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July 26, 2024 TOP NEWS Banks:
RBI has proposed to tighten banks LCR norms and has released draft
guidelines. The regulator has proposed to impose an additional run-off factor
of 5 per cent on both stable and less stable retail deposits that are enabled
with internet and mobile banking facilities. View: This could increase the
liquid reserve requirement across banks and would have marginal negative
impact on margins. Negative read through for banks. SJVN:
The company has received a huge order worth Rs 13,497 crore from the
Government of Mizoram to complete a pumped storage project. Positive KPI
Green: Company gets LoI from Gujarat Urja Vikas Nigam for 620 MW
grid-connected solar & hybrid RE projects. (Positive) Texmaco Rail and Engineering: The
Board approved the acquisition of Jindal Rail Infrastructure for an aggregate
consideration amount of Rs 615 crore and at 8.1x FY24 Ev/ebitda. RESULT PREVIEW
*Result
on 27 July
*Result
on 27 July STRONG RESULTS DLF: Pre-sales for Q1FY2025 were up 3x y-o-y and
4.4x q-o-q at Rs. 6404 crore and collections were up 88% y-o-y and 35% q-o-q
at Rs. 2968 crore. OCFs increased by Rs. 1047 crore q-o-q led to rise in net
cash balance by Rs. 1349 crore q-o-q to Rs. 2896 crore. It upped its FY2025
launch pipeline. MACRO WRAP
INVESTMENT CALL First
Cut: Tech Mahindra Q1FY25 Consolidated Results – Revenue and Margin
beats modest estimates, Net
New Deal wins improve. ·
Constant currency revenue grew 0.7%q-o-q to $ 1,559 million slight beating our estimate of $1,554, led by
Retail, Healthcare and Manufacturing. Reported revenue in USD was up 0.7%
q-o-q/ down 2.6% y-o-y while revenue in rupee terms stood at Rs. 13,006 crore, up 1% q-o-q/ down -1.2% y-o-y ·
EBIT margin
improved 112 bps q-o-q to 8.5%, beating our estimates of 8.2%, mainly due to
cost saving efforts under project Fortius and
continued focus on operational efficiencies. Net profit stood at Rs. 852 crore, down 12.2% q-o-q/ up 23% y-o-y missing our
estimates of Rs 894 crore impacted by higher tax rate. ·
Net
new deal TCV for the quarter stood at $534 million, up 7% q-o-q/49%
y-o-y. Company added 1 client each in $50 million+ and $ 5 million+ category.
Number of active clients fell by 7 q-o-q to 1165. ·
Retail, Healthcare and Manufacturing
grew 6.2%/7.7% and 2.4% q-o-q respectively while BFSI and Hitech & media
each grew 0.7% q-o-q. Core Communication vertical reported weakness down 2%
q-o-q while Others was down 6.9% q-o-q. ·
Net headcount improved by 2165, taking
Total headcount to 147,620. LTM Attrition and Utilisation remained unchanged
for the quarter. ·
We will come out with a detailed note
later. Result
Summary
Rs Crore
Actual Vs Estimates
Rs Crore
First Cut - DLF
Q1FY25 Consolidated Results – Strong performance; FY2025 launch pipeline upped ·
The company
registered strong pre-sales booking of Rs. 6404 crore
(up 3.1x y-o-y, up 4.4x q-o-q) for Q1FY2025 led by launch of second phase of
its luxury project in New Gurugram – Privana West,
which clocked Rs. 5600 crore pre-sales. Collections during Q1FY2025 were up
88% y-o-y (up 35% q-o-q) at Rs. 2968 crore. ·
DLF
reported lower than expected consolidated revenues at Rs. 1362 crore (down
4.3% y-o-y) and operating margins of 16.8% (down 11 ppts y-o-y). However,
consolidated adjusted net profit was up 22.5%
y-o-y at Rs. 645.6 crore (in-line with estimate) led by higher other income
(up 273% y-o-y at Rs. 367.5 crore). ·
The
company has increased launch area and sales potential for FY2025 to 12.8 msf (from 11.6 msf) and Rs.
42,000 crore (from Rs. 36,000 crore). Net cash
surplus increased by Rs. 1349 crore q-o-q to Rs. 2896 crore. OCFs increased
by Rs. 1047 crore q-o-q to Rs. 1349 crore. ·
Currently,
we have a positive view on the stock. We shall come out with a detailed update post management interaction. Results (Consolidated)
Rs cr.
Actual vs.
Estimates
Rs cr.
First cut: Chalet Hotels Q1FY2025 (Consolidated)
results – Operating performance in line · Chalet
Hotel’s revenue grew by 16.2% y-o-y to Rs. 361 crore,
largely in line with our and average street expectation of Rs. 350 crore and
Rs. 354 crore, respectively, driven by 15.4% y-o-y
growth in the hospitality business and 24.6% y-o-y growth in the annuity
business. Growth in the hospitality business was largely due to room
additions as key operating metrics – ADR, RevPar
and occupancy delivered muted growth of 1.3%, 2.5% and 50 bps y-o-y,
respectively due to impact of elections and extreme heat wave across the
country. · EBITDA
margin fell by 174 bps y-o-y to 38.8%; in line with
our expectation of 38.9% and higher than average street expectation of 37.6%.
EBITDA margin of the hospitality business improved by 75 bps y-o-y to 41.2%,
while annuity business EBITDA margin fell sharply by 532 bps y-o-y to 74.3%. · EBITDA
grew by 11.2% y-o-y to Rs. 140 crore. This coupled
with higher other income and lower interest cost led to 43% y-o-y growth in
the adjusted PAT to Rs. 61 crore. PAT came in higher
than our expectation of Rs. 41 crore and in line with average street
expectation of Rs. 62 crore. · View:
Overall, Chalet’s Q1FY2025 operating performance was in line with our
expectations. Proceeds from QIP in April-24 were largely utilised to repay
debt, resulting in net debt lowering to Rs. 1,532 crore
at Q1FY2025-end versus Rs. 2,509 crore at
FY2024-end. We will review our earnings estimates and come out with a
detailed report post the conference call. Currently we have Positive view on
the stock. Results (Consolidated)
Rs. crore
Actual vs
estimates
Rs. crore
First Cut – MGL Limited Q1FY2025 Consolidated Results ·
Revenue reached Rs. 1868 crores, reflecting
an 8% year-over-year increase and a 3% quarter-over-quarter rise, exceeding
our estimates by 20%. ·
EBITDA was Rs. 472 crores, which is a
16% decrease year-over-year but an 8% increase quarter-over-quarter,
surpassing our estimates by 30%. ·
Total volume for the quarter reached
343.91 SCM million, representing a 1.8% increase. CNG volumes saw a slight
rise of 0.2%, reaching 242.57 SCM million. ·
Piped Natural Gas (PNG) volumes
experienced a significant rise of 6.1%, reaching 101.34 SCM million. Results (Consolidated)
Actuals Vs Estimates
Stock Update: ICICI Pru
Life Insurance – Q1FY25 Results update: Mixed bag Q1, outlook improving Rating:
Buy Reco Price: Rs.
701 Target price: Rs. 800 ·
ICICI Prudential reported a ~34% y-o-y
growth in APE, albeit on a lower base led by strong growth across its
distribution channels. VNB margins stood at 24% vs estimates of 24.5% and 30%
y-o-y. ·
VNB margins lagged on an adverse product
mix and higher expense ratio . VNB grew by 8% y-o-y
to Rs. 472 crore. ·
Management expects APE growth to outpace
industry led by sustained strong growth across its distribution channels,
while VNB growth would depend upon product mix and expense ratio. ·
We maintain a Buy with a revised PT of
Rs. 800 by increasing the multiple, given growth outlook improving. The
trades at 2.1x/1.8x its FY2025E/FY2026E EVPS Valuation
Table
Rs. crore
Result Snapshot (Consolidated) (Rs.
Cr)
Actuals vs estimates (Rs.
Crore)
Stock Update: AU Small Finance Bank – Q1FY25 Results
- Downside risk keeps us on sidelines, maintain HOLD Rating:
Hold Reco Price: Rs.
631 Target price: Rs. 700 ·
The merged entity reported healthy operational
performance (better than estimates), driven by higher than-expected NIM
expansion and lower opex growth. However, credit
cost was higher than the guided range. ·
Asset-quality trends saw normalisation
q-o-q vs. the proforma basis. RoA for the merged
entity came in at ~1.6%. ·
We believe there could be downside risk
in profitability or growth, given the outlook on margins and cost is negative
in the near term and retail deposit mobilisation remains a tall task in the
current challenging environment. Either growth would be lower
or profitability will be challenged. ·
Additionally, if stress build-up is
higher than expected in the MFI/credit cards business going ahead, credit
cost may also inch higher but the probability is low
here. Thus, the uncertain outlook keeps us on the sidelines. We maintain our
HOLD rating on AU SFB with an unchanged PT of Rs. 700. The stock trades at
2.5x/2.2x its FY2025E/FY2026E BV estimates. Valuation
Table
Rs. Crore
Result Snapshot (Rs. cr)
Actual vs Estimates (Rs. cr)
Stock Update: Coforge
Q1FY25 Results – Decent Quarter, Maintain Hold Rating: Hold Reco Price: Rs
6,335 Price Target: Rs 6,650 ·
Reported
revenue stood at $291.4 million, up 1.6% q-o-q/7.8% y-o-y in constant
currency terms, beating our estimates of $290.8 million ·
Order
book executable over next 12 months stood at $1,070 million, up 19.3% y-o-y
provides confidence on FY25 growth. ·
The
acquisition of Cigniti is anticipated to enhance Coforge’s presence US, bring in new logos, and create
additional cross-selling opportunities ·
We
believe the revenue synergies would be crucial due to the potential risk to
functional testing services from Gen AI, prompting us to be cautious
regarding Cigniti’s revenue and margin trajectory
until clarity emerges post the transition. We maintain Hold with a revised PT
of Rs 6,650 (valuing at 32xFY26E EPS). At CMP, the stock trades at 37.7/30.5x
its FY25/26E EPS Valuation (Consolidated) Rs
Crore
Result
Summary
Rs Crore
Actual Vs Estimates
Rs Crore
Stock Update: Mahindra & Mahindra Financial
Services Limited Q1FY25 results– Weak Q1 Rating:
Buy Reco Price: Rs.
298 Target price: Rs. 345 · Earnings were broadly in line mainly led by higher
other income and lower credit cost. However,
operational performance was weak led by higher NIMs compression and muted
business momentum. · Credit cost was lower despite an increase in GS2 as
well as GS3 assets mainly due to reversal of ECL provisions driven by lower
LGDs and PDs assumptions. · NIMs were down by 36bps q-o-q as yields were lower
due to interest income reversals and mix change. · Recovery in business momentum and asset quality is
key for stock performance. The stock trades at 1.8x/ 1.6x its FY2024E/FY2025E
BV estimates, respectively. We maintain Buy with an unchanged PT of Rs. 345.
Stock update: Welspun Living
Q1FY2025 (Consolidated) result update – Brighter times ahead Rating:
Buy
Reco. Price: Rs. 177
Price
Target: Rs. 211 ·
Welspun Living Ltd’s
(WLL’s) Q1FY2025 numbers met expectations with revenue/PAT growing by 16%/14%
y-o-y, respectively; EBITDA margins stood at 13.5%. ·
Management is positive on demand outlook
in the coming quarters and has maintained revenue guidance at 12% for FY2025
and for EBITDA margins at 15-15.5%. ·
The board has approved a buyback of Rs.
278 crore at Rs. 220 per share; capex for FY2025 is
expected to be Rs. 860 crore (Rs. 300-400 crore in
FY2026). Net debt to remain stable y-o-y in FY2025. ·
We maintain a Buy with a revised PT of
Rs. 211. Stock trades at 23x/19x its FY2025E/26E earnings, respectively. Valuation
(Consolidated)
Rs. crore
Results
(Consolidated)
Rs. crore
Actual
vs
estimates
Rs. crore
Stock update: Jyothy Labs Q1FY2025 (Consolidated) result update –
Strong Q1 with double digit volume growth Rating:
Buy
Reco. Price: Rs. 547
Price
Target: Rs. 655 ·
Jyothy Labs
Limited’s (JLL’s) Q1FY2025 operating performance was in line with our
expectation with revenues growing by 8% (versus expectation of 8.5%) while
OPM stood at 18% (versus expectation of 17.9%). ·
Domestic volume grew by 10.8%, outpacing
industry growth. Management targets double-digit revenue growth in FY2025,
largely driven by volumes with improved market share across categories and
higher growth in modern trade and e-Commerce channels. ·
JLL eyes OPM of over 16-17%. Any
improvement in the product mix and efficiencies might help to score better
margins ahead of aspiration. ·
Stock trades at 49x/42x its
FY2025E/FY2026E EPS, respectively. With JLL being a consistent performer in
the mid-cap space and good earnings visibility, we maintain a Buy with a
revised PT of Rs. 655. Valuation
(Consolidated)
Rs. crore
Results
(Consolidated)
Rs. crore
Actual
vs
estimates
Rs. crore
Stock Update: Mahindra Lifespace
Developers Q1FY2025 Results Review: Strong start to FY25; Retain Buy Rating:
Buy Reco Price:
Rs604 PT: Rs785
Valuation (Consolidated)
(Rs.
Crore)
Results (Consolidated)
Rs cr.
Actual Vs
Estimates
Rs cr.
Stock Update: Mahindra Logistics Q1FY2025 Results
Review: Operationally in-line Q1; Retain BUY Rating:
Buy Reco Price:
Rs519 PT: Rs632
Valuation (Consolidated)
(Rs.
Crore)
Results (Consolidated)
Rs cr.
Actual Vs
Estimates
Rs cr.
Viewpoint: Heritage Foods
Q1FY2025 (Consolidated) result update – Margins make Q1 shine View:
Positive
Reco. Price: Rs. 603
Potential
upside: Rs. 20% ·
Heritage Foods Ltd’s
(HFL’s) Q1FY2025 numbers beat expectations on strong margin performance with
PAT growing by 3.3x to Rs. 60 crore, and OPM
improving by 472 bps y-o-y to 9.1% driven by moderated dairy prices. ·
The company targets high-teens revenue
growth driven by double digit volume growth of 12-13% and realisation growth
of 5-6% over FY24-28. ·
Expects OPM to remain at ~8% in FY25.
Increase in contribution of VAP and operating efficiencies will drive margins
in medium to long run. ·
Stock has corrected by 17% from its
recent high and trades at 29x/22x its FY2025E/26E earnings, respectively. We
stay positive on the stock with an upside of 20% in 12 months. Valuation
(Consolidated)
Rs. crore
Results
(Consolidated)
Rs. crore
Actual
vs
estimates
Rs. crore
OTHER NEWS Liquor: Andhra Pradesh will resume
procurement of liquor from top brands and will announce a new liquor policy
soon. According to reports, the state will replace local brands with popular
companies and will buy liquor from United Spirits, Radico
Khaitan and Globus Spirits. Allied Blenders & Distillers has strong
presence in the neighbouring state -Telengana (30%
of its overall revenues). Andhra Pradesh is a large market with 35 million
cases of liquor consumption – Positive for liquor companies; more details
will emerge once the state declares the policy. Hero
MotoCorp (HMCL) : HMCL had filed an appeal against
an income tax order demanding an amount of Rs. 2,336.71 crore for the
assessment Year 2011-12.The ITAT while hearing the
appeal of the company pronounced an order in favour
of HMCL. Consequent to the above, the entire demand of Rs.2,336.71
crore has been quashed. Vedanta:
S&P upgrades rating of Vedanta Resources to 'B' from 'CCC+' on improving
capital structure and liquidity. (Positive) ·
Coal india:
According to the Power Ministry, coal based power
capacity needs investment of Rs 6.67 lakh cr to
meet demand by 2032. Positive for the company. |
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