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ICICI Securities

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399 Articles

Asian Paints rating – Add: Firm’s focus on market share gains is paying off

Two-year revenue growth CAGR of 4% was a surprise; earnings CAGR of 17.3% estimated for FY21-23; ‘Add’ retained with TP of Rs 3,400

Management guides for an operating margin band of 19-21%. In the near-term, there will be (likely) pent-up demand in Q2FY22; we model higher price growth in FY22 (vs. FY19-21). Our optimistic stance stays; retain Add.

Analyst Corner: Maintain ‘add’ on Hatsun Agro with TP of Rs 1,060

Hatsun has commenced Solapur plant in Q4FY21, Dharapuram (TN) plant in Q2FY22 and plans to commence Govindapur, Telangana plant in Q3FY22.

hatsun argo

Wipro Rating ‘Sell’; Beat on revenues in Q1, margins saw a miss

While turnaround signs are a positive, sustainability of growth is key; ‘Sell’ retained with TP raised to Rs 485

Balkrishna Industries rating – Add: Momentum in exports boosts prospects

FY22/23e EPS up 2/2.6%; TP raised to Rs 2,425 from Rs 2,269; downgraded to ‘Add’

Key risk: meaningful change in demand outlook. Downgrade to Add.

Analyst Corner – Suryoday SFB: Initiate with ‘buy’ & TP of Rs 310

Suryoday contained its non-staff costs at <2% even during the expansion of its branch network from 241 in FY18 to 556 in FY21.

We initiate with a ‘buy’ rating and target price of Rs 310, valuing the stock at 1.8 FY23E book value.

Analyst Corner| Ujjivan: Initiate coverage with ‘add’ and TP of Rs 35

Its pan-India presence with no single state contributing >20% of AUM as at Mar’21, coupled with an evolving product portfolio, would enable it to outpace systemic credit growth once the macro turns conducive.

Ujjivan

Cement – Q1FY22 Preview: Resilient performance expected in quarter

PAT intact despite cost rise; consensus earnings likely to be upgraded again; SRCM and UTCEM are top picks

Repco Home Finance Rating ‘Buy’; Q4 earnings were above estimates

2nd Covid wave impact is a key monitorable; ‘Buy’ retained with a target price of Rs 650

Vodafone Idea rating – Sell: Key variables showed an improving print in Q4

Liabilities coming up for payment may lead to a cashflow issue; FY22/23e Ebitda down 11/14%; ‘Sell’ retained with TP of Rs 5

Data usage grew 8.2% q-o-q to 4,489 bn MB as network quality improved.

SpiceJet: Maintain ‘hold’ with target price of Rs 85

Dedicated cargo initiative is commendable, but the cargo momentum can slow down with return of belly space. Driven by cargo business, SJet’s ancillary revenues grew from Rs 13 billion in FY20 to Rs 19.5 billion (estimated)

SJet has approved fund raise of up to Rs 25 billion through issue of eligible securities to qualified institutional buyers. If this happens through fresh equity, the shareholding of the current promoter will fall from 60% to 40%.

Maintain ‘hold’ on TEEC with revised TP of Rs 407

TEEC plans to enter the data centre market with an investment outlay of Rs7.5bn over the next 2 years – it expects 20% RoE from the same.

market

Maintain ‘add’ on Dr. Reddy’s Laboratories with target price of Rs 5,848

The target for reducing specific energy consumption was 31% and company could achieve 22% reduction. The share of renewable energy increased by 8.8% vs target of 16.2% and attained 72% water neutrality vs target of 100%.

DRL has launched Sputnik V vaccine in India which would provide significant upside to earnings in near term.

Reiterate ‘top buy’ on Info Edge as sharp recovery anticipated

Reiterate Info Edge as TOP BUY idea in our coverage. Impending IPOs of investee firms (Zomato & Policybazaar) should be key catalysts for value unlocking.

Bharat Electronics rating – Buy: FY21 performance impressed again

Order inflow at Rs 54 bn in Q4; TP up to Rs 177 from Rs 153; firm stands out among the listed defence PSUs; ‘Buy’ maintained

Analyst Corner – NMDC: Maintain ‘hold’ with revised TP of Rs 182 per share

Despite industry- wide disruption May’21 volumes for NMDC at 3.3mnte is commendable. Pricing and EBITDA/te though appears peakings.

CIL: Maintain ‘buy’ with target price of Rs 234

The stock is currently trading at 5.1x P/E and 2.7x EV/EBITDA on FY23E basis with 39% RoE.

Coal India

Reiterate ‘buy’ on HDFC Life, target price Rs 823

Increase in guaranteed rates and likely increase in interest rates ahead will make non-par portfolio more attractive. HDFC Life has increased rates in its guaranteed savings offering.

HDFC LIFE

NTPC Rating: buy: Operational numbers were strong in Q4

Dividend payout was high; added capacity aided rise in FY21 EPS; RE target has been doubled; ‘Buy’ rating retained with TP of Rs 165

Coal India rating – Buy: A good final quarter for the company

E-auction realisations up further; dividend stability to continue; FY22 will be lot better than FY21; ‘Buy’ retained with TP of Rs 234

CIL’s FY21 revenue/Ebitda/PAT improved significantly in H2FY21, but was still lower by 6.3%/15.3%/23.9% y-o-y at Rs 900/186/127 bn, respectively, due to the severity of H1FY21 earnings.

Tata Consumer Products: Retain ‘buy’ with TP of Rs 800

Working capital days was reduced to 39 in FY21 from 87 in FY20 — driving strong FCF generation. Starbucks is now present in 18 cities with 221 outlets.

Working capital days was reduced to 39 in FY21 from 87 in FY20 — driving strong FCF generation. Starbucks is now present in 18 cities with 221 outlets.

Interglobe Aviation rating – Buy: Strengthened balance sheet augurs well

Cash burn stood at Rs 190 m per day in Q4; cash reserves will allow firm to endure Covid impact; upgraded to ‘Buy’ with TP up to Rs 2,000

Even if there were to be a Covid impact in FY22 similar to FY21, IndiGo remains well placed in terms of cash on balance sheet.

Maintain ‘hold’ on Siemens; SOTP-based TP of Rs 2,156

Forex gains supported overall ebitda margin: During H1FY21, the company had Rs 500 million as forex gain vs Rs 900 million forex loss in H1FY20. Overall gains on exports due to merchandise from India Scheme (MEIS) had decreas

We maintain our ‘hold’ rating on the stock and arrive at an SoTP-based target price of `2,156 per share, implying 50x P/E to FY23E earnings.

Motherson Sumi Systems rating – Buy: Strong FCF sped up cut in debt in FY21

Q4 operating earnings in line with estimates; EPS for FY22/23e revised by -0.7/5.1%; TP up to Rs 310 from Rs 253; ‘Buy’ retained

PNB Housing Finance rating- Buy: Fund-raising to bring triggers in its wake

But growth & RoEs to soften in interim; upgraded to ‘Buy’ with TP going up to Rs 678

Strategically, business transformation is underway with new agenda to target mass retail housing, build the high-yield Unnati portfolio and drive efficiency through cost management.

Prefer BPCL among OMCs, keep TP unchanged at Rs 544

Consolidated recurring Q4 profit stood at Rs 58billion vs loss of Rs 3.6billion in Q4FY20; share of profit from JV/associates is up 66% YoY.

FY21 standalone and consolidated recurring EPS were up 4.2x and 3.9x YoY.

Analyst Corner: Maintain ‘buy’ on Thermax with target price of Rs 1,506

Current orderbook at Rs 52.2bn (1.1x TTM sales) implies improved visibility. Due to the second wave of covid, near-term outlook is uncertain; however, investment outlook is healthy in medium to long term.

thermax

Analyst Corner: BPCL preferred pick among OMCs; TP unchanged at Rs 544

Net margin is estimated at Rs1.48/l on 1-Jun’21 and Rs1.07/l on 16-Jun’21 at latest prices. Price hike or excise duty cut (not passed on) of Rs1.2-1.7/l is needed to boost net margin to Rs2.5/l.

Consolidated recurring Q4 profit stood at Rs 58bn vs loss of Rs 3.6bn in Q4FY20; share of profit from JV/associates is up 66% YoY.
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