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Nomura

Articles By Nomura

446 Articles

Maintain ‘buy’ on M&M as our top pick in the sector

We estimate the carrying value of SYMC on M&M books to be ~Rs 12.6 billion, thus a write-off of this amount may also need to be taken in case SYMC files for bankruptcy and the stake sale does not take place. But this will not

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Analyst Corner: Maintain ‘buy’ on Adani Ports with target price of Rs 530

ADSEZ has turned around its Krishnapatnam (KPCL) acquisition significantly ahead of our previous estimates, leading to earnings upgrade: ADSEZ has turned around the operations more efficiently than anticipated.

Based on the strong turnaround of new acquisitions (KPCL and Dhamra) and volume momentum, we continue to be positive.

Asian Paints rating- Buy: Robust demand trends have continued in Q3

Company should gain share in bottom-of-pyramid segment; could emerge stronger after Covid-19; ‘Buy’ rating maintained

Shree Cement rating – ‘Buy’: Robust second quarter for the company

New capacities to drive growth; EPS raised by 36% for FY21e and 13-15% for FY22-23e; upgraded to Buy with TP up to Rs 27,500

Analyst corner: Maintain ‘neutral’ on Exide Industries, raise TP to Rs 193

While current lead cost, at ~Rs 140k/kg, is largely similar to last year’s average level, product mix is likely to worsen, with a higher mix of OEs. Hence, gross margins might come under pressure, in our view.

In our view, EXID has likely lost share in the auto replacement segment, with single-digit volume growth in Q2.

IndusInd Bank Rating ‘Buy’; Q2 results were in line with estimates

Bank is heading in the right direction; valuations are inexpensive; ‘Buy’ retained with TP rising to Rs 725

Also, 8-9% q-o-q deposit/CASA growth, lower IB fees are aiding granularisation of the business model.

ICICI Bank Rating: Buy-Excellent performance by the company

Rebound in fees offset NIM dip; collection trends encouraging; FY21-23e EPS up 10-20%; TP raised to Rs 525; top pick in sector

Retail collections improved meaningfully to 96-97% of pre-COVID levels.

Maintain ‘buy’ on Bandhan Bank with TP of Rs 375

Collection trends in micro-banking portfolio have considerably improved since the moratorium ended, recovering to 91% in Oct (95% by number of customers) but still lagging other segments (96-98% collection efficiency in mortg

Reliance Industries Rating ‘buy’; second quarter results were a mixed bag

While refining was much below expectations, other segments were above par; net debt down sharply in H1FY21; ‘Buy’ maintained

Ultratech Cement Rating: Buy; Robust performance in second quarter

Demand has recovered sharply; earnings growth of 40% expected in FY21; TP raised to Rs 6,100 from Rs 5,100; top pick in sector

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

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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.

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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.

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‘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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