Motilal Oswal
Tata Chemicals: India business delivered revenue growth
Tata Chemicals Magadi (TCML) revenue was down 4% to $73.8 million on account of a 15% decline in volume, partly offset by a 13% improvement in realisation.
ICICI Prudential Life: Maintain ‘buy’ with TP of Rs 475
During FY19, ULIP APE fell 2.7% y-o-y v/s an average 18% growth over FY17-19. Protection business, though, has grown at 62% y-o-y and its share in the total APE improved to 9.3%.
Stock corner: ‘Buy’ Shriram Transport Finance, company saw momentum loss in FY19
After nearly doubling in FY18, slippages were largely stable YoY at Rs 66 bn in FY19. However, there has been a sharp increase in bad debt write-offs in FY19 – up 60% YoY to Rs 23.4 bn.
Delta Corp Rating | Buy — Flat showing in Q1 but the ship is stable
Consequently, revenue growth is likely to bounce back from Q2FY20, and we estimate 18% growth in the Casino biz in 9MFY20.
Titan: Maintain ‘buy’ with a target price of Rs 1,500
However, gold prices increased toward the second half, which, in our view, led to demand postponement, impacting segmental growth for the quarter.
Marico: ‘Buy’, TP at rs 435; growth momentum remains strong
Management had stated in its previous quarterly results conference call that new products are likely to double as a percentage of sales over the next two years.
Analyst corner: ‘Neutral’ on Bajaj Auto over expected BS VI turbulence
The company believes the domestic market will get more competitive across various segments, as it expects segmental quasi-monopolistic control to end.
Analyst corner: Asian Paints’ FY19 report shows pressure on RoCE
The rise in working capital led to a decline in earnings-to-cash flow conversion to 89% in FY19 from 99% in the previous year and kept OCF modest at Rs 2,210 crore (FY18: Rs 2,110 crore).
Axis Bank Rating | Buy — Execution of strategy will be vital to earnings
Digital initiatives at the bank are gaining traction, with 43% of its personal loans sourced digitally versus 22% in FY18.
ITC Rating: Uncertainty over earnings a dampener
Cigarette Ebit growth is a cause for concern given 23 months have passed since GST hike; ‘Neutral’ retained with TP of Rs 310
Analyst corner | Demand fundamentals for natural gas favourable
Global gas demand is expected to gr-ow at a rate of 1.6% a year until 2024.
SH Kelkar rating | Buy — Recovery is expected to be gradual
PAT estimates down 16%; ‘Buy’ rating reinstated with target price of Rs 169.
Analyst Corner: Maintain ‘neutral’ on GCPL, strong revival to take time
Balance sheet performance has been fairly good in recent years, particularly on the cash conversion cycle front, which declined from 47 days to 14 days in the past three years (on average basis) and from 60 days to 11 days on
Maintain ‘buy’ on HUL, target price Rs 2,070
With a contribution of 44%/47%/38% of incremental sales in FY17/18/19, Detergents continues playing a key role in driving HUVR’s overall growth (based onForm No. MGT-9 in the annual report).
Stock corner: ‘Neutral’ on HCL Technologies, a miss on margins even as revenue was strong
FY20e EPS down 4.4% due to lower margin guidance and extra costs; ‘Neutral’ retained with TP of Rs 1,200
Stock corner: Maintain ‘buy’ on Prism Johnson with a target price of Rs 104
Q4FY19 revenue increased 4% y-o-y (+17% q-o-q) to Rs 16.8b (v/s est. of Rs 16.5b). Cement volumes stood at 1.75mt (+5% y-o-y) implying 100% utilisation, while cement realisations increased 0.5% y-o-y, led by stronger prices i
Bharti Airtel Rating: Buy; results bucked downtrend of last several quarters
India wireless business made a strong comeback; outlook is favourable given multiple levers; ‘Buy’ retained with TP of Rs 410.
Stock corner: ‘Neutral on Kotak Mahindra Bank, stable showing across businesses in Q4
SA deposits continued growing strongly by 22% y-o-y (SA cost of 5.66%). Core deposit mix (CASA + TD < Rs 50 m) stood at 81% of total deposits. CASA mix improved to 52.5% (+180bp q-o-q) .
HDFC Life Rating | Buy — Performance in the quarter was stable
For FY19, total premium/PAT grew 23.8/13.1% y-o-y to Rs 289/12.5 bn. For FY19, the share of the protection business increased to 16.7% of total APE (7% on an individual APE basis).
Stock corner: ‘Buy’ on HDFC Life; return ratios to remain strong
We expect return ratios to remain strong on healthy new business margins, quality underwriting, and strong cost control.
Stock corner: ‘Buy’ on IPCA Laboratories; price target at Rs 1,145
The share of the Pain segment within DF has increased from 30% in FY12 to 45% at end-M9FY19.
Stock corner: ‘Buy’ Mahindra & Mahindra, challenges factored in due to valuation fall
Risk to estimate of Ebitda margin rising to 13.9% in FY20; re-rating catalysts are missing; ‘Buy’ maintained.
Titan Rating | Buy — Jewellery led high sales growth of 21% in FY19
Management’s expectation, in pre-quarterly update for Q4FY19 (and FY19), of further 20% sales growth in FY20 shows that all segments are doing well; ‘Buy’ retained.
Gujarat Gas Ratings | Buy — Outlook for volume growth is strong
NGT order for Morbi would be a catalyst if it stands; FY20/21 volume estimates raised; TP revised to Rs 183.
Stock corner: Resume ‘buy’ on Laurus Labs, target price of Rs 470
Laurus has completed the expansion for Lamivudine with its offtake expected to increase over the near term.
Ambuja Cement profitability hit by costlier raw material, fuel
Implementation of the Real Estate (Regulation and Development) Act (RERA), 2016, also brought about a paradigm shift in the construction sector, making it transparent.
Godrej Agrovert Rating| Buy — On way to becoming agri giant
The strength of the ‘Godrej’ brand and its association with trust, quality and reliability helps the company across segments, particularly in those involving direct sales to retail consumers.
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