Analyst Corner: Retain ‘sell’ on DMart with revised FV of Rs 1,475
Dmart reported 12.3% yoy decline in 2QFY21 largely on account of slow recovery in footfalls, partial store shutdowns due to local lockdowns and sluggish sales in general merchandise and apparel category.
Kotak Securities maintains ‘buy’ on Federal Bank with unchanged fair value of Rs 80
Federal Bank reported ~25% YoY earnings decline mainly driven by high provisions with most of the provisions used to improve coverage ratio and build contingent provisions for Covid.
Wipro Rating ‘Add’; A good performance in second quarter
Q3 guidance a positive surprise; FY21-23e EPS up 6-11% with TP rising to Rs 380; upside is modest after rally; ‘Add’ retained
Sobha showing resilience in pandemic; maintain ‘buy’
Blended realisation for the quarter increased 17.5% yoy to Rs 7,737 per sq. ft (Rs 7,494 per sq. ft in 1QFY21) reflective of change in sales mix across cities.
Analyst Corner: Maintain ‘reduce’ on TCS as stock valuations are punchy
Buyback through the tender route is essentially an alternative form of dividend distribution; hence the discussion on EPS dilution due to buyback is not relevant.
Downgrade Eicher Motors to ‘sell’ with Fair Value of Rs 1,920
We would like to highlight that the mid-size motorcycle segment has outperformed the commuter motorcycle segment in these geographies over CY2012-19, which bodes well for RE.
Analyst Corner: Retain ‘constructive’ view on L&T Infotech, demand recovery healthy
LTI’s CEO indicated that the number and quality of conversations with clients have increased in the past few months, suggesting meaningful demand recovery.
Analyst Corner: ‘Add’ on Mindspace REIT with FV of Rs 330/share
NOI of the portfolio will likely grow at 15% CAGR between FY2020 and FY2023E to Rs 17 billion.
Maintain ‘buy’ on ITC with unchanged FV at Rs 260
FY2020 Ebitda growth print (+4% y-o-y) was impacted by higher taxation and Covid outbreak. FCF grew 30% to Rs 117 billion led by reduction in W-cap and tax rate cut
Analyst Corner| Retain ‘buy’ on Hindalco with fair value of Rs 285
Scrap spreads play a significant role in Novelis’ margins as scrap forms 60% of its raw material.
HCL Tech FV raised to Rs 900 on mega deal wins in core its areas
Separately, we move HCLT’s valuation to SoTP to capture differing growth dynamics of products and services businesses
Analyst Corner: Retain ‘sell’ on Dmart, revise DCV-based FV to Rs 1,530, says Kotak Institutional Equities
Due to higher competition its price gap versus competitors has shrunk, and in September, Dmart was the lowest priced retailer for only seven products.
‘Buy’ on Bharti Airtel; firm needs a positive trigger
Little movement on the expected floor tariff regulation — Trai hasn’t conducted the requisite open house discussion yet; has reservations doing it online — has only added to the anxiety on pricing.
Analyst Corner: Upgrade InterGlobe to ‘Buy’ from ‘Sell’ with FV of Rs 1520
The past few years have seen the sector and the market leader making losses due to the twin impact of higher fuel prices and eagerness of airlines to increase their network coverage to explore new growth opportunities.
Maintain ‘buy’ on Coal India with fair value of Rs 195
Improvement in eauction premiums as well as a more healthy 9.6% yoy growth in dispatches in August 2020, lend hope for an improved earnings profile from hereon.
Retain ‘buy’ on TechM due to reasonable growth potential
TechM’s telecom vertical has grown at a modest pace in the past 4-5 years.
Indraprastha Gas rating ‘sell’; Results in Q1 FY21 were below par
Volumes plunged amidst lockdown; FY21e EPS down 10% due to slower recovery and lower margins; ‘Sell’ retained.
Buy IRB Infrastructure with unchanged FV of Rs 150
Order inflow revival is critical for maintaining EPC revenues. The company has sufficient liquidity to meet near-term requirements. Revise estimates by 1%/3% and retain fair value of Rs 150. Buy.
PNB rating: Reinstate ‘reduce’ with a fair value of Rs 33
We reinstate coverage on the stock with a ‘reduce’ rating and Rs 33 fair value, as we think SBI (buy) and BoB (add) offer better margins of safety within PSU banks.
Petronet LNG rating: ‘Buy’; Q1FY21 results were modestly above estimates
Healthy earnings CAGR of 10-11% expected over the next 3-5 years; estimates fine-tuned; valuations are attractive; ‘Buy’ retained
HCG rating: Maintain ‘buy’; revise fair value to Rs 150
HCG had announced an issuance of preferential shares and warrants to CVC Capital at Rs130/share, resulting in CVC acquiring 36.5% stake and infusion of Rs6.5 billion in the company.
Tata Power rating: Maintain ‘buy’ with revised fair value of Rs 70
Tata Power laid out its five year target to double its revenues (Rs 289 bn in FY2020) and triple its profits (Rs 12 bn in FY2020), while nearly halving its debt to Rs 250 bn (from Rs 436 bn as of March 2020).
Adani Ports rating: Buy – Growing heft on display in Q1
It reflects the impact of a 2.5% constant currency realisation increase APSEZ was still able to take in the quarter. We also note that the sharp volume decline was led by coal and crude, verticals impacted the most by Covid-1
Analyst Corner| Maintain ‘buy’ on Hindustan Zinc with fair value of Rs 290
We revise earnings factoring the recent price buoyancy and increase Fair Value to Rs 290 (from Rs 225) with a revised SOTP based valuation. Maintain ‘buy’.
Mahindra and Mahindra rating: Buy — Auto business weakness hit performance
Tractor demand expected to be good; tighter capital allocation could lead to a re-rating; FY22-23e EPS down 1-2%; ‘Buy’ retained.
IOCL Rating: ‘Buy’; Strong underlying showing in Q1FY21
Elevated marketing margins to offset refining weakness; FY21-22e EPS cut by 2%; ‘Buy’ retained with TP of Rs 110.
Retain ‘add’ on Embassy Office Parks REIT with fair value of Rs 400/share
Embassy was able to achieve 14% contractual escalations on 1.8 million sq. ft along with leasing of 0.5 million sq. ft with a spread of ~20% in 1QFY21 on re-lease/ renewals.
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