Kotak Institutional Equities
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Vardhman Textiles: Kotak Institutional Equities rates ‘add’, results largely in line with estimates
Robust margins offset weak volumes; multiple factors to drive strong growth in earnings; FY19e EPS reduced 6%; retain ‘Add’
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Lupin Rating: Final quarter a mixed bag for company
Lower margin assumptions behind 7/3% cut in EPS for FY19-20e; TP down to Rs 800.
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Automobile industry looks poised for robust growth
April 2018 was a strong month for the domestic automotive industry with robust volume growth across all segments. However, we note that growth has come off a relatively low base, particularly in the MHCV industry; therefore it should not be extrapolated going ahead.
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Bharat Financial Inclusion rating ‘neutral’; Kotak Institutional Equities says healthy growth mixed expectations
Though high at 38% yoy, loans grew 7% below estimates; near-term growth estimates cut
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DCB Bank: Kotak Institutional Equities rates it ‘Add’, says Q4 saw recovery from slowdown
Broad trends were stable; RoE trajectory moving towards 13-15% in medium term; the outlook on NIM remains negative
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Metals and Mining: Outlook to improve strongly over 2 years
There are not many large aluminum projects to be commissioned outside China over the next 2-3 years.
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Grasim Industries on a strong growth trajectory, Kotak Institutional Equities rates its ‘add’
Grasim expects both legs of its standalone operations — vsf and chemicals — to see strong volume growth led by improved underlying demand and expanded capacities.
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Kotak Institutional Equities rates Maruti Suzuki as ‘add’, says recent launches to keep momentum going
Weak launch pipeline for competitors in next two years likely to work in company’s favour; FY18e EPS down 3% even as TP is revised to Rs 10,000 from Rs 10,500.
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Kotak Instituional Equities rates SBI ‘buy’, says subsidiaries are in good health
While most of these businesses are strong on growth and/or profitability, the key concern is on the parent where the scope for valuation expansion is the highest.
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Gujarat Gas buy to dent earnings
FY18e EPS up 2% to factor in higher transmission volumes; TP revised to Rs180
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Interglobe Aviation: Kotak Institutional Equities rates IndiGo’s parent company ‘buy’, says demand suited to fleet expansion
While the grounding of additional A320neo planes is a negative, it is unlikely to lead to material operational disruption; TP unchanged at Rs 1,500.
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Mahindra Logistics Rating: Readying for an uptick in business
MLL’s focus on deepening working relationships with clients and business associates would help it outperform the fast-growing 3PL market. The market is yet to see the benefits of consolidation of warehouses (GST) and formalisation of logistics (e-way bill).
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Aurobindo Pharma Rating: 483 no cause for alarm
Our analysis of Aurobindo’s Unit-IV 483 indicates that the observations can be viewed as ‘low to moderate’ in criticality and we believe these can be addressed by Aurobindo without major remediation.
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Feb dispatches reflect moderating trend
Production disappointed with 0.3% y-o-y growth; realisations likely to improve on the back of increase in notified prices.
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Exit of challenger telecos fails to yield gains, says Kotak Institutional Equities
TRAI’s revenue report for Q3FY18 revealed a sharp q-o-q fall in consumer spends in sector despite Jio taking price hike in quarter.
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Nasscom sees modest rise in FY19 technology growth
Demand improvement is less than the Street’s expectations; stocks with low growth acceleration built into prices are preferable.
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Reiterate ‘sell’ on Timken India with TP at Rs 660
Timken reported 3QFY18 EBITDA of Rs 207 million (down 13% y-o-y), which was 64% below our estimates due to (1) lower-than-expected revenue growth and (2) 700 bps sequential deterioration in gross margin.
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One-offs play a part in below par showing
FY18e EPS down 23% due to Q3 results; FY19-20e EPS cut 8-10%; TP revised to Rs 660
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Strong growth in standalone earnings
Grasim industries reported steady earnings print with strong improvement in standalone earnings (VSF, chemicals) partially offset by weakness seen in cement operations (due to weak realisations).
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Max Life stock rated Buy by Kotak with Rs 700 TP
We continue to believe in the value of its franchise and find the stock attractive at these levels.
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Eicher Motors Q3 saw a strong performance
Growth could slow down in FY19; ‘Sell’ rating stays on expensive valuations; TP up to `24,000 due to rollover to March, 2020.
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Gross margins drive a miss in the quarter
LPC’s Q3Fy18 revenues were in line with our estimates, with the US showing stable signs. However, gross margins contracted 240 bps further , leading to a ~5% Ebitda miss (adjusting for forex loss) and 18% PAT miss, despite tight cost control.
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Decent showing though Q4 target on Ebitda margin is overoptimistic
The company expects to achieve double-digit Ebitda margin in Q4FY18, which appears difficult due to rise in commodity prices and increase in marketing expenditure. Maintain Sell on expensive valuations; target price revised to Rs 410 (from Rs 400) on rollover to March 2020e.
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Sobha Developers stock rating: ‘Reduce’, says Kotak as pre-sale momentum continues to strengthen
Sales from luxury/super-luxury projects contributed more, reflecting in high blended realisations of Rs 8,045 /sq. ft. Two projects were launched during the quarter, one of which was added in 3QFY18.
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Digital assistants – Losing face: Sometimes, computer programs seem too human for their own good
Hindalco’s bid to acquire Aleris Corp (as per unauthenticated media reports) indicates its preference to invest in the downstream value-added rolled product business given poor returns in the upstream aluminum smelting operations.
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Zee Entertainment enterprises gets add rating by Kotak Institutional Equities
We expect Zee to deliver strong 20%+ organic growth in domestic ad revenues in 2H led by an improving ad environment and viewership share gains of Zee TV.
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Data drive: Private banks gain share in CASA
The overall deposits in banks grew 11% year-on-year (y-o-y) in FY17, driven largely by current account and savings deposits after demonetisation.
