reports
- Abhijit Tibrewal
MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained im...
HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality (HOMEFIRS IN, Mkt Cap USD0.9b, CMP INR802, TP INR1025, 28% Upside, Buy) HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ...
- Aliasgar Shakir
MOSL : SHOPPERS STOP: Ticking the right boxes
. SHOPPERS STOP: Ticking the right boxes (SHOP IN, Mkt Cap USD1b, CMP INR780, TP INR805, 3% Upside, Neutral) Aided by price hikes, SHOP reported a healthy 19% revenue growth in 2QFY23 from pre-COVID levels (8% beat) on healthy (+10%) SSSG and sustained volumes. EBITDA grew 2.3x YoY (22% over pre-COVID levels), with a 540bp margin improvement. 1) A strong recovery in revenue, backed by an improved pricing; 2) expansion within the Beauty and Private Label segment; and 3) healthy annual 12/15...
- Tushar Manudhane
MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-rela...
ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities (ERIS IN, Mkt Cap USD1.2b, CMP INR708, TP INR860, 21% Upside, Buy) Eris Lifesciences (ERIS) delivered better than expected 2QFY23 performance, led by superior traction in new launches and improved operating leverage. ERIS is notonly sustaining the momentum in its recently launched products, but it is also preparing itself for an aggressive pace of new introductions. We reiterate our earnings estimate for FY23/FY24 ...
- Prayesh Jain
MOSL : IIFL WEALTH: Revenue in line; PAT misses
. IIFL WEALTH: Revenue in line; PAT misses by 3% (IIFLWAM IN, Mkt Cap USD2b, CMP INR1822, TP INR2300, 26% Upside, Buy) IIFL Wealth (IIFLWAM)’s PAT increased 20% YoY and 10% QoQ to INR1.7b (3% miss) in 2QFY23. The miss on profitability was led by 4% higher-than-estimated operating expenses (OPEX; up 7% QoQ). The sequential increase in OPEX was attributable to a sharp 18% rise in variable employee expenses. Administration costs grew 12% QoQ. The cost/income (C/I) ratio of IIFLWAM contracted...
- Swarnendu Bhushan
MOSL : CLEAN SCIENCE & TECHNOLOGY: Remains confident in the new serie...
CLEAN SCIENCE & TECHNOLOGY: Remains confident in the new series of products (CLEAN IN, Mkt Cap USD2.1b, CMP INR1610, TP INR1589, 1% Downside, Neutral) CLEAN reported a beat on our EBITDA estimate, while gross margin expanded to 62.5% (est. 59.2%). EBITDAM was flat at 39.4% (v/s 39% in 1QFY23). The Performance and FMCG Chemicals segment performed better QoQ, led by increased realizations across all products. Input prices remain volatile and a short-term concern for the company. The prices of...
- Swarnendu Bhushan
NAVIN FLUORINE: Easier raw material sourcing to help better operating ...
NAVIN FLUORINE: Easier raw material sourcing to help better operating margins (NFIL IN, Mkt Cap USD2.7b, CMP INR4426, TP INR4311, 3% Downside, Neutral) NFIL reported an EBITDA/PAT that was 26%/29% lower than our estimate, primarily due to delay in commercialization of HFOs. Gross margin stood at 55.9%, expanding 130bp sequentially, while EBITDA margin contracted 130bp QoQ to 24.6%. The High Performance Products (HPP) and Specialty Chemicals businesses (up 76%/45% YoY) registered steep growt...
- Nitin Aggarwal
MOSL : MAX FINANCIAL SERVICES: Premium growth modest; VNB margin impr...
. MAX Financial Services: Premium growth modest; VNB margin improves to 31.3% (MAXF IN, Mkt Cap USD3b, CMP INR710, TP INR800, 13% Upside, Downgrade to Neutral) Product mix shifts in favor of Non-PAR; Banca growth remains under pressure MAXLIFE reported a modest growth in total premium with annual premium equivalent (APE) witnessing a decline of 7% YoY. VNB, however, saw flattish trends, driven by ~220bp YoY expansion in margins to 31.3%. Within segments, Non-PAR continues to see healthy mo...
- Nitin Aggarwal
MOSL : UNION BANK OF INDIA: Earnings beat driven by a healthy operati...
UNION BANK OF INDIA: Earnings beat driven by a healthy operating performance (UNBK IN, Mkt Cap USD3.9b, CMP INR47, TP INR65, 38% Upside, Buy) Asset quality improves sharply UNBK reported a 21% YoY growth in PAT at INR18.5b in 2QFY23 (10% beat), driven by higher NII and other income and tax reversals. However, the same was offset by higher than expected provisions. However, fresh slippages moderated by 31% QoQ, led by lower Corporate and Retail slippages. This, coupled with higher write-of...
- Krishnan Sambamoorthy
MOSL : COLGATE: Sales revival remains elusive
Colgate: Sales revival remains elusive (CLGT IN, Mkt Cap USD5.3b, CMP INR1603, TP INR1620, 1% Upside, Neutral) CLGT's 2QFY23 sales were in line with our estimates. Gross margin contracted higher than expected; however, lower advertisement costs led to in-line EBITDA. The management highlighted that 2QFY23 saw healthy sales momentum on the back of focused positioning of festive season initiatives. It remains cautiously optimistic of improving its overall growth trends, including in rural Ind...
- Nitin Aggarwal
MOSL : CANARA BANK: Operating performance healthy; loan growth gainin...
CANARA BANK: Operating performance healthy; loan growth gaining traction (CBK IN, Mkt Cap USD5.7b, CMP INR259, TP INR340, 31% Upside, Buy) Asset quality continues to improve Canara Bank (CBK) reported a healthy performance with 19% YoY NII growth (3% beat) driven by 8bp margin expansion in 2QFY23. This coupled with healthy treasury gains and traction in fee income drove overall earnings. The bank has further adopted the new tax regime and provided deferred tax worth INR24.5b. Tax rate for 2...
- Krishnan Sambamoorthy
MOSL : ASIAN PAINTS: Weak mix impact realization and margin
ASIAN PAINTS: Weak mix impact realization and margin (APNT IN, Mkt Cap USD36.4b, CMP INR3142, TP INR3150, Neutral) Results were well below estimates as realizations and gross margins were severely impacted, primarily led by product mix deterioration caused by (a) slower growth in high margin urban sales unlike the preceding couple of quarters and (b) the adverse impact of downtrading. The management guided that recovery in margins is expected to be gradual with majority of raw material (c...
- Prayesh Jain
ICICI SECURITIES: Market share in Retail Brokerage improves
ICICI SECURITIES: Market share in Retail Brokerage improves (ISEC IN, Mkt Cap USD2b, CMP INR507, TP INR640, 26% Upside, Buy) Revenue from ISEC’s Retail Broking business increased by 6% QoQ – the first sequential improvement in six quarters. The customer acquisition run-rate improved to 0.46m from 0.45m in 1QFY23. However, Prime subscription fees fell QoQ to INR269m. Revenue from Issuer Services improved 39% QoQ to INR488m, led by a recovery in Advisory activity. Overall revenue grew 8% QoQ ...
- Mukul Garg
MOSL : COFORGE: Strong growth outlook factored in the valuation
COFORGE: Strong growth outlook factored in the valuation (COFORGE IN, Mkt Cap USD2.8b, CMP INR3850, TP INR3820, 1% Downside, Neutral) Coforge Ltd (COFORGE) reported 2QFY23 revenue growth of 6.2% QoQ in constant currency (CC), ahead of our estimates of 5% QoQ CC. Reported USD growth was 3.4% QoQ, led by BFS (+11.1% QoQ in USD; 14% QoQ in CC). It reported an order intake of USD309m, with 12-month executable order rising 16.6% YoY to USD802m. EBITDA margin (pre-RSU) of 18.4% (+190bp QoQ) recove...
- Mukul Garg
MOSL : . PERSISTENT SYSTEMS: Strong growth factored in the rich valu...
PERSISTENT SYSTEMS: Strong growth factored in the rich valuations (PSYS IN, Mkt Cap USD3.4b, CMP INR3707, TP INR3660, 1% Downside, Neutral) PSYS posted a strong 2QFY23, with revenue growing 6.6% in CC terms (150bp above our estimate). In USD terms, revenue grew 5.8% QoQ (organic growth of 5% QoQ). EBITDA margin was strong at 18% (est. 16.8%). It reported a TCV of USD368m, with 62% new business TCV. Employee additions stood at 838 after the highest ever addition in 1QFY23. Attrition fell 110b...
- Nitin Aggarwal
MOSL : AXIS BANK: Exemplary performance; margins take a giant leap
. AXIS BANK: Exemplary performance; margins take a giant leap (AXSB IN, Mkt Cap USD30.7b, CMP INR826, TP INR975, 18% Upside, Buy) Asset quality remains robust AXSB reported a PAT of INR53.3b, up 70% YoY (26% beat), largely driven by 6% beat in NII and lower provisions, which declined 51% YoY. The business registered robust growth of 18% YoY and 4.2% QoQ growth in advances. The SME segment grew 28% YoY/8.7% QoQ. The large and mid-corporate segment also came back with a 6% QoQ growth, after...
- Krishnan Sambamoorthy
MOSL : ITC: Cigarette volumes deliver positive surprise, boost margin...
ITC: Cigarette volumes deliver positive surprise, boost margins (ITC IN, Mkt Cap USD52.4b, CMP INR350, TP INR400, 14% Upside, Buy) ITC’s sales growth momentum was better than expected across businesses in 2QFY23. Estimated Cigarette volume growth of 21% YoY was a positive surprise and resulted in a three-year volume CAGR of 5.1%. The higher-than- expected contribution from the high-margin Cigarettes business resulted in a 250bp beat on our EBITDA margin estimates, which came in at 36.4%. As...
- Abhijit Tibrewal
MOSL : BAJAJ FINANCE: Earnings in line; digital transformation aiding...
BAJAJ FINANCE: Earnings in line; digital transformation aiding momentum (BAF IN, Mkt Cap USD54.4b, CMP INR7429, TP INR8310, 12% Upside, Buy) PAT grew 88% YoY to ~INR27.8b (in line) in 2QFY23. This healthy operational performance was driven by robust customer additions, new loan acquisitions, and strong velocity, aided by its omnichannel strategy and the digital ecosystem. NII grew 29% YoY to INR55.4b. Other operating income grew 31% YoY, driven by a healthy improvement in fee income and hig...
- Team Research
MOSL: MOrning India (20/October/22): 1. IndusInd Bank (RoA expansion o...
MOrning India (20/October/22): 1. IndusInd Bank (RoA expansion on track; asset quality improves further); 2. Nestlé India; 3. UltraTech Cement; 4. Metro Brands; 5. AU Small Finance Bank; 6. Tata Communications; 7. Persistent Systems Today’s top research idea IndusInd Bank: RoA expansion on track; asset quality improves further IndusInd Bank (IIB) reported a PAT of INR18.1b (+57% YoY; in line) with steady operating performance across all key metrics during the quarter. Loan growth remained ...
- Alok Deora
MOSL : INFRASTRUCTURE: Project Awarding muted in 1H FY23; NHAI looks ...
Infrastructure: Project Awarding muted in 1H FY23; NHAI looks to fast track asset monetization process Project awarding by agencies such as NHAI has been soft in 1H FY23 with 810 kms of projects awarded. Road construction by NHAI in 1H FY23 stood at 1,471 km. With a target of 6,500 Kms in FY23, 2H would require massive project awarding to achieve the targets. Toll collections have been on an upswing with FASTag-based toll collections clocking INR 255.4b in 1H FY23 with a daily run-rate of ~I...
- Aliasgar Shakir
MOSL : TATA COMMUNICATIONS: Growth in Data revenue and healthy FCF yi...
TATA COMMUNICATIONS: Growth in Data revenue and healthy FCF yield continues (TCOM IN, Mkt Cap USD4.2b, CMP INR1210, TP INR1100, 9% Downside, Neutral) Revenue/EBITDA grew 2.8%/4.9% QoQ after modest growth (of 1% each) in the last few quarters, backed by healthy Data revenue/EBITDA growth of 4.6%/3.9%. Margin improved by 50bp to 25.5%, way above the management’s guidance of 23-25%. FCF remains strong at INR6.2b, with RoCE healthy at 28%. We have marginally cut our consolidated EBITDA, factori...
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