Articles By Nomura

409 Articles

Voltas Rating ‘buy’; Prospects for Voltbek JV are bright

It could lead to Rs 298/share of value over 10 years; top pick in sector; ‘Buy’ retained

Analyst Corner: Ashok Leyland to gain due to higher-tonnage trucks

AL is a pure play on the CV cycle. It is also likely to benefit from its higher share in the >16T segment, as usually the mix shifts upward during upcycles.

Faster GDP growth would imply upside risk to our demand assumption.

Upgrade Dr Lal Pathlabs to ‘neutral’ with TP of Rs 2,155

We note that EBITDA contribution from Covid-19 tests was much higher than we had previously estimated due to high volumes and a drop in raw material costs.

Maintain ‘buy’ on Balkrishna Industries

India’s agri tyre export revenues rose 49% y-o-y in August (from 44% y-o-y in July). Construction/Mining (OTR) segment growth also accelerated to 19% y-o-y in August (from 8% y-o-y in July).

Analyst Corner: Colgate-Palmolive expects sales to be augmented

Trade channel, Colgate expects sales to be further augmented by some trade-channel filling that had reduced in 1Q; however, channel inventory is still below pre-pandemic levels

Colgate, Palmolive, Colgate sales, Naturals toothpaste category, Nielsen data, palmolive Personal care products

ONGC rating: Reduce – Lower other costs behind Ebitda beat

OVL’s oil production at 2.2mmt fell 5% q-o-q and 10% y-o-y, while gas production at 1.2bcm declined 6% q-o-q and 10% y-o-y. OVL reported a Q1 loss of Rs 3 bn due to lower production and subdued oil/gas prices.

Glenmark Pharma has key positives; TP at Rs 727

GNP’s domestic formulation business has outperformed the broader market in the past and we expect this trend to continue.

Glenmark Pharma, Glenmark Pharma R&D spending, Ichnos,  Covid-19 impacts, EBITDA

Lupin gets USFDA nod for gProAir HFA, launch likely in September

All three brands launched authorised generics in 2019. The USFDA also approved the first generic of ProAir in February (Perrigo’s ANDA) and Proventil in April (CIPLA’s ANDA).

The approval comes after Perrigo’s 180-day exclusivity period.

Bharat Petroleum rating: Buy — A strong showing by the company in Q1

Divestment a key catalyst; FY21/22e EPS up 70/12% on results and low base; TP raised to Rs 515; ‘Buy’ retained; preferred OMC

While refining was weak, we were more concerned over marketing.

KNR Construction rating: Maintain ‘neutral’ with lower target price of Rs 285

Management has highlighted receipts of Rs1.85 billion in payments from road projects in July. These collections will provide near-term relief on working capital build.

However, despite execution strength, our risk perception of the stock has increased leading to our cautious stance.

Analyst Corner – Berger Paints: Maintain ‘neutral’ with target price at Rs 540

Industrial business has been more affected vs other segments. Some recovery seen in two-wheelers and passenger vehicles; commercial vehicles continue to be challenged.

Demand returned to 90% of y-o-y level in May, and June saw double-digit volume and value growth with withdrawal of lockdown in most markets.

Gail rating: Reiterate ‘reduce’ as marketing losses raise concern

GAIL’s reported EBITDA of Rs 6.2 billion (-75% q-o-q, -72% y-o-y) was 55% / 62% below our /Bloomberg consensus estimates, driven by a very large loss in gas marketing.

Gail rating, EBITDA, LNG imports, Covid-19, LNG prices, market news

Hindustan Petroleum rating: ‘Neutral’; Q1FY21 performance was ahead of estimates

Near-term outlook weak; FY21/22e EPS up 71/31% due to lower tax rate; TP raised to Rs 215; ‘Neutral’ retained

With retail prices of petrol/diesel nearly at peak, OMCs’ ability to raise prices is getting incrementally difficult.

Analyst Corner: Maintain ‘reduce’ on Tata Motors with TP at Rs 96

Lack of EV success a key risk for JLR. Both JLR and India business may continue to struggle over next 2 years.

tata motors, automobile giant, jaguar land rover, jlr, stake sale

‘Buy’ on Apollo Hospitals; March ’21 Target Price at Rs 1,762

We expect APHS to trade at a premium to international peers, given superior longer-term growth prospects.

We consider pre IndAS 116 EBITDA forth is comparison.

Analyst Corner | Berger Paints: Expect high long-term volume growth

Berger Paints’ management is encouraged to see demand recovering faster than expected. Demand is being driven by tier-3/4 cities (less impacted by Covid-19) and is currently at near-normal levels.

Analyst Corner, Berger Paints, Covid-19 lockdown, cost inflation, berger paints sales

IPCA Laboratories: Target price increased to Rs 1,820

In consolidated financials, IPCA recorded Rs 276.4m as a one-time write-off related to the Pisgah subsidiary. Adjusted for the write-off, the subsidiary performance was largely stable.

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GAIL rating: Reduce — Impact of Covid on demand makes outlook bleak

Marketing may be hit most; FY21/22 EPS down 43-46%; downgraded to ‘Reduce’ with TP lowered to Rs 85

oil and gas company, US companies, dharmendra pradhan, oil minister

Britannia rating: Buy — Quarter performance came as positive surprise

April and May saw strong sales growth; FY20/21/22e PAT up 4/10/11%; ‘Buy’ retained with TP rising to Rs 4,000 from Rs 3,595

Motherson Sumi: Maintain ‘buy’ with lower target price of Rs 118

Overall, we cut our consolidated revenue estimates by ~8% and Ebitda by ~12% in FY22F.

Nestle India rating: Recommend ‘neutral’ with target price of Rs 17,250

We expect consumption of RTC foods to increase in a post-Covid world. Nestle’s products in this category — Maggi Noodles, Pazzta, Upma, Poha —could see significant demand growth.

Sun Pharma rating: Buy — Quarter results were in line with estimates

Higher than expected sales of specialty and improving traction in Ilumya were key positives; ‘Buy’ maintained with target price of Rs 525

Kotak Bank Rating: Neutral — A marginally positive performance in Q4

Company is best placed across metrics though current cycle will impact it; ‘Neutral’ maintained as valuations are rich

Kotak Mahindra Bank, has comfortably pipped all lenders in the world to become the most expensive bank stock, a crown which until recently belonged to none other than HDFC Bank.

Analysts Corner | IndusInd Bank rating ‘buy’; liability weakness comes to the fore

Deposit outflow post Yes Bank crisis a surprise; corrective steps raise hope; valuations offer comfort; ‘Buy’ retained.

GAIL – Rating: Buy; Valuations factor in the worst

Since the disappointing Integrated HVJ tariff order on 4-June-19, GAIL’s share price has de-rated significantly (-57% since end-May vs. NIFTY -23%).

GAIL, OIL, PSU, AGR case, Supreme Court, telecom firms, RailTel, Vodafone Idea, airtel, AGR liabilities, bharti airtel

Analyst corner: GAIL ‘buy’ rating maintained; Valuations factor in the worst

FY20e EPS down 3% and FY21/22e EPS cut by 33%; TP reduced to Rs 140 from Rs 190; ‘Buy’ maintained

Analyst Corner: Maintain ‘buy’ on KEC International, Target Price Rs 412

Maintain buy with TP raised to Rs 412, implying 18% upside in KEC’s 3QFY20 sales at Rs 30.7bn (+16% y-o-y), marginally (~2%) below our estimates but in line with consensus.

KEC, working capital, rail segment, indian railways, kec international
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