*AIA Engineering: Final duty determination by Canada - 22%*
The Canada Border Services Agency (CBSA) has made final determinations of dumping and subsidizing with respect to certain grinding media originating in or exported from India.
Total duty of 22% which includes 15.7% as margin of dumping and 6.3% subsidy.
The Canadian International Trade Tribunal (CITT) is continuing its inquiry into the question of injury to the domestic industry and will make a finding by August 27, 2021.
These margins do not reflect the anti‑dumping duty to be levied on future importations of dumped goods. In the event of an injury finding by the Canadian International Trade Tribunal, normal values have been provided to the exporters which provided sufficient information for future shipments to Canada and these normal values would come into effect the day after the injury finding.
*Our view:* If 22% final duty is imposed then Canada volumes may not come back to company in future.
However our volume estimates may not be at risk as we have not assumed Canada volumes in projections
The Canada Border Services Agency (CBSA) has made final determinations of dumping and subsidizing with respect to certain grinding media originating in or exported from India.
Total duty of 22% which includes 15.7% as margin of dumping and 6.3% subsidy.
The Canadian International Trade Tribunal (CITT) is continuing its inquiry into the question of injury to the domestic industry and will make a finding by August 27, 2021.
These margins do not reflect the anti‑dumping duty to be levied on future importations of dumped goods. In the event of an injury finding by the Canadian International Trade Tribunal, normal values have been provided to the exporters which provided sufficient information for future shipments to Canada and these normal values would come into effect the day after the injury finding.
*Our view:* If 22% final duty is imposed then Canada volumes may not come back to company in future.
However our volume estimates may not be at risk as we have not assumed Canada volumes in projections
*Tech M Result First cut: Strong performance overall. Revenue growth as well as margins surprise positively, growth fairly broad based*
✅ Revenue grew by 3.9% in CC terms to $ 1,384 mn and was ahead of our expectations of 2.8% growth.
✅ Revenue in US$ terms grew 4.1% QoQ against our est of 3%
✅ EBIT margins came in 15.2%, 95 bps higher than our est of 14.2% but 133 bps lower QoQ. This outperformance was on account of operating leverage coming into play due to a strong revenue growth
✅ The company reported a strong new deal TCV for the second quarter in a row, signing US$815 mn worth of deals, with 352 mn in the telecom business and US$
✅ All verticals posted positive growth with telecom business (40% of topline) growing 3% QoQ. This is the fourth consecutive quarter of positive growth in the vertical and it has grown by ~13% in the past 12 months. Manufacturing and BFSI verticals continued their recovery, growing 4.7% and 3.7% respectively while technology and retail verticals rebounded after a poor Q4FY21, growing 8.1% and 3.2% QoQ respectively
✅ In terms of geography, Americas grew by 6.8% QoQ. This is extremely encouraging given that it struggled throughout FY21, when it degrew 2.6% for the year. Europe continued its robust recovery, growing 6.6% QoQ on the back of three consecutive quarters of strong performance. RoW (26% of topline) disappointed with a degrowth of 3% after a strong performance in FY21 where it was the only geography to post positive growth.
✅ Top 5/10/20 clients posted mid single digit growth. This is the fourth consecutive quarter of growth after a dismal H1CY20. The company also added a new client in each of the US$50/20/10 mn bracket.
✅ Headcount was increased by 4% QoQ as the company added ~5,200 employees on a net basis
✅ Attrition shot up 400 bps to 17%, this is the highest attrition of all domestic large cap cos and is probably the only negative form the overall result.
*Our View*
✅ This is an extremely encouraging set of results on account of a broad based growth, positive margin surprise and top client growth. Consecutive quarters of strong deal wins suggest a robust pipeline as well. While attrition remains a concern, growth in the telecom segment as well as its US$382 mn new deal signing gives us demand visibility. Given that the stock trades at 22x 1y fwd EPS which is ~30-40% cheaper than its large cap peers, the stock can see some positive momentum going forward
Regards,
*Edelweiss Wealth Research*
✅ Revenue grew by 3.9% in CC terms to $ 1,384 mn and was ahead of our expectations of 2.8% growth.
✅ Revenue in US$ terms grew 4.1% QoQ against our est of 3%
✅ EBIT margins came in 15.2%, 95 bps higher than our est of 14.2% but 133 bps lower QoQ. This outperformance was on account of operating leverage coming into play due to a strong revenue growth
✅ The company reported a strong new deal TCV for the second quarter in a row, signing US$815 mn worth of deals, with 352 mn in the telecom business and US$
✅ All verticals posted positive growth with telecom business (40% of topline) growing 3% QoQ. This is the fourth consecutive quarter of positive growth in the vertical and it has grown by ~13% in the past 12 months. Manufacturing and BFSI verticals continued their recovery, growing 4.7% and 3.7% respectively while technology and retail verticals rebounded after a poor Q4FY21, growing 8.1% and 3.2% QoQ respectively
✅ In terms of geography, Americas grew by 6.8% QoQ. This is extremely encouraging given that it struggled throughout FY21, when it degrew 2.6% for the year. Europe continued its robust recovery, growing 6.6% QoQ on the back of three consecutive quarters of strong performance. RoW (26% of topline) disappointed with a degrowth of 3% after a strong performance in FY21 where it was the only geography to post positive growth.
✅ Top 5/10/20 clients posted mid single digit growth. This is the fourth consecutive quarter of growth after a dismal H1CY20. The company also added a new client in each of the US$50/20/10 mn bracket.
✅ Headcount was increased by 4% QoQ as the company added ~5,200 employees on a net basis
✅ Attrition shot up 400 bps to 17%, this is the highest attrition of all domestic large cap cos and is probably the only negative form the overall result.
*Our View*
✅ This is an extremely encouraging set of results on account of a broad based growth, positive margin surprise and top client growth. Consecutive quarters of strong deal wins suggest a robust pipeline as well. While attrition remains a concern, growth in the telecom segment as well as its US$382 mn new deal signing gives us demand visibility. Given that the stock trades at 22x 1y fwd EPS which is ~30-40% cheaper than its large cap peers, the stock can see some positive momentum going forward
Regards,
*Edelweiss Wealth Research*
#Result #Tomorrow FRIDAY
#NiftyWaala
1⃣ Britannia
2⃣ IOC
3⃣ Sun Pharma
4⃣ UPL
#VaydaWaali
1⃣ ABFRL
2⃣ Bandhan Bank
3⃣ BHEL
4⃣ Chola Finance
5⃣ Exide
6⃣ Dr Lal Pathlabs
7⃣ Marico
8⃣ PI Industries
9⃣ Shriram Transport Finance
#CashWaali
Blue Dart
LT Foods
Dalmia Bharat Sugar
Equitas SFB
HIL
HOCL
Jindal Saw
JK Paper
JSW Energy
Kansai Nerolac
KEC Int
Macrotech
Nazara
NELCO
NIIT
Rossari
Sunflag Iron
V-Guard
Asahi India
Sundaram Clayton, etc
#NiftyWaala
1⃣ Britannia
2⃣ IOC
3⃣ Sun Pharma
4⃣ UPL
#VaydaWaali
1⃣ ABFRL
2⃣ Bandhan Bank
3⃣ BHEL
4⃣ Chola Finance
5⃣ Exide
6⃣ Dr Lal Pathlabs
7⃣ Marico
8⃣ PI Industries
9⃣ Shriram Transport Finance
#CashWaali
Blue Dart
LT Foods
Dalmia Bharat Sugar
Equitas SFB
HIL
HOCL
Jindal Saw
JK Paper
JSW Energy
Kansai Nerolac
KEC Int
Macrotech
Nazara
NELCO
NIIT
Rossari
Sunflag Iron
V-Guard
Asahi India
Sundaram Clayton, etc
*Rollovers to Aug Series – Par Rolls, Higher MW Position & Subdued Basis, Probability of Range bound move with Sector Rotation*
*Nifty Roll @ 83% (v/s 85%), OI base (9.5 Mn shrs v/s 9.7 Mn shrs), BankNifty Roll 81% (v/s 84%), OI base (20 lac v/s 19 lac ), MW 92%(v/s 89%),OI base up by 3%, in absolute no of shrs(4367 Mn v/s 4230 Mn), Roll cost level in most of stocks is ~30 -32 (48 -49 v/s 56-58 v/s 47 -48 bps).*
================================================
• Market remained sluggish for July series.
• Writers ruled the July series as Indices & stocks remained rangebound unlike previous three series.
• FII sold highest (~19k cr) since Jan’21 in cash for Jul series whereas DII continue to remain buyers (~15k cr).
*Volatility:*
• India VIX maintain lowest band (8-15) since two series. Skews remained flat in July series.
• *Current series skews comparatively flat indicating range bound move & drift may continue.*
*Marketwide:*
• In absolute number of shares Aug series will start with ~3% higher OI of 4367 Mn shrs(~INR 1886 Bn) as against 4230 Mn shrs(~INR 1767 Bn) of previous expiry - *indicating majority position rolled over to next series despite of big drifts.*
*Option Data:*
• Nifty PCR_OI for Jul series opened at 1.27 (1.39 v/s 1.56 v/s1.70 ).15000 PE having highest OI of ~26 lac followed by 15500 OI of 21 lacs. 16000 CE with 18 lacs followed by 16500 @15 lacs(26th Aug) *indicating lowest hedge in previous 6 series.*
*Road Ahead:*
- Implied vol touched lowest band (~10-12,) first time post Mar’20sell off. Fear receding but probability of mean aversion increases.
*Above 15950 -16k probabilities of up move towards 16200, 15500 immediate supports. Sentiment may turn negative below 15400.*
*Sector:*
• Long Creation/ Carry Fwd :Banking & POWER
• Short Creation/ Carry Fwd: IT & Auto
*Stocks:*
• Stocks where rolls picked up: NTPC, BJAUT, AL, LPC, PIDI & LT.
• *Equirus Rollover Picks(Long Bias Based on Rollover (10-12% move, sl 3.5%):, BOB, PIEL & BPCL.*
Stay Safe |Quant Desk |Equirus
*Nifty Roll @ 83% (v/s 85%), OI base (9.5 Mn shrs v/s 9.7 Mn shrs), BankNifty Roll 81% (v/s 84%), OI base (20 lac v/s 19 lac ), MW 92%(v/s 89%),OI base up by 3%, in absolute no of shrs(4367 Mn v/s 4230 Mn), Roll cost level in most of stocks is ~30 -32 (48 -49 v/s 56-58 v/s 47 -48 bps).*
================================================
• Market remained sluggish for July series.
• Writers ruled the July series as Indices & stocks remained rangebound unlike previous three series.
• FII sold highest (~19k cr) since Jan’21 in cash for Jul series whereas DII continue to remain buyers (~15k cr).
*Volatility:*
• India VIX maintain lowest band (8-15) since two series. Skews remained flat in July series.
• *Current series skews comparatively flat indicating range bound move & drift may continue.*
*Marketwide:*
• In absolute number of shares Aug series will start with ~3% higher OI of 4367 Mn shrs(~INR 1886 Bn) as against 4230 Mn shrs(~INR 1767 Bn) of previous expiry - *indicating majority position rolled over to next series despite of big drifts.*
*Option Data:*
• Nifty PCR_OI for Jul series opened at 1.27 (1.39 v/s 1.56 v/s1.70 ).15000 PE having highest OI of ~26 lac followed by 15500 OI of 21 lacs. 16000 CE with 18 lacs followed by 16500 @15 lacs(26th Aug) *indicating lowest hedge in previous 6 series.*
*Road Ahead:*
- Implied vol touched lowest band (~10-12,) first time post Mar’20sell off. Fear receding but probability of mean aversion increases.
*Above 15950 -16k probabilities of up move towards 16200, 15500 immediate supports. Sentiment may turn negative below 15400.*
*Sector:*
• Long Creation/ Carry Fwd :Banking & POWER
• Short Creation/ Carry Fwd: IT & Auto
*Stocks:*
• Stocks where rolls picked up: NTPC, BJAUT, AL, LPC, PIDI & LT.
• *Equirus Rollover Picks(Long Bias Based on Rollover (10-12% move, sl 3.5%):, BOB, PIEL & BPCL.*
Stay Safe |Quant Desk |Equirus
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