We recommend buying Aditya Birla Nuvo (ABNL) and maintain our positive view on the stock as it offers exposure to a number of quality businesses. We raise earnings estimates as well as target price on account of higher than expected dividends received in Q2FY15 and the strong performance during Q2FY15, especially from the fertiliser segment. We raise our FY15e earnings estimates by 6%, and broadly maintain our estimates for FY16/FY17. We raise target price to R2,150 from R2,100.
ABNL standalone revenue came in at R2,530 crore, ahead of UBS estimate of R2,400 crore primarily driven by better than expected fertilisers, VFY and garments segments. Reported ebitda stood at R350 crore versus our estimate of R290 crore, on account of better profitability in these segments, compensating for weaker than expected textiles performance. Net profit for the quarter came at R260 crore ahead of our forecast of R170 crore, driven by better than expected operating performance and higher other income on account of higher dividends received from BSLI and Idea. All segment except textiles reported better than expected performance in Q2FY15.
NBFC business recorded robust loan growth of 64% y-o-y led by corporate finance and mortgage segments. Asset quality was healthy with GNPLs/NNPLs declining from 1.25%/0.5% in Q1FY15 to 1.15%/0.37% in Q2FY15.
UBS