Results were marginally ahead on growth, but materially ahead on margins. Growth was broad-based across verticals (ex. Healthcare) and geos (ex of EU) and guidance of 1-3% q-o-q (1% inorganic) was in line with expectations.
Steel capacity expansion in FY18-21F likely to be limited, which will likely saturate capacity in next three-four years, in our view. Already in FY19 we are seeing steel demand growing faster than GDP.
Over the past decade, L&T has experienced significant growth in its core E&C business’ working capital. Our analysis suggests that in the core E&C business, working capital has increased by Rs 148 billion for L&T over FY1
"We estimate that while the buyback will lead to a loss of other income of Rs 4.0 bn in FY19F we estimate ROE will improve by 100-150bp over FY19-21F, thus implying the buyback would be value accretive"
APHS’s Q1FY19 results are ahead of our estimates. Standalone sales and Ebitda were 6%/3% ahead of our estimates. Existing or old hospital standalone/consolidated revenue growth was 9.7%/8.8%, respectively.