Articles By Edelweiss

758 Articles

Analyst Corner: Maintain ‘buy’ on Tata Steel with TP of Rs 500

We remain positive on TS-BSL due to possibility of further improvement in profitability from higher downstream shipments; deleveraging focus; and multi-pronged cost reduction initiatives.

Analyst Corner: Fair value of Rs 30 on Cipla for concerns on IV Tramadol

Cipla as future payment is based on several conditions being met, failing which Cipla can renegotiate deal terms.

Tata Steel Rating ‘buy’; India volumes in Q2 a positive surprise

Domestic Ebitda/t likely to rise by 2x q-o-q in quarter; Europe operations on the mend; outlook is positive; ‘Buy’ maintained

Maintain ‘buy’ on JSPL with a target price of Rs 275

Taking cognizance of 6MFY21 performance (sales volume of 3.5mt), we believe that management’s guidance of 7mt of standalone shipments looks achievable.

Welspun India Rating: buy; revival of US demand boosts outlook for firm

FY21/22e Ebitda up 3/1% given robust order book and leadership; TP raised to Rs 75

Avenue Supermarts rating: Hold; Online scale-up a must for future

Company expected to gain from industry consolidation; ‘Hold’ retained, given lofty valuations, with TP of Rs 2,157

All priced in—We remain positive on DMart given the long-term structural play, lean cost structure, strong liquidity support and a superior execution record.

Dr Reddy’s bets big on agreement with Celgene

The settlement ahead of a pre-trial hearing lend more visibility to earnings beyond FY22 and removes a long-pending overhang for Dr Reddy’s as well as Natco.

Dr Reddy, gRevlimid, Celgene, Natco, Aurobindo, Cadila, Dr Reddy shares

Voltas Rating ‘buy’; firm’s arsenal is growing stronger

It outdid peers in last fiscal; crisis helping firm reposition itself; ‘Buy’ maintained

Solar Industries Rating ‘hold’; first quarter bore the brunt of the lockdown

Growth in exports and order book of Rs 12 bn were key positives; FY22e EPS up 4%; TP raised to Rs 1,026

SOIL expects its international business to perform well given the gradual pick-up in demand across Nigeria, Turkey and Tanzania.

India Grid Trust rating: Buy — KKR as sponsor will remove uncertainty

Move creates undercurrent of tangible gains; a long-term structural bet; ‘Buy’ retained

Heritage Foods rating: Buy — Outlook is positive for company

RoCE is expected to jump 640bps in FY21e; TP raised to Rs 456; ‘Buy’ rating maintained

All in all, we expect RoCE to jump 640bps in FY21 and 860bps over FY20–22 to 23%.

Page Industries rating: Hold — Covid cast a shadow on performance in Q1

Page reported 66% y-o-y contraction in revenue (volumes down 69% y-o-y), primarily due to its metro city focus, where the lockdown impact was sharper. Gross margin plunged to 48% (Q4FY20: 59%, Q1FY20: 55%) due to under-absorp

United Spirits rating: Hold — Worst is over for the liquor company

Manufacturing and sale of alcoholic beverages was banned from 24th March to 4th May, which dragged USL’s volumes 49.2% y-o-y. By the end of June, all manufacturing units had become operational; by mid-August about 90% off-t

Maintain ‘buy’ on Sadbhav Engineering with TP at Rs 67

The lockdown and the pandemic dragged toll collection significantly during the quarter, but it has now recovered to ~95% of pre-Covid level.

sadhav engineering, SEL, Ebitda margin, NHAI, HAM projects, Sadbhav Engineering Revenue

Larsen & Toubro rating: Buy — E&A deal conclusion lends more firepower

It will help build cash pool to push growth in core businesses; to add 10% to FY22e core EPS if used to trim debt; ‘Buy’ retained

Given recent deterioration in L&T’s balance sheet due to cyclical issues in E&C, commissioning of Hyderabad Metro and NBFC challenges, Monday’s development will enhance investors’ comfort.

Maintain ‘buy’ on GMR Infrastructure with TP of Rs 30

The pandemic sent the traffic at DIAL and HIAL spiraling down 92% YoY and 95% YoY, respectively, in Q1FY21. Non-aero revenue at DIAL and HIAL also plummeted, down 57% YoY and 80% YoY respectively.

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Reliance Industries rating ‘hold’; Deal for Future Group highly synergistic

While costs are modest, deal likely to dilute RoCE in near term; RIL valuation bakes in too much optimism; ‘Hold’ retained

Suprajit Engineering rating ‘buy’; resilient show by subsidiaries is the highlight

Despite near term weakness, growth story is intact; ‘Buy’ retained with TP of Rs 219.

J Kumar Infraprojects rating: Buy – Performance in quarter better than expected

Order book remains robust; company is likely to break even in FY21; TP raised to Rs 145; ‘Buy’ maintained

With its payment cycle remaining healthy, JKIL would break even this fiscal in our view.

ICICI Lombard rating: Buy — Significant deal at not too high valuation

Bharti AXA losses not best gauge of value creation; details to make picture clearer; ‘Buy’ retained with TP of Rs 1,600

Zee Entertainment rating: ‘Buy’; Covid-19 took a toll on ad revenue in Q1

Worst behind the company; long-term prospects are positive; ‘Buy’ maintained.

Analyst Corner: Maintain ‘buy’ on Voltas with target price at Rs 730

In our view, Voltas has consolidated supply chain via robust sourcing strategies and smarter SKU positioning while retaining one of the lowest cost structures versus most peers.

We maintain Voltas as our top pick despite a sharp recent rally.

KEC International rating: Buy – Performance in first quarter was steady

Margin is likely to improve to ~9.8-10.0%, but unlikely to touch 10.5% given commodity headwinds. Debt management and cash collection have been key focus areas, reflected in flat net debt at Rs 33 bn in Q1FY21.

Analyst Corner: ‘Hold’ on Eicher Motors with revised TP of Rs 23,730

Royal Enfield (RE) is well placed to capitalise on rising structural premiumisation trend and minimal replacement demand.

Lemon Tree rating: Maintain ‘buy’ with target price of Rs 26

From the liquidity perspective, LT has sufficient cash to meet its total expenses including debt obligations for the next four quarters assuming the worst-case scenario.

Our sector outlook (including mid-market) remains bleak (unchanged).

Godrej Properties Rating: ‘Buy’; Resilient show in Q1 despite Covid-19 pressure

While disruption could get stretched, prospects robust in long term; ‘Buy’ retained.

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