* Overall volume declined ~10% YoY (-7.5% QoQ) to 788k units due to a ~14% YoY decline in domestic volume, while Exports declined by ~3% YoY due to the impact of demonetization and transition to BS-IV from BS-III. Total 2W sales declined by ~7% in 4QFY17, while 3W volumes fell sharply by 28% YoY led by both domestic and exports falling by 30% & 25% respectively led by demonetization and cur
* We expect AMRJ’s revenue to grow 15% YoY (+1% QoQ) to INR13.4b. Price hikes of 10% were taken from Nov-16 to Mar-17.
* Spot LME lead prices decreased ~4% QoQ in 3QFY17 —the impact is likely to be reflected in 4QFY17.
* EBITDA margin is likely to contract ~30bp YoY (+60bp YoY) to 16%. Price increase of 10% in last 5 months to offset the increase in raw material
* Volumes grew by 8% YoY (+45% QoQ), as M&HCV and LCV sales grew 10% and 3% YoY respectively, led by lower than expected pre buying before BS-IV implementation.
* We expect realization to decline by 1.6% YoY (-1.3% QoQ) led by continuous higher discounts due to lower demand.
* Net revenue is likely to grow 6.5% YoY (+43% QoQ), led by growth in volume and decline in reali
Deleveraging the balance sheet
* In line with its stated strategy of de-leveraging the balance sheet, Future Lifestyle Fashions Limited (FLFL) has completed two transaction 1) Sale of 26% stake in Lee Cooper and raised Rs2.5bn and 2) Sale of 51% stake in investee brands and raised Rs4.5bn.
* Future Speciality Retail Limited (FSRL), housing th
Indoco Remedies is engaged in manufacturing, marketing and distribution of pharmaceutical products/services in domestic & international markets. Company has vast marketing network in domestic market and has supply agreements with companies like Actavis & Aspen to supply formulations to regulated markets. Company has 9 manufacturing facilities of which 4 are FDA approved. On account of F
* Stock run-up leaves less room for upside:
Since our initiation of the viewpoint note on Kaveri Seed Company (KSCL) on December 19, 2016, the stock has delivered ~36% return and is currently trading at a valuation of 16x /13x its FY2018E/FY2019E earnings. Our positive view was based on the govern
Island Star throws positive valuation surprise
Key highlights of deal
* Canada Pension Plan Investment Board (CPPIB) will initially infuse Rs7.24bn to own 30% in Island Star SPV and will take this up to 49% by investing ~Rs16bn cumulatively.
* The money infused will be used for buying ou
Cement price hike of Rs20/bag MoM in April 2017 implies better demand environment:
Shree Cement has undertaken a price hike of Rs20/bag MoM in April 2017 across all the regions where it has a presence. This clearly indicates pricing discipline and is in line with the price hikes undertaken by large pan-India cemen
Moving in the right direction; Upgrade to BUY
Magma Fincorp recently concluded the sale of its hard bucket non-performing loans to the tune of Rs6.8bn (consolidated) at a haircut of Rs1.4bn (post-tax). Notwithstanding the one-time P&L hit, the sale should reduce asset quality pressures given the scheduled migration to 90-dpd NPL recognition in FY18
Key highlights of Q4FY17 operational performance
* Sobha clocked Q4FY17 sales volume of 0.72msf (up 18% QoQ) worth Rs5.1bn (up 35% QoQ in value terms) owing to higher volumes from NCR (Gurugram) market.
* As expected, Sobha achieved only 86% of its FY17 volume guidance and 93% of its FY17 value guidance of 3.5msf of bookings wort
RJIO successfully signs up 72 million customers under JIO Prime membership – much ahead of street expectation of 50% retention ratio:
Reliance JIO (RJIO) has announced that around 72 million customers have signed up for the JIO Prime membership. The retention ratio of 72% on a subscriber base of 100 million
Building blocks for strong growth
KMB announces board approval to sell 6.2m shares
* Kotak Mahindra Bank (KMB), in a board meeting held on 30 March 2017, approved the sale of up to 62m shares. This translates to 3.4% pre-issue dilution and capital raise of INR53b at CMP.
* The stated intent by manage
* Well poised to garner large pie in domestic branded apparel space:
Arvind Ltd(Arvind) is among the few large companies in India, which has transformed itself froma pure textile company into the largest branded retail player having a portfolio of top global brands across all market/price segments.
Best placed for sustained outperformance...
Bajaj Finance (BFL), owned by Bajaj Finserv (58%) and part of the Bajaj Group, is a fast growing, well-diversified leading NBFC in the country. BFL focuses on four broad categories viz. consumer, commercial, SME and rural compared to the single product focus of most NBFCs on CV finance, gold finance or auto f
Easing troubles to pave way for growth
Karur Vysya Bank (KVB) is one of the oldest private sector banks with strong presence in the Southern parts of India. More than 53% of KVB’s 706 branches are located in Tamil Nadu, however it is gradually branching out in other parts of India also.
Loan growth trajec
Leading alcohol beverage stock at 13.3x PER
* We initiate coverage on India’s fourth largest spirits company, RDCK with a BUY rating and TP of Rs202. RDCK has transformed itself from a bulk/country liquor manufacturer to a branded spirits manufacturer.
* We are positive on RDCK’s long-term potential given 1) its brand equity which
* A seasoned market leader in tiles sector with insatiable thirst for expansion:
Kajaria Ceramics is the largest manufacturer of tiles in India (Ceramic and Vitrified) and the ninth largest in the world, having an annual capacity of 68.6 million square meters (Msm) across four states (nine operatin
Tracking Well; Retain Accumulate
We met GCPL to get recent updates on business and its strategy going ahead
* Domestic business has returned to normalcy post demonetization across categories. Company is gearing itself for GST and looking at opportunities to gain market share from unorganized players. Growth is
TVS Motor Company Ltd. (TVS) is the India’s third largest two wheeler manufacturing company and head quartered in Chennai. The company is involved in the manufacturing of motorcycles, scooters, mopeds and three wheelers. TVS also has larger presence across geographies. The company has presence over 50 countries in Asia, Africa, a
Steadfast; growth gaining momentum
CBSE curriculum opportunity sizable; future-ready with digital offerings
* NELI dominates the market for supplementary educational material for the Maharashtra and Gujarat State Education Boards. Its domineering position makes it a key beneficiary of the sustained demand for
We recently met the company. With new capacities coming on stream in India and Europe and demand environment improving, APTY is expected to witness healthy growth in revenues over the FY18-FY19. Further, ramp-up in the two wheeler space will also support growth for the company. Falling imports from China is positive for the truck/bus tyre demand. After witnessing a sharp increase, natural rubbe
* Diversified portfolio through presence in multiple and growing sectors; some available at deep discount:
Godrej Industries (GIL) has a diversified portfolio of established businesses such as FMCG, Real Estate and Agri, which have the potential to register strong double-digit growth in the short t
Meaningful revival on cards...
Established in 1950, Huhtamaki PPL Ltd (HPPL) is India's leading manufacturer of primary consumer packaging and labelling materials, offering a wide portfolio of packaging solutions that include flexible packaging, labelling technologies, specialized cartons, tube laminates, holographic solutions, etc. With 14 manufac
Phillips Carbon Black Ltd. (PCBL), a part of RP-SanjivGoenka Group, is India's largest and globally seventh largest carbon black (CB) producer. PCBL has four strategically located state-of-the-art plants at Durgapur, Palej, Cochin and Mundra with capacity totalling to 4,10,000 MTPA along with green power capacity of 76 MW. PCBL also has a dedicated capacity of Specialty Blacks of 40,000 MTP
Private insurance players on the rise:
As per the latest IRDA data, private life insurance companies are gaining market share from the largest player ie LIC. In February 2017, the Annual Premium Equivalent (APE) for the private players grew by 23% YoY while the same for LIC was down 1% YoY. As a re