Jefferies
Analyst corner | Pharma: Expect growth to remain below 10%
Pricing contribution remained steady at 5%, as did new product contribution at 2%. A majority of the corporates saw a y-o-y decline in volumes, as did 12 of the 20 therapies.
Analyst corner: Proposed 20% tax bane for IT companies using buybacks
In the Budget, the finance minister has announced a levy of 20% tax on buybacks effective immediately (5th July, 2019).
Stock corner: ‘Hold’ Whirlpool of India, risks remain despite good Q1 prospects
In terms of consumer usage, most appliance categories in India are under-penetrated, leaving notable headroom for growth. However, the competitive landscape in durables is characterised by high organised penetration (75%+).
Consumer diary: Demand was tepid in first quarter of FY20
Overall cautious stance on staples maintained, with ‘Buy’ rating on APNT, NEST DABUR and ITC
Energy: Yet another month of soft demand, refining remains a challenge for OMCs
Refining remains a challenge for OMCs; ONGC, PLNG and GAIL offer best prospects
Analyst corner | Maintain ‘buy’ on HDFC with price target of Rs 2,310
HDFC’s buying out Apollo's stake in Apollo Munich (fourth largest private health insurer) is expected to scale up its general insurance business, making it second largest private health insurer (post merger with HDFC ERGO).
Voltas Limited Rating: Buy; FY20 begins on a good note
Negative impact of weak Q1 and Q4 AC demand, Voltbek JV expenses and lower than expected engineering margins all hit Voltas in FY19.
Havells Rating | Buy — Steady quarter for the core business
Company poised for multi-year growth trajectory, justifying valuations; ‘Buy’ retained
ONGC Rating | Buy — Operational performance was resilient in Q4
FY19 consolidated EPS was up 38%, with high likely to be sustained in FY20e; TP raised to Rs 205; valuations are modest; ‘Buy’ retained
Cipla Rating | Hold — Quarter results were ahead of expectations
FY20/21e EPS up 5/3%; ‘Hold’ retained given mixed execution; TP raised to `535
Tech Mahindra Rating | Buy — A miss on revenue and margins in Q4
FY20-21 estimates cut slightly; maintenance of FY20e growth guidance is a positive; ‘Buy’ retained as risk-reward’s attractive
Indian Oil ratings | Hold — Ebitda was in line, net profit below par
Little respite likely in FY20 from flat earnings of last 3 years; ‘Hold’ retained due to undemanding valuations.
Bajaj Finance Ratings | Buy — A robust performance on all counts
Borrower leverage in some segments like salaried personal loan and professional loans saw 15-25% increase after 2-year of disbursal. Management said that the leverage is higher in the top 15 cities and reduces as they penetra
Stock corner: Buy HDFC share, lower NIMs came as a disappointment
NIMs lowered in line with FY18 & FY19 figures; need for caution on NBFC/HFCs though HDFC is shielded better; TP revised to Rs 2310
‘Buy’ Asian Paints, Q4 was a blip in growth trajectory
FY20/21e EPS down 7/3% owing to FY19 margin miss; TP cut to Rs 1575 from Rs 1620
Stock corner: ‘Buy’ Hindalco Industries shares, Aleris reported strong margins in the quarter
Aleris reported strong margins in the quarter; prospects are good for Novelis given a host of positives; ‘Buy’ retained.
Hindustan Unilever Rating | Hold — Q4 was broadly in line with estimates
While execution is better than for peers, headwinds make valuations rich; base business estimates down 3%; TP up to Rs 1,820.
Stock corner: Maintain ‘hold’ on Marico; price target of Rs 380
Parachute saw volume growth of 6% YoY in Q4FY19 on favourable base of 5% YoY dip. With price hikes coming into base, overall value growth was 4% YoY.
Stock corner: ‘Buy’ on Gujarat Gas with target price of Rs 185
Industrial volumes in 4QFY19 were down 6.8% q/q but came 1.6% ahead of JEFe while overall volumes declined 3% q/q coming 1.5% ahead of JEFe.
Stock corner: ‘Hold’ Britannia Industries, steady performance by the company
Standalone domestic business grew by 11.7% y-o-y led by 7% y-o-y volume growth in Q4FY19. Given the backdrop of slowdown in rural growth, we believe that growth trajectory is steady, also helped by market share gains, distrib
Hero Motocorp | Hold — Q4 showing was in line with estimates
Maestro/scooters is a worry as initial traction in Destini 125 could fizzle out post initial 6-9 months, as is often the case with new launches.
Stock corner: Jupiter, Ntorq drive TVS’ market share gain, target price at Rs 540
TVS has gained 3% market share in scooters in FY19 as both Jupiter and Ntorq have done well relative to most peers.
Stock corner: ‘Buy’ on India Energy Exchange, target price Rs 215
DAM+TAM (short-term market) accounts for ~85% of IEX’s revenues.
Analyst corner| Maintain ‘hold’ on Yes Bank and price target of Rs 265
With stressed asset resolutions taking time, though, the initial stages of a sweeping reset may well be disruptive, especially if fee income erodes and in the context of its thin capital ratios.
Analyst corner| Maintain ‘buy’ on SBI Life; price target at Rs 745
New business for Q4 grew 15% yoy, driven by ULIP (+21%) and protection (+176%). Par-savings business was down 19% yoy, as the focus of SBI shifted to cross-selling protection.
HDFC Bank Rating: Buy — Modest performance in last quarter
Agri NPLs will be key going forward; EPS down 7% owing to moderation in fee income and higher provisions; ‘Buy’ retained
Infosys Rating: Margin miss was key disappointment
Growth outlook remains positive; estimates cut to reflect lower margin over FY20-21; TP revised to `835; ‘Buy’ maintained.
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