*Dixon Technologies Management Interaction Note – 3 Nov 2020*

*Outlook: Positive*

*Mobile Business:* Production under mobile PLI scheme will start from Jan. Last year mobile revenues in Padget were Rs. 500 Cr.

*OEM business* is cash neutral and W.Cap cycle is negative (-6 days). As a result ROCE is much higher at 70% for TVs and 50%+ for Set-top box & Security Surveillance. Mobiles are also going to be on OEM basis and their ROCE is expected to be at 100% which will push up the overall co level ROCE from the current 34% to ~50% from next year.
*ODM business* has higher W.Cap cycle (12 days). It is important in ODM business to operate at full scale in order to generate good ROCE. Around 90% of lighting and 100% of washing machine business is on ODM basis generating ROCE of 30%.

*Shift from OEM to ODM in lighting:* Few years back ODM mix in lighting was 22% when EBITDA margins were 3.7% and ROCE was 28%. Today ODM mix has moved up to 90% with EBITDA margins of 9.0% and ROCE is the same at 28%.

*ODM mix to decline from next year:* ODM mix in total co revenues is 35% today, mainly from Washing Machine and Lighting. Since Mobile segment will be on OEM basis, the co level mix of ODM will reduce although on absolute level, ODM revenue will continue to grow.

*Other points:* Lighting margins to vary between 8.5-9.5%. Co has onboarded a couple of people from Wistron (manufacturing head) and a Global OEM.

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*Prince Pipes & Fittings Ltd.* | *CMP* Rs. 234 | *M Cap* Rs. 2574 Cr | *52 W H/L* 261/75
(Nirmal Bang Retail Research)
*Result is above expectations*
Revenue from Operations came at Rs. 458.7 Cr (51.6% QoQ, 6.9% YoY) vs expectation of Rs. 392.2 Cr, QoQ Rs. 302.5 Cr, YoY Rs. 429.2 Cr
EBIDTA came at Rs. 80.3 Cr (153.9% QoQ, 23.3% YoY) vs expectation of Rs. 52.9 Cr, QoQ Rs. 31.6 Cr, YoY Rs. 65.1 Cr
EBITDA Margin came at 17.5% vs expectation of 13.5%, QoQ 10.5%, YoY 15.2%
Adj. PAT came at Rs. 46.6 Cr vs expectation of Rs. 25.8 Cr, QoQ Rs. 11.3 Cr, YoY Rs. 33.4 Cr
Quarter EPS is Rs. 4.2
Share is trading at P/E of 18.2x FY22E EPS

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*Adani Gas Ltd.* | *CMP* Rs. 223 | *M Cap* Rs. 24526 Cr | *52 W H/L* 223/77
(Nirmal Bang Retail Research)
*Result has improved*
Revenue from Operations came at Rs. 417.9 Cr (112% QoQ, -11.6% YoY) vs QoQ Rs. 197.2 Cr, YoY Rs. 472.6 Cr
EBIDTA came at Rs. 209.5 Cr (170.9% QoQ, 54.3% YoY) vs QoQ Rs. 77.4 Cr, YoY Rs. 135.8 Cr
EBITDA Margin came at 50.1% vs QoQ 39.2%, YoY 28.7%
Adj. PAT came at Rs. 134.3 Cr vs QoQ Rs. 38.9 Cr, YoY Rs. 120.1 Cr
Quarter EPS is Rs. 1.2
Share is trading at P/E of 59.8x TTM EPS

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*Varun Beverages Q3CY20 Concall Update*

*Healthy recovery with double digit growth witnessed in September month; In-home consumption trend to normalize at current elevated levels*

*Outlook: Positive in long term*

• Sales +4% YoY at Rs. 1803 Cr; Volumes degrew by 4% at 119 mn cases. Shift in mix towards CSD segment (74% vs 69% YoY) and away from water segment (20% vs 25% YoY) resulted in an increase in realizations by 8%.
• Realisation of Water is 33% of CSD while Juices is 120% of CSD.
• *September month witnessed growth of 13% in India.*
• Growth has been higher in rural & semi-urban regions. Rural mix is around 30%, Semi urban is also at 30% and the remaining is urban.
• *In-home consumption has grown by 20-25% while on the go consumption has degrown. Normally, 30-40% of consumption is on the go and balance is in-home. Co believes the increased in-home consumption trend will continue as well as on-the-go consumption growth will improve in future.*
• Institutional segment (less than 5% mix) will is impacted severely as demand from hotels, restaurants, theatres and corporate will remain negligible in near term.
• EBITDA Margin came at 20.7% vs QoQ 23%, YoY 18.7%. Some cost-optimisation measures implemented during the pandemic enabled improved margins.
• Normally co caries inventory of less than 15 days and only before the peak season it keeps worth 30 days.
• India, SL, Nepal contributed to 81% of revenue and 3 Morroco, Zambia, Zimbabwe contributed the balance.
• Debt stands at Rs. 2840 Cr.

Share is trading at P/E of 22x FY22E EPS

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China suspends Ant's blockbuster IPO in Shanghai and Hong Kong

https://www.moneycontrol.com/news/business/markets/ant-groups-ipo-suspended-by-shanghai-stock-exchange-as-regulators-meet-jack-ma-6061511.html

Download moneycontrol app: http://m.moneycontrol.com/mom

*Muthoot Finance Ltd. -S* | *CMP* Rs. 1231 | *M Cap* Rs. 49384 Cr | *52 W H/L* 1406/477
(Nirmal Bang Retail Research)
*Result is in-line with expectations*
NII came at Rs. 1659.3 Cr vs expectation of Rs. 1585.7 Cr, YoY Rs. 1467 Cr, QoQ Rs. 1513.6 Cr
PBP came at Rs. 1210.7 Cr vs expectation of Rs. 1204.3 Cr, YoY Rs. 1073.8 Cr, QoQ Rs. 1142.6 Cr
Provision came at Rs. 10.7 Cr vs expectation of Rs. 40 Cr, YoY Rs. 26.5 Cr, QoQ Rs. 14.6 Cr
PAT came at Rs. 894.4 Cr vs expectation of Rs. 873.8 Cr, YoY Rs. 857.9 Cr, QoQ Rs. 843.3 Cr
Quarter EPS is Rs. 22.3
Share is trading at P/E of 12.3x FY22E EPS & 3.7x trailing P/BV

# Asset Quality etails are awaited


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*SGX Nifty -40 pts (11783) from last trade 11823 ,*


Nikkei +333 pts ,
Hangseng -150 pts ,
Now @6.52am .


Dow +554.98 pts ,Nsdq +202.96 pts, S&P +58.78 pts , Bovespa +2027 pts  , Ftse +131 pts , Dax +300 pts , Cac +114 pts , Crude @ $38.51 brl (+0.85), Brent @ $40.16 brl (+1.29) , Gold @ 1915.20 (+4.79), Silver @ $24.475 (+0.14), Euro @ $1.1756, JPY @ $104.56, INR @ 74.615




*Today's Corporate Action*

*4th Nov Ex Date*



LT

Special Dividend - Rs. - 18.0000

RICOAUTO

Dividend - Rs. - 0.3000







*Today's Board Meetings*

*4-Nov-20*




ABIRAFN

Quarterly Results

ALCHCORP

Quarterly Results

BASF

Quarterly Results

EIHOTEL

Quarterly Results

GAYAHWS

Quarterly Results

HAPPSTMNDS

Quarterly Results

HINDPETRO

Quarterly Results

INDCEMCAP

Quarterly Results

JKLAKSHMI

Quarterly Results

KALPATPOWR*

General;Quarterly Results

KCPSUGIND

Quarterly Results

LUPIN

General;Quarterly Results

MAFATIND

Quarterly Results

NELCO

Quarterly Results

NRAGRINDQ

Quarterly Results

PETRONET

Quarterly Results

PIDILITIND

Quarterly Results

PTL

Quarterly Results

SBIN

Quarterly Results

SUNDRMFAST

Interim Dividend;Quarterly Results

TTL

Quarterly Results

UNITDSPR

Quarterly Results

UPSURGE

Quarterly Results

VISAKAIND

Audited Results;Quarterly Results

 




*Stock under F&O ban on NSE*

*4-Nov-20*



None


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*Economic Times*
*Business Standard*

Ø  IMF chief economist urges more fiscal stimulus to boost recovery
Ø  Adani's Stratatech Mineral Resources bags big coal block
Ø  Scam-hit PMC Bank invites EoI from potential investors for reconstruction
Ø  India's GSPL says new pipeline to boost FY22 gas supply by a quarter
Ø  Finmin says no increase in service charges by any public sector bank
Ø  Government reaches out to MNCs over global digital tax
Ø  Sun Pharma's Q2 net profit rises 70% on one-time tax credit
Ø  Adani Group frontrunner for developing Sri Lanka's port terminal: Report
Ø  No additional compliance burden on private firms for LTC scheme: Fin Sec
Ø  Govt may allow EPFO to invest in cash-starved infra sector through AIFs
Ø  European Union considering further legal action in Brexit standoff
Ø  RBI looking to diversify investment options for forex reserves: Report

*Business Line*
*Mint*

Ø  Power sector InvIT IndiGrid reports ₹384-crore revenue
Ø  FinMin notifies Abu Dhabi’s Sovereign Wealth Fund
Ø  Adani Ports & SEZ Q2 consolidated profit up 32% to Rs 1,394 cr
Ø  GSFC posts 400% q-o-q rise in standalone Q2 net
Ø  Adani Gas’ Q2 profit jumps 195% fired by volume recovery
Ø  Mangalore Chemicals Q2 net profit up 79 per cent to Rs 40.5 cr
Ø  Ant Group's $37-bn IPO suspended in Shanghai and Hong Kong
Ø  Xiaomi manages to sell 10 million Made in India powerbanks
Ø  Saudi Aramco profits dive in coronavirus-hit Q3
Ø  PVR reports losses of ₹184 crore for Q2 2021
Ø  RBI exploring investment options for forex reserves, sources say

*Financial Express*
*Deccan Chronicle*

Ø  PM Modi to chair virtual global investor roundtable on Thursday
Ø  India, UAE agree to explore ways to facilitate investments
Ø  India’s exports dip 5.4 pc in October to USD 24.82 bn: Govt data
Ø  Centre to delink land held by 17 sick PSUs
Ø  India's economy worst-hit among emerging markets

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DOW JONES UP 555
DOW JONES FUT DOWN 153
NASDAQ UP 203
NASDAQ FUT UP 32
SGX NIFTY DOWN 48

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*Sun Pharma – Q2FY21 Concall Update – Nirmal Bang Sec.*
*Outlook – Positive*
The stock is trading at 20.7x FY22E consensus earnings

• Gradual recovery in business despite markets not being normalised
• Specialty Biz
o $108 mn revenues
o R&D – 37% of total R&D spend
o Recently Launched illumya in japan and received good response
• *Margins improved on account of product mix, operating leverage, higher contribution from specialty business*
• Forex loss Rs 116 cr, vs gain 79 cr in Q1,
• The company repaid debt of ~$300mn; Current Net debt is $400mn
• *India*
o 6% qoq
o 30% of consol sales
o In-line with mkt growth – led by chronic which grew by high single digit, acute decline however lower than q1, sub-chronic recovered in Q2 – low single digit growth whereas Q1 declined
o Acute affected due to lower footfall and lower flu season
o Launched 22 new products
o *Q3 would have better growth*
• *US*
o Revenues $235mn
o 30% of consol sales
o Specialty business Improved qoq
o Illumya reached pre-covid levels
o *Taken 5% price increase on Illumya*
o Generics – continues to be competitive however grew yoy
• *Emerging mkts*
o $210mn up 4% yoy and 21% qoq
o Yoy underlying growth in cc at 9%
o 18% of total sales
• *ROW*
o $178mn up 10% yoy and 31% qoq
o Driven by all round growth in multiple mkts japan, EU plus taro’s ROW
o 16% of total sales
• *API*
o Rs 510 cr, up 9% yoy
• Continue to invest in R&D – Q2 Rs 613 cr – 7.2% of sales
o 92 ANDAs, 6 NDAs awaiting approvals
• Halol – completed CAPAs and waiting from agency’s response

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Brokers Radar

·   Dabur India CLSA raised TGT from 590 to 620

·   Dabur India Citi raised TGT from 490 to 590

·   Adani Ports HSBC TGT at 470

·   Adani Ports Nomura TGT 450

·   Adani Ports CLSA TGT 425

·   Adani Ports Jefferies TGT 475

·   Dabur India TGT by Credit Swiss at 590

·   SUN Pharma CLSA TGT at 710,

·   Sun Pharma Nomura TGT at 623

·   Morgan Stanley TGT on Sun Pharma at 611

·   Godrej Properties downgraded by Macquarie to 1050

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BLOCK DEAL AS ON 03-11-2020

INDUSINDBK
+ 23 LK @ 642.85 BOFA SECURITIES EUROPE SA
- 23 LK @ 642.85 UBS PRINCIPAL CAPITAL ASIA LIMITED


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Data - 04th Nov

FIIs bought in cash, few longs in index futs, bought index options👍👍👀

BN futs add long positions with more built up in puts🧐

Longs - SUNPHARMA, DABUR, RBLBANK👍

Shorts - UPL, HCLTECH👎

SC - ITC, BPCL, HEROMOTOCO👀

Very few fresh shorts in RELIANCE 👀 https://t.me/marketswizard

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*Bulk deal*
❇️Vikas Multicorp Limited : Albula Investment Fund Ltd Buy 3500000 Shares @ Rs. 7.3

*Insider Trade*
*Acquisition*
❇️MN Ventures Private Limited Promoter Acquisition 1000000 shares of Hfcl Ltd on 03-Nov-20

❇️SHARAD V. PAREKH Promoter Acquisition 20800 shares of Nilkamal Ltd. on 02-Nov-20

❇️Varun Berry Director Acquisition 142666 shares of Britannia Industries Ltd. on 02-Nov-20

*Disposal*
❇️SHARAD V. PAREKH JT. WITH MS. MAYA S. PAREKH Promoter Disposal 20800 shares of Nilkamal Ltd. on 02-Nov-20

❇️JSW Steel Employees Welfare Trust – ESOP Plan 2016 A/c Promoter Group Disposal 5000 shares of Jsw Steel Ltd. on 29-Oct-20

*Revoke*
❇️BHANU VYAPAAR PRIVATE LIMITED Promoter Group Revoke 36000 shares of Emami Ltd.-$ on 29-Oct-20

❇️TMT VINIYOGAN LIMITED Promoter Group Revoke 15000 shares of Emami Ltd.-$ on 29-Oct-2020 https://t.me/marketswizard

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*Fund Houses Recommendations*


MS maintains Overweight call on *Adani Port*, raise target at Rs 439/sh. (Positive)

Goldman maintains Buy call on *Adani Ports*, raise target at Rs 430/sh. (Positive)

CLSA maintains Buy call on *Adani Ports*, target price at Rs 425/sh. (Positive)

HSBC maintains Buy call on *Adani Ports* with FY21-23 Port EBITDA estimates being raised by 5.8-9.5%, target price at Rs 470/sh. (Positive)

Jefferies maintains Buy call on *Adani Ports* with 10% upward revision to FY22 EPS estimates, target price at Rs 475/sh. (Positive)

MS has an Overweight call on *Sun Pharma*. It believes, ramp-up of global specialty biz could be a medium-term re-rating catalyst, target at Rs 611/sh. (Positive)

CLSA maintains Buy call on *Sun Pharma*, raises FY21 EPS estimate by 39% on back of its big beat in Q2, raise target at Rs 710/sh. (Positive)

CITI maintains Buy call on *Dabur*, raise target price at Rs 590/sh. (Positive)

JP Morgan maintains Buy call on *Dabur*, raise target price at Rs 580/sh. (Positive)

CLSA maintains Buy call on *Dabur* with target being raised to Rs 620/Sh. (Positive)

CS has an Outperform call on *Dabur*, target raised to Rs 590/Sh (Positive)

Credit Suisse has an Underperform call on *Sun Pharma* as it believes Ilumya will face high competition from three new drugs next year, target price at Rs 420/sh (Neutral)

Macquarie has downgraded *Godrej Properties*, maintain target at Rs 1050/sh (Negative) https://t.me/marketswizard

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