*SARDA ENERGY & MINEREALS*
CO HAS APPROVED EXPANSION PROJECT OF FERRO ALLOYS BY WAY OF ADDING ONE MORE FURNACE OF 36 MVA WITH AN ESTIMATED CAPEX OF 135 CRS,EARNINGS AND ESTIMATES L: CO ANNOUNCES COLLABORATION WITH MEIJI FOR EXCLUSIVE ACCESS TO FLUPYRIMIN RICE IN SOUTHEAST ASIA
CO HAS APPROVED EXPANSION PROJECT OF FERRO ALLOYS BY WAY OF ADDING ONE MORE FURNACE OF 36 MVA WITH AN ESTIMATED CAPEX OF 135 CRS,EARNINGS AND ESTIMATES L: CO ANNOUNCES COLLABORATION WITH MEIJI FOR EXCLUSIVE ACCESS TO FLUPYRIMIN RICE IN SOUTHEAST ASIA
Apollo Tyres - Strong demand & cost focus drive margin beat (Antique)
Apollo Tyres (APTY) reported strong revenue growth and EBITDA margin performance in its Indian and European operations. Consolidated EBITDA grew 70% YoY to INR 8.1bn, which was 5% ahead of our expectations due to better than expected margin in European operations. In the domestic market, demand visibility is low in the near-term due to Covid-19 related restrictions, but we expect sales to improve from 2QFY22E and grow strongly in FY22E. APTY's domestic operation is well poised for a robust revenue growth (17% CAGR over FY21-23E), led by cyclical upturn in CV and PV OEM demand and strong replacement demand. The company is well placed to leverage the demand recovery, with investments in capacities, R&D, brand building, rural distribution network, etc. APTY has gained 350bp market share in OTR and PCR segments and ~150bps in TBR segment in FY21, partly aided by restrictions on import of tyres into the country. Raw material prices have increased significantly in the recent months, which will have an adverse impact on profit margins despite the price increases taken by the company. APTY has successfully completed Enschede (Netherland) plant specialization, which has resulted in significant improvement in cost competitiveness and profit margins for its European operations. As Apollo is approaching the end of its capex cycle in FY22E, we expect it to generate positive FCF, de-leverage balance sheet and improve return ratios over the next three years. We maintain BUY rating with a price target of INR280 (15x FY23E PER).
Apollo Tyres (APTY) reported strong revenue growth and EBITDA margin performance in its Indian and European operations. Consolidated EBITDA grew 70% YoY to INR 8.1bn, which was 5% ahead of our expectations due to better than expected margin in European operations. In the domestic market, demand visibility is low in the near-term due to Covid-19 related restrictions, but we expect sales to improve from 2QFY22E and grow strongly in FY22E. APTY's domestic operation is well poised for a robust revenue growth (17% CAGR over FY21-23E), led by cyclical upturn in CV and PV OEM demand and strong replacement demand. The company is well placed to leverage the demand recovery, with investments in capacities, R&D, brand building, rural distribution network, etc. APTY has gained 350bp market share in OTR and PCR segments and ~150bps in TBR segment in FY21, partly aided by restrictions on import of tyres into the country. Raw material prices have increased significantly in the recent months, which will have an adverse impact on profit margins despite the price increases taken by the company. APTY has successfully completed Enschede (Netherland) plant specialization, which has resulted in significant improvement in cost competitiveness and profit margins for its European operations. As Apollo is approaching the end of its capex cycle in FY22E, we expect it to generate positive FCF, de-leverage balance sheet and improve return ratios over the next three years. We maintain BUY rating with a price target of INR280 (15x FY23E PER).
*Happiest Minds Technologies Ltd.* Concall Update
(Nirmal Bang Retail Research)
*Outlook – Neutral*
FY22 – Management has guided for organic revenue growth of 20% in medium term. With acquisition , growth of FY 22 would be higher
Management guided for a sustainable margin of 22-24% even when some operating cost could return in near term
FY21 the company had revenue growth of 10.8% and Ebitda margins of around 24.5%
• Dollar revenue came at $ 30.2 mn vs QoQ $ 26.2 mn. Of this organic revenue growth came in at 8.9%. The company had 3 months revenue impact of its acquisition Pimmcore services
• EBITDA Margin came at 25.3% vs QoQ 26.6%. Dip in margin was due to wage hike impact of Rs 9 cr .
• FY22 tax rate is expected to be around 20-24% tax rate
• Utilisation will be maintained in the range of 77-80% going ahead
• Adj. PAT came at Rs. 36.1 Cr
• Quarter EPS is Rs. 2.5 Share is trading at P/E of 78x Q4 annualised EPS
(Nirmal Bang Retail Research)
*Outlook – Neutral*
FY22 – Management has guided for organic revenue growth of 20% in medium term. With acquisition , growth of FY 22 would be higher
Management guided for a sustainable margin of 22-24% even when some operating cost could return in near term
FY21 the company had revenue growth of 10.8% and Ebitda margins of around 24.5%
• Dollar revenue came at $ 30.2 mn vs QoQ $ 26.2 mn. Of this organic revenue growth came in at 8.9%. The company had 3 months revenue impact of its acquisition Pimmcore services
• EBITDA Margin came at 25.3% vs QoQ 26.6%. Dip in margin was due to wage hike impact of Rs 9 cr .
• FY22 tax rate is expected to be around 20-24% tax rate
• Utilisation will be maintained in the range of 77-80% going ahead
• Adj. PAT came at Rs. 36.1 Cr
• Quarter EPS is Rs. 2.5 Share is trading at P/E of 78x Q4 annualised EPS
*Lupin – Q4FY21 Concall Update – Nirmal Bang Sec.*
*Outlook – Positive*
The management’s commentary was positive related to business outlook and profitability. EBITDA margins are likely to improve to 19% in FY22 from 17.8% in FY21 (including fx and other income) and further to 21-23% in FY23*
The stock is trading at 31.8x FY22E consensus earnings
Seasonally soft India business and weak US sales (-5.3% yoy) due to poor flu season led to lower overall sales for the quarter. However due to favorable product mix and cost measures, the company is witnessing improvement in margins for past 5 consecutive quarters and likely to continue the trend going forward.
*_US Business_* - the segment was down 10% yoy in cc FY21 at $720 mn vs $800mn. During the year, the company has launched Albuterol and currently enjoys 8% market share. it has not seen any change in the market dynamics post Sandoz’s entry as pricing remains stable. The management has guided that it has increased the supplies and it would visible in higher market share in coming quarters. It maintains its long-term market share target of 20%. Lupin has launched 15 products in FY21. gSpriva is expected to be launched in FY23 (court ruling in expected in mid-FY22). Lupin had to get out of market of Fortamet and Glumetza however it re-entered within a quarter. It currently holds 50% market share in Glumetza however pricing is very different. It has not yet launched Fortamet. Market share in Levothyroxin continues to improve – stands at 18.7% in Q4 vs 12% in Q3. Lupin is also in process of launching Revlimid by CY22. Going forward, in 1H competition in famotidine may impact growth in H1 however overall FY22 growth would led by ramp up in gBrovana, Alubterol. The management also reiterated that portfolio rationalisation is behind the company as the outlook for pricing is stable.
*_India_ is likely to grow by double digit in FY22*
*_API_* saw lower sales due to decline in offtake of flu related drugs. The segment, which has similar margins as company’s average, is likely to pick up from Q2 onwards
*_ROW_* sales was impacted to covid related supply issues. The segment is likely to improve with the normalisation in the overall situation
*R&D* as percent to sales is likely to come down in coming quarters.
*Outlook – Positive*
The management’s commentary was positive related to business outlook and profitability. EBITDA margins are likely to improve to 19% in FY22 from 17.8% in FY21 (including fx and other income) and further to 21-23% in FY23*
The stock is trading at 31.8x FY22E consensus earnings
Seasonally soft India business and weak US sales (-5.3% yoy) due to poor flu season led to lower overall sales for the quarter. However due to favorable product mix and cost measures, the company is witnessing improvement in margins for past 5 consecutive quarters and likely to continue the trend going forward.
*_US Business_* - the segment was down 10% yoy in cc FY21 at $720 mn vs $800mn. During the year, the company has launched Albuterol and currently enjoys 8% market share. it has not seen any change in the market dynamics post Sandoz’s entry as pricing remains stable. The management has guided that it has increased the supplies and it would visible in higher market share in coming quarters. It maintains its long-term market share target of 20%. Lupin has launched 15 products in FY21. gSpriva is expected to be launched in FY23 (court ruling in expected in mid-FY22). Lupin had to get out of market of Fortamet and Glumetza however it re-entered within a quarter. It currently holds 50% market share in Glumetza however pricing is very different. It has not yet launched Fortamet. Market share in Levothyroxin continues to improve – stands at 18.7% in Q4 vs 12% in Q3. Lupin is also in process of launching Revlimid by CY22. Going forward, in 1H competition in famotidine may impact growth in H1 however overall FY22 growth would led by ramp up in gBrovana, Alubterol. The management also reiterated that portfolio rationalisation is behind the company as the outlook for pricing is stable.
*_India_ is likely to grow by double digit in FY22*
*_API_* saw lower sales due to decline in offtake of flu related drugs. The segment, which has similar margins as company’s average, is likely to pick up from Q2 onwards
*_ROW_* sales was impacted to covid related supply issues. The segment is likely to improve with the normalisation in the overall situation
*R&D* as percent to sales is likely to come down in coming quarters.
*Piramal Enterprises Ltd. Q4FY21 Concall Update*
(Nirmal Bang Securities)
*Outlook: Neutral in near term; Positive in long term*
*Financial Services*
• Second wave of covid is not likely to have the same impact that it had in Q1FY20 but more like Q2FY20. Situation of developers is far better compared to Q1FY20.
• O/S Loan Book came at Rs. 44,668 Cr (QoQ -4%, YoY -12%). Wholesale book came at Rs. 39,365 Cr (YoY -23%)
• GNPA cam at 4.5% vs QoQ 3.7% & YoY 2.4% majorly due to movement from stage 2 to stage 3 and also due to reduction in total loan book.
• Restructured book is same as Q3 at Rs. 1741 Cr (3.9% of AUM)
• Co holds total provisions of Rs. 2800 Cr (6.3% of AUM) which it feels is enough to handle any adverse impact.
• Retail mix to increase from 12% to 50% via (i) organic growth, (ii) acquisition of DHFL, (iii) reduction in wholesale book.
• NCLT should clear the DHFL acquisition in two months post which the acquisition will be closed.
• Networth of financial services of Rs. 18,073 Cr will be enough to drive growth of around 20-25% for next 5 years in lending business and co wont require any more funds.
• *Unallocated capital of Rs. 11,029 Cr will remain unallocated and wont be used in financial services or pharma for the forseable future.*
• Exposure to Lodha has reduced to Rs. 2150 Cr from Rs. 3120 Cr as on March 2020. Of this Rs. 1530 Cr is via an SPV where PEL has 1.5x cover aganst ready inventory. Balance exposure is towards Macrotech Developer.
*Pharma*
• Revenue growth was strong at 19% YoY – a multi qtr high at Rs. 1,923 Cr.
• CDMO revenue was at Rs. 1290 Cr (+23% YoY)
• Complex hospital generics was at Rs. 507 Cr (+1% YoY)
• India consumer healthcare was at Rs. 127 Cr (+55% YoY)
• Margins remained strong at 28.6% vs YoY 29.3%
• Net debt of pharma declined to Rs. 2468 Cr from YoY Rs. 3981 Cr as the co used the funds raised from 20% dilution to the Carlyle group.
• Co is investing the funds from dilution towards expansion and acquisitions in the pharma business.
• Co would incur a capex of USD 90-100 mn over two years - FY22 & 23.
• Pharma business should grow at higher than earlier longer term guidance of 15% in FY22.
Stock is trading at P/E of 14.4x FY22E EPS. Stock implies NBFC valuation of 0.8x trailing BV, Pharma valuation of 12x TTM EV/EBITDA, Unallocated capital valuation of 1x BV.
(Nirmal Bang Securities)
*Outlook: Neutral in near term; Positive in long term*
*Financial Services*
• Second wave of covid is not likely to have the same impact that it had in Q1FY20 but more like Q2FY20. Situation of developers is far better compared to Q1FY20.
• O/S Loan Book came at Rs. 44,668 Cr (QoQ -4%, YoY -12%). Wholesale book came at Rs. 39,365 Cr (YoY -23%)
• GNPA cam at 4.5% vs QoQ 3.7% & YoY 2.4% majorly due to movement from stage 2 to stage 3 and also due to reduction in total loan book.
• Restructured book is same as Q3 at Rs. 1741 Cr (3.9% of AUM)
• Co holds total provisions of Rs. 2800 Cr (6.3% of AUM) which it feels is enough to handle any adverse impact.
• Retail mix to increase from 12% to 50% via (i) organic growth, (ii) acquisition of DHFL, (iii) reduction in wholesale book.
• NCLT should clear the DHFL acquisition in two months post which the acquisition will be closed.
• Networth of financial services of Rs. 18,073 Cr will be enough to drive growth of around 20-25% for next 5 years in lending business and co wont require any more funds.
• *Unallocated capital of Rs. 11,029 Cr will remain unallocated and wont be used in financial services or pharma for the forseable future.*
• Exposure to Lodha has reduced to Rs. 2150 Cr from Rs. 3120 Cr as on March 2020. Of this Rs. 1530 Cr is via an SPV where PEL has 1.5x cover aganst ready inventory. Balance exposure is towards Macrotech Developer.
*Pharma*
• Revenue growth was strong at 19% YoY – a multi qtr high at Rs. 1,923 Cr.
• CDMO revenue was at Rs. 1290 Cr (+23% YoY)
• Complex hospital generics was at Rs. 507 Cr (+1% YoY)
• India consumer healthcare was at Rs. 127 Cr (+55% YoY)
• Margins remained strong at 28.6% vs YoY 29.3%
• Net debt of pharma declined to Rs. 2468 Cr from YoY Rs. 3981 Cr as the co used the funds raised from 20% dilution to the Carlyle group.
• Co is investing the funds from dilution towards expansion and acquisitions in the pharma business.
• Co would incur a capex of USD 90-100 mn over two years - FY22 & 23.
• Pharma business should grow at higher than earlier longer term guidance of 15% in FY22.
Stock is trading at P/E of 14.4x FY22E EPS. Stock implies NBFC valuation of 0.8x trailing BV, Pharma valuation of 12x TTM EV/EBITDA, Unallocated capital valuation of 1x BV.
*Asian Paints – Q4FY21 Concall Update – Nirmal Bang Sec.*
*Outlook – Positive for long term*
*_Volume growth of 48% yoy was the key highlight of the quarter. This the second consecutive quarter wherein the company has reported stellar volume growth (30% in Q3). Per management they are gaining market share from both organised and unorganised players_*
The stock is trading at 65xFY22 E consensus earnings
Q4 was a bumper quarter with 48% volume growth, even post factoring the lock down of 10 days last year, the growth is upwards of 30%, which was much ahead of industry growth. The company not only gaining market share from unorganised and regional players but from organised biggies which is impressive. During the quarter, growth was back in urban region as well. In addition, large projects/institutional business has seen strong uptick in activity during the quarter. International business also witnessed broad based growth (up 22% yoy, except Ethiopia and Indonesia)
Like the industry, the company is also witnessing inflationary pressures in raw materials, however it has restrained from taking any price hikes in Q4, *the company has taken 2.8% hike in April* and might take more in future, as the input prices continue to inch upwards. *Given, the increase in covid cases, the demand might be muted in near term, however, we believe the company is well positioned to capture the recovery cycle as and when it happens*. The improvement in home improvement segments (both Kitchen and Bath) would also help the company in better profitability as both segments are on breakeven levels.
*Outlook – Positive for long term*
*_Volume growth of 48% yoy was the key highlight of the quarter. This the second consecutive quarter wherein the company has reported stellar volume growth (30% in Q3). Per management they are gaining market share from both organised and unorganised players_*
The stock is trading at 65xFY22 E consensus earnings
Q4 was a bumper quarter with 48% volume growth, even post factoring the lock down of 10 days last year, the growth is upwards of 30%, which was much ahead of industry growth. The company not only gaining market share from unorganised and regional players but from organised biggies which is impressive. During the quarter, growth was back in urban region as well. In addition, large projects/institutional business has seen strong uptick in activity during the quarter. International business also witnessed broad based growth (up 22% yoy, except Ethiopia and Indonesia)
Like the industry, the company is also witnessing inflationary pressures in raw materials, however it has restrained from taking any price hikes in Q4, *the company has taken 2.8% hike in April* and might take more in future, as the input prices continue to inch upwards. *Given, the increase in covid cases, the demand might be muted in near term, however, we believe the company is well positioned to capture the recovery cycle as and when it happens*. The improvement in home improvement segments (both Kitchen and Bath) would also help the company in better profitability as both segments are on breakeven levels.
*Cadila Healthcare – Business Update – Nirmal Bang Sec.*
*Overall the deal looks positive*
Cadila Healthcare has sold its Animal Healthcare Established Markets Undertaking to Multiples Alternate Asset Management (consortium including Canada Pension Plan Investment and RARE Enterprises) for lumpsum consideration of Rs 2921 cr
FY20 audited sales was Rs 513 cr and EBITDA was Rs 88 cr; FY21 provisional sales are Rs 600 cr (*implying 4.9x EV/Sales) and Rs 150 cr EBITDA. The business doesn’t have any debt.
Cadila would still retain one component of Animal healthcare for regulated markets however the business is under development and would take 3-4 yrs to commercialise
The company would use the proceeds to pare down debt on the books and to grow other businesses.
*Overall the deal looks positive*
Cadila Healthcare has sold its Animal Healthcare Established Markets Undertaking to Multiples Alternate Asset Management (consortium including Canada Pension Plan Investment and RARE Enterprises) for lumpsum consideration of Rs 2921 cr
FY20 audited sales was Rs 513 cr and EBITDA was Rs 88 cr; FY21 provisional sales are Rs 600 cr (*implying 4.9x EV/Sales) and Rs 150 cr EBITDA. The business doesn’t have any debt.
Cadila would still retain one component of Animal healthcare for regulated markets however the business is under development and would take 3-4 yrs to commercialise
The company would use the proceeds to pare down debt on the books and to grow other businesses.
*BSE Ltd.* | *CMP* Rs. 735 | *M Cap* Rs. 3309 Cr | *52 W H/L* 735/372
(Nirmal Bang Retail Research)
*Result ahead of expectation*
Revenue from Operations came at Rs. 152.2 Cr (26.2% QoQ, 27.2% YoY) vs expectation of Rs. 131.2 Cr, QoQ Rs. 120.6 Cr, YoY Rs. 119.6 Cr
EBIDTA came at Rs. 37.3 Cr (1585.5% QoQ, 709.8% YoY) vs expectation of Rs. 32.5 Cr, QoQ Rs. 2.2 Cr, YoY Rs. 4.6 Cr
EBITDA Margin came at 24.5% vs expectation of 24.7%, QoQ 1.8%, YoY 3.8%
Adj. PAT came at Rs. 32.6 Cr vs expectation of Rs. 31.4 Cr, QoQ Rs. 32.4 Cr, YoY Rs. -1.3 Cr
Quarter EPS is Rs. 7.2
Share is trading at P/E of 18x FY22E EPS
(Nirmal Bang Retail Research)
*Result ahead of expectation*
Revenue from Operations came at Rs. 152.2 Cr (26.2% QoQ, 27.2% YoY) vs expectation of Rs. 131.2 Cr, QoQ Rs. 120.6 Cr, YoY Rs. 119.6 Cr
EBIDTA came at Rs. 37.3 Cr (1585.5% QoQ, 709.8% YoY) vs expectation of Rs. 32.5 Cr, QoQ Rs. 2.2 Cr, YoY Rs. 4.6 Cr
EBITDA Margin came at 24.5% vs expectation of 24.7%, QoQ 1.8%, YoY 3.8%
Adj. PAT came at Rs. 32.6 Cr vs expectation of Rs. 31.4 Cr, QoQ Rs. 32.4 Cr, YoY Rs. -1.3 Cr
Quarter EPS is Rs. 7.2
Share is trading at P/E of 18x FY22E EPS
*SHIPPING CORPORATION OF INDIA LTD.* | *CMP* Rs. 115 | *M Cap* Rs. 5357 Cr | *52 W H/L* 135/39
(Nirmal Bang Retail Research)
*Result ok*
Revenue from Operations came at Rs. 875.4 Cr (4.1% QoQ, -33.4% YoY) vs QoQ Rs. 841.2 Cr, YoY Rs. 1313.8 Cr
EBIDTA came at Rs. 223.2 Cr (-1.1% QoQ, -26.5% YoY) vs QoQ Rs. 225.7 Cr, YoY Rs. 303.8 Cr
EBITDA Margin came at 25.5% vs QoQ 26.8%, YoY 23.1%
Adj. PAT came at Rs. 82 Cr vs QoQ Rs. 131.6 Cr, YoY Rs. 111.1 Cr
Quarter EPS is Rs. 1.8
Share is trading at P/E of 7.7x TTM EPS
(Nirmal Bang Retail Research)
*Result ok*
Revenue from Operations came at Rs. 875.4 Cr (4.1% QoQ, -33.4% YoY) vs QoQ Rs. 841.2 Cr, YoY Rs. 1313.8 Cr
EBIDTA came at Rs. 223.2 Cr (-1.1% QoQ, -26.5% YoY) vs QoQ Rs. 225.7 Cr, YoY Rs. 303.8 Cr
EBITDA Margin came at 25.5% vs QoQ 26.8%, YoY 23.1%
Adj. PAT came at Rs. 82 Cr vs QoQ Rs. 131.6 Cr, YoY Rs. 111.1 Cr
Quarter EPS is Rs. 1.8
Share is trading at P/E of 7.7x TTM EPS
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The price of the world's largest cryptocurrency dropped from around $54,819 to $45,700, its lowest since March 1, in just under two hours following the tweet
Biggest triggers for Indian businesses ahead:-
1..Internet in the hands of most Indians.
2. Emerging B2C brands.
The cumulative effect of it is beyond massive.
1..Internet in the hands of most Indians.
2. Emerging B2C brands.
The cumulative effect of it is beyond massive.
3 recent decisions:
1. India has restricted American Express and Diners Club from adding new customers because they flouted rules & refused to store financial data in India.
2. European Union announced that it will revive stalled trade talks with India (after 8 years)
3. Huawei and ZTE excluded from 5G trials in India. China called the decision unfair.
1. India has restricted American Express and Diners Club from adding new customers because they flouted rules & refused to store financial data in India.
2. European Union announced that it will revive stalled trade talks with India (after 8 years)
3. Huawei and ZTE excluded from 5G trials in India. China called the decision unfair.
Top 10 Companies with highest Foreign holding:
HDFC (72.78%)
Zee Entertainment (64.15%)
Shriram Transport Finance (61.01%)
Apollo Hospitals (54.51%)
Axis Bank (51.43%)
IndusInd Bank (50.91%)
ICICI Bank (47.78%)
Kotak Mahindra Bank (44.23%)
PVR (42.6%)
Redington (42%)
HDFC (72.78%)
Zee Entertainment (64.15%)
Shriram Transport Finance (61.01%)
Apollo Hospitals (54.51%)
Axis Bank (51.43%)
IndusInd Bank (50.91%)
ICICI Bank (47.78%)
Kotak Mahindra Bank (44.23%)
PVR (42.6%)
Redington (42%)