Jefferies
Materials (Steel) Gril/Heg ‘buy/buy’: Quarter results were strong
Earnings up 10-13% to factor in higher utilisation and rupee fall; GRIL/HEG TPs raised to Rs 1,450/5,500.
Gujarat Pipavav Port rating ‘Hold’: Average realisation took a hit in Q2FY19
Hopes of strong volume growth belied; sharp cut in EPS; downgraded to ‘Hold’ with TP cut to Rs 105.
PNB Housing Finance rating ‘hold’: PAT saw a miss, growth in disbursal moderated
ALM mismatch, higher CP mix likely to affect spreads; EPS growth to slow; ‘Hold’ retained owing to valuation.
Info Edge rating ‘Hold’: Revenue in line even as margins saw miss
Strong billing growth implies positive near-term outlook; ‘Hold’ retained due to expensive valuation
Analyst Corner: Maintain ‘buy’ on ABB with revised price target of Rs 1,700
ABB reported strong 31% YoY revenue growth in 3QCY18, in line with our expectations. However, pace of margin recovery has been slower than our expectations and led to the EBITDA miss.
Insurance H1: Why growth is slowing and margins are peaking
Our assessment of H1 results indicates (i) Moderating new business growth, (ii) Product mix shifting towards protection & away from par-savings, (iii) Margins peaking out, as delta from protection mix increase slowing down, (
Mahindra Finance rated ‘Buy’; Q2 Results were better than estimates
FY19-21e EPS up 1-9% given the positive outlook; Target Price revised to Rs 490; valuations are attractive
Analyst Corner: Maintain‘buy’ on SBI Life, price target Rs 681
The quarter was a mixed bag - (i) new business growth picked up, but driven by lower margin fund management business, (ii) VNB margins improved, but losses from PMJJY led to negative operating variance, (iii) cost ratios & pe
Hero Motocorp ‘Hold’: Q2 weaker margins offset revenue beat
Cause for caution given cost headwinds for 2Ws and structural growth concerns on Hero; TP cut to Rs 3,070
Wealth Report: India’s assets dominated by property and other real assets
Annual growth of wealth per adult averaged 8% over 2000–18. Prior to 2008, wealth also rose strongly, from $1,830 in 2000 to $5,020 in 2007. After falling 26% in 2008, it rebounded, and grew at an average rate of 7% up to 2
Analyst Corner: Upgrade HDFC to ‘buy’ with revised PT of Rs 2,030
We upgrade HDFC to ‘buy’ with revised PT of Rs 2,030 -- the stock has corrected 17% in a little over two months, although underlying growth/profitability remains strong and valuations are now fair.
Auto industry quarterly preview: Margins to be under pressure, commentary on festive season will be key
Volume growth has been divergent across segments and OEMs in Q2FY19e with Ashok Leyland, Bajaj and TVS expected to deliver 20%+ revenue growth and single-digit growth for others, partly on account of a delayed festive season.
Pharmaceuticals Q2FY19 preview: Quarter likely to see muted performance
We expect Dr Reddy’s Labs, Syngene, and NTCPH to report strongest earnings growth while Lupin sees the most decline.
Consumer sector: Price hikes and dip in promotions
The market saw more price hikes, with price increases in paints, toothpaste, hair oil and edible oil segments.
Reliance industries rated ‘underperformed’; Rosy outlook for retail bodes well
EPS goes up by 1-2%; TP raised to Rs 920; ‘U/P’ rating retained given likely EPS misses, rising net liabilities and rich valuations.
BHEL rating ‘underperform’: Revival efforts praiseworthy
Import content fell to a low in FY18; triggers of debtor monetisation and reduction in fixed costs needed for upside
Consumer sector growth to taper off in Q2FY19
Underlying demand trends are stable, however, some impact can come in due to Kerala floods, below normal monsoon and late festive season.
Engineering & Construction: Duty hike no dampener
Voltas/Blue Star has partly corrected in a weak market on fear of rise in compressor import duty. Branded AC players in India primarily import compressors from China.
Analyst Corner: Tata-Usha Martin: A small deal at reasonable valuation
Tata has signed an agreement to acquire Usha Martin's steel business for a cash consideration of Rs 4,300-4,700 crore.
Re-rating plays out for the Consumer Staple sector
The recent macro developments impact the sector's earnings and valuations negatively. We adjust our EPS and PEs to reflect this and roll over to Sep 20 EPS.
Analyst corner: Prefer NTPC, ‘hold’ on Power Grid with revised TP at Rs 210
Every five years CERC evaluates and finalises projects returns for regulated generation and transmission companies. FY20E-24E is the next five-year block.
Sun Pharma rated ‘hold’; specialty product execution is key
Form 483 with 6 observations for the Halol facility highlights risks in the business; ‘Hold’ maintained.
Large pharma companies can grow faster than industry average
India focus for pharma companies has increased with US challenges sustaining. Scale is important in India and we expect large players to gain though growth will be low double digit.
LIC Housing finance Rating ‘Hold’: Asset quality, core home loans slipped
Spreads should improve q-o-q, but sharp increase seems unlikely; FY19-20e EPS cut 1-2%; TP revised to Rs 590 from Rs 600
Indian Energy Exchange Rating ‘Buy’: 5MFY19 shows company to be a sweet spot
A good long-term portfolio holding that will offer steady returns; ‘Buy’ retained.
Retail: August was a month of clearance
M&A activity in the sector should continue, as better macros and share gains from unorganised players keep the growth trajectory strong.
IEX to benefit from rise in short-term traded volumes
Pricing and costs are stable with no incremental noise bytes from CERC on pricing. We believe IEX is in a sweet spot as it benefits from the rise in short-term traded volumes and market share gains from bilateral traders. The
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