for the on-highway segment, i.e. for LCVs, MCVs, HCVs and other transport vehicles such

2/10/2017 9:52:19 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Allcargo Logistic Ltd For Target Rs. 228.00 - Motilal Oswal

Margins impacted due to higher provisions in P&E segment; PAT in line due to lower tax outgo 

*AGLL’s revenue grew 6% YoY (and 9% QoQ) to INR14.83b (v/s our estimate of INR14.2b), with MTO revenue growing 9% YoY, led by 14% YoY volume growth.

* EBITDA declined 23% YoY (and 2% QoQ) to INR1.03b, below our estimate of INR1.1b, as

30/09/2017 3:03:27 PM | Posted in Broking Firm Views - Long Term Report read full news