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ICICI Securities

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JSW Energy Rating: Sell- RE biz may get re-rated on rise in auction rate

Green and grey businesses reorganised; TP revised to Rs 156; ‘Sell’ maintained

We estimate JSWEL’s FY24E/26e Ebitda at Rs 43.8/50.8 bn, of which contribution from green business will be >62%, as commissioning of 2,218MW solar and wind projects is expected to complete by FY24, and Kutehr HEP is expected to be commissioned by FY25.

Nuvoco Vistas Corp Rating: Buy-Rise in margins to lessen gap with peers

22% Ebitda CAGR estimated over FY21-24; initiated with ‘Buy’ rating and TP of Rs 645

We initiate coverage on the stock with a Buy rating and target price of Rs 645/share (11x Sep’23E EV/E). Key risks: lower demand/prices, and high concentration (~70%) in East region.

ONGC Rating – Buy: Delay in O&G output ramp-up the only concern

Q2 consolidated EPS up 64%; FY22-23e EPS raised by 24-8% given positives; valuation’s attractive; ‘Buy’ retained with TP of Rs 230

Thus, there is all-round good news except delay in oil & gas output ramp-up. Reiterate Buy.

Vodafone Idea: Net debt piles up to Rs 1,927 billion

Data usage grew 0.4% QoQ (27% YoY) to 5,517 billion MB. Mobile broadband sites rose by 3.4k to 450k while the total number of towers increased by 3k to 184k on reversal of a few cancelled sites.

Mobile broadband sites rose by 3.4k to 450k while the total number of towers increased by 3k to 184k on reversal of a few cancelled sites.

Analyst Corner| NHPC: Maintain ‘buy’ with revised DCF-based TP of Rs 45

NHPC has reported stable earnings in Q2FY22, with standalone reported revenue/EBITDA/ PAT at Rs 27.5billion/ Rs 18billion/ Rs 13billion, respectively, up 7.5%/14.2%/0.5% YoY, respectively.

NHPC

NHPC: Maintain ‘buy’ with revised DCF-based TP of Rs45

Major factors impacting the numbers were – 1) higher net generation at 9,912MUs (up 5.3% YoY), 2) reduction in employee cost by 10.9% YoY to Rs3.1billion, and 3) lower other income at Rs1.7billion (down 60% YoY) mainly due

Receivables remain steady at Rs34.3billion. Consolidated PAT increased 12.4% YoY to Rs13.4billion.

Britannia Industries rating – Reduce: Core business came up with decent show

Volume print weak; EPS for FY22-23e down ~9-6%; TP revised to Rs 3,400 from Rs 3,200; ‘Reduce’ retained

While there was benefit of price/mix growth, we believe grammage reduction in price-point packs would also have weighed on volume growth print.

Ujjivan Small Finance Bank rating – ‘Hold’: Collections improved to 95% by September

It carries total provision pool of 10%, including floating provision of Rs2.5billion and 34% coverage on restructured book. Maintain ‘hold’.

Notably, despite top-management attrition, Ujjivan’s journey towards building secured assets (32% of loans) and granular liability franchise (retail deposit share at 52%) is progressing well.

Analyst Corner – Indian Oil: Maintain ‘hold’, raise TP to Rs 137

Excluding inventory gain/loss, Q2 standalone EPS is up 6.9x YoY. Q2 consolidated EPS YoY growth was modest at 3% YoY despite surge in share of profit of JV/associates by 3.2x YoY due to 76% YoY fall in profit of subsidiary Ch

We have raised our core FY22E GRM estimate to $4/bbl from $3/bbl and factored-in H1 crude and product inventory gain of ~Rs92billion, including that of subsidiary CPCL.

Analyst Corner – DLF: Maintain ‘add’ with revised FY22 SoTP-based TP of Rs 434

Key risks to our rating are continued weakness in office leasing and slowdown in residential demand.

DLF’s net debt (ex-DCCDL) declined QoQ by Rs7.5 billion to Rs39.9 billion on the back of strong customer collections of Rs14.0 billion for the quarter vs. usual run-rate of Rs 6-8 billion.

Maintain ‘add’ on DLF with revised TP of ₹434

Key risks to our rating are continued weakness in office leasing and slowdown in residential demand.

Valuations: We maintain our ADD rating on DLF with a revised FY22 SoTP based target price of ₹434/s.

Analyst Corner: Maintain ‘add’ on CEAT with revised target price of ₹1,480

Growth momentum continues to be led by organic growth in CV and PV segments coupled with new PV order wins (e.g. Nissan Magnite, Renault Kiger, Mahindra Thar).

Reliance Industries Rating: buy: Quarter saw a rebound across segments

Surge in GRM and retail improvement has boosted outlook; FY22/23e EPS up 0.3-4%; TP raised by 24% to `2,510; ‘Hold’ retained

PNB Housing Fin: Downgrade to ‘sell’; revise TP to Rs 485

Preferential issue has been held up for more than four months (after already taking over two years), due to the pending legal proceeding before SAT.

Downgrade to ‘sell’ from ‘buy’. We cut our earnings estimate by >10%/>20% for FY22E/FY23E.

Piramal Enterprises: Maintain ‘hold’ with a revised SoTP-based target price of Rs 2,933

Shareholders of PEL will get 4 equity shares of PPL for every one equity share in PEL, in addition to their existing holding in PEL.

Pirmal Enterprises, non-convertible debuntures, private placement basis., Piramal group

Sobha rating – Hold: Volumes in Q2 the best ever for builder

TP up to Rs 774 from Rs 540; downgraded to ‘Hold’ given rise in price in last 3 months

We expect this momentum to continue into H2 and beyond and we model for 4.8/5.3/5.4msf of sales volumes in FY22/23/24e.

Dodla Dairy rating – Buy: Competitive advantages to push growth

Estimate of 17.6% PAT CAGR over FY21-23; initiated with ‘Buy’ and TP of Rs 700

Milk procurement in South India is growing at ~10% per annum. Dodla has expanded its market share from 0.6% in FY08 to ~1% in FY21.

Ujjivan SFB: Maintain ‘hold’, collection efficiency continues to trend well

GNPL increased to 11.9%, but PAR portfolio across buckets continued to reduce substantially. PAR 0 fell to 21.7% by Aug’21 (30.8% in June’21), a reduction of Rs7.25billion during Jul’21-Aug’21, primarily led by improv

PAR 1-30, PAR 31-60 and PAR 61-90 improved substantially to 5.1%, 3.1% and 1.5%, respectively, in Aug’21 vs 9.8%, 8.6% and 2.6%, respectively, in Jun’21.

Balkrishna Industries Rating ‘Add’; Industry export growth continued in August

Growth visibility is strong and return metrics are top-quartile; TP raised to Rs 2,837; ‘Add’ maintained

Analyst Corner: Downgrade IndiGo to ‘sell’ with revised TP of Rs 1,650

Our spreads include depreciation and interest cost. Entry of new players, delay in recovery of international travel, longer absence of high yielding corporate travel and low cash balance do not provide any rationale for incre

Short-term capacity cuts remain tactical measures.

Genus Power Infra rating – Buy: Smart meter drive boosts outlook for firm

Opportunity size is huge; coverage initiated with ‘Buy’ rating and TP of Rs 117

We initiate coverage with a Buy rating and TP of Rs 117.

Analyst Corner — Jindal Stainless: Maintain ‘buy’ with TP of Rs 230

Management pointed at its continued focus on deleveraging and guided for start of dividend payout as merger between JSL and Jindal Stainless (Hissar) (JSHL) concludes, likely in the near term. Maintain ‘buy’ with a target

JSL highlighted the potential flexibility it enjoys in production planning.

Sunteck Realty rating – Buy: Shahad project to add NAV of Rs 103/share

Deal cements firm position in MMR’s extended suburbs; TP raised to Rs 580 from Rs 475; ‘Buy’ rating maintained

Assuming development over FY24-35E, we estimate gross revenue of Rs 91.2 bn (SRIN share at Rs 72.6 bn) with pre-tax operating surplus of Rs 26.6 bn and NAV accretion of Rs 14.4 bn (Rs 103/share).

The Phoenix Mills rating – Buy: Capital position is a bulwark in hard times

30% rental income loss estimated in FY22; ‘Buy’ retained with TP of Rs 1,231

Firm expects retail rentals to revert to pre-Covid levels in H2FY22 assuming no third wave of Covid.

Asset Management Companies (AMCs): Strong possibility of EPS upgrades in FY22

FY22/23e EPS for UTI AMC up 14/20%; NAM, 14/12%; HDFC AMC, 4.7/2%; HDFC downgraded to ‘Hold’

We maintain BUY on UTI AMC and ADD on NAM while we downgrade HDFC AMC from Add to HOLD.

Downgrade Allcargo Logistics to ‘hold’ from ‘add’

The construction cost funded by AGLL continues to be repaid by way of refinancing through lease rental discounting facilities that are well served by the rental receipts.

Oil & Gas: High gas/LNG prices to help ONGC, OIL & GAIL

APM gas price surge to pose a challenge to Gujarat Gas, MGL and IGL as CNG price may need 49-53% hike

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