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MOSL: Morning India (9/July/21): 1. India Strategy | Preview 1QFY22 (Vaccinated to grow!); 2. TCS (1QFY22 Result); 3. India Life Insurance

 MOrning India (9/July/21): 1. India Strategy | Preview 1QFY22 (Vaccinated to grow!); 2. TCS (1QFY22 Result); 3. India Life Insurance

 

Today’s top research theme

India Strategy: Vaccinated to grow!

• FY22 commenced with an odd sense of déjà vu as the second COVID-19 wave swept across the country over Apr-May'21, resulting in localized lockdowns and restrictions The pace of vaccinations has also picked up - India administered 4m vaccines daily, on average, in Jun'21, double the average of 2m vaccines daily in May'21; this is expected to improve further on increased availability. The equity markets have largely looked through the turbulent period of April/May'21 and have shown strong resilience, with indices trading near alltime highs.
• We expect PBT/PAT to grow 110%/114% for the MOFSL Universe in 1QFY22. Sequentially, though, earnings should moderate 19% each for both the MOFSL Universe and the Nifty. The MOFSL Universe is expected to post a PBT/PAT CAGR of 12%/15% over 1QFY20-1QFY22. On a two-year basis, Metals, Technology, and Private Banks are likely to contribute 104% to incremental 1QFY22 PAT v/s 1QFY20
• Nifty sales/EBITDA/PBT/PAT should grow 48%/38%/89%/94% YoY in 1QFY22E. Over 1QFY20-1QFY22, the Nifty should post a sales/EBITDA/PBT/PAT CAGR of 2%/11%/12%/16%.
• Marginal downward revision in Nifty FY22 EPS: Nifty FY22E EPS estimates have seen a downgrade of 2% to INR733 (prior: INR748), while FY23 EPS is stable at INR868 (prior: INR870). As the economy reopens and vaccinations gain momentum, demand recovery could strengthen. We expect earnings to accelerate and estimate an FY21- 23 CAGR of 26% for Nifty EPS.

Piping hot news

Cabinet clears ₹23,123 crore emergency response package to fight Covid

To tackle the Covid-19 pandemic, the Union Cabinet has approved a new emergency response package worth ₹23,123 crore, following the first meeting of Prime Minister Narendra Modi's revamped cabinet on Thursday. Addressing a press briefing, India's new health minister Mansukh Mandaviya said, "To avert the devastation caused by the second Covid wave, the government had announced a ₹23,000-crore relief package."