Q3FY19 Quarterly Preview IT Services
|
|
- Buck Stevenson
- 5 years ago
- Views:
Transcription
1 Q3FY19 Quarterly Preview IT Services Head of Equities: Amit Khurana, CFA Associate: Vinesh Vala Tel: Tel: January 04, 2019
2 January 04,
3 Quarterly Preview IT Services - Q3FY19 Result Preview Seasonally weak quarter led by furloughs and holidays We expect Q3FY19 to be a seasonally weak quarter for all Indian IT vendors, due to lower working days and furloughs. There should be a marginal improvement in operating margin for IT vendors, given the positive impact of 2.7% QoQ depreciation of the rupee against the USD. However, lower working days, a reduction in utilization, and rise in investments for digital transformation are likely to affect margins. We believe large Indian IT vendors are likely to report USD revenue growth in the range of 1% to +2.5% QoQ. Tech Mahindra (TECM) and HCL Technologies (HCLT) are likely to lead the USD revenue growth trajectory, while Wipro (WPRO) will lag peers. We expect earnings to rise 8.7%/4.6%/ 4.2%/ 3.6%/ 1.5% QoQ for Tech Mahindra (TECM), Tata Consultancy Service (TCS) / HCL Technologies (HCLT)/ Wipro (WPRO)/ Infosys (INFY), respectively. Among the midcap IT universe, we expect Persistent to report robust USD revenue growth of 5% QoQ since Q2FY19 was low base on account of one project closure while NIIT Tech would report muted USD revenue growth of 1% QoQ due to high base of Q2FY19 on back of ramp up in Insurance & Travel vertical. We are waiting for management expectations on demand conditions, growth in digital, deal inflow, and adoption of digital services across verticals. Tech Mahindra is slated to share its outlook on the telecom & enterprise business and HCLT about the seven product acquired from IBM and IMS business. Negative impact of cross currency to dent revenue growth The USD appreciation against all major global currencies (EURO by 2.5%, GBP 1.8% and AUD 1.8%) will have a negative impact of 50-70bps on USD revenue of Indian IT companies. We believe the 2.7% QoQ weakening of rupee against the USD will increase rupee revenue growth and improve margin by 40-60bps for our coverage universe in Q3FY19. Lower utilization and working days barrier to margin We expect a marginal improvement in the EBIT margin of most of the Indian IT vendors, on account of rupee depreciation and absence of visa cost. We believe headwinds explained above, such as fewer working days, cross currency impact, lower utilization, localization, and investment in digital will restrict margin improvement in the quarter. Higher investments for developing digital capabilities and investment in Sales & Marketing are likely to affect margin in all Indian IT vendors in the short to medium term. Among large cap companies, positive impact on EBIT margin due to the rupee depreciation and operational efficiencies are as follows: WPRO (+44bps), TECHM (+26bps), TCS (+19bps) and HCLT (+11bps). We expect INFY to report decline of 19bps in its EBIT margin during the quarter due to higher investment in enhancing digital capabilities. The EBIT margin of all the midtier IT companies, except KPIT (-18bps QoQ due to decline IES business) and Mphasis (-62bps QoQ due to wage hike impact), are expected to improve marginally in the range of 12-28bps QoQ. INFY and HCLT likely to maintain revenue guidance for FY19 We expect INFY to maintain its constant currency (CC terms) revenue growth guidance of 6%-8% YoY for FY19. However, this will be below the NASSCOM s guidance of 7-9% YoY for the Indian IT sector. HCL Technologies is likely to maintain its revenue growth guidance of 9.5%-11.5% YoY in CC terms for FY19. We believe WPRO will offer a guidance of 1.5%-2.5% QoQ for Q4FY19. January 04, 2019
4 HCLT INFY KPIT MTCL MPHL NIITEC PSYS TCS TECHM WPRO ZENT HCLT INFY KPIT MTCL MPHL NIITEC PSYS TCS TECHM WPRO ZENT View Although, many Indian IT sector stocks have corrected in Q3FY19, we believe that a strong demand trend, due to corporate digital transformation and robust deal inflow will further accelerate the pace of growth in the short term. We remain optimistic about the overall IT sector. However, headwinds persist in the form of INR appreciation and global economic slowdown, especially trade war and Brexit induced, which may lead to a downgrade in the future. Among the large caps, we prefer HCLT as the strategy of Mode 1, Mode2, and Mode 3 offerings is being implemented in line with the company s expectation, and TECHM, as its communication vertical has recovered and deal inflow is healthy. We also like INFY, due to strong visibility in order inflow and road map over next three years. Our stance on TCS is neutral, due to fair valuations. Among the mid-caps, we prefer Persistent (PSYS), as we believe traction in Alliance business and also better growth visibility in Healthcare & BFSI vertical will further aid profitability, and Mindtree (MTCL), as higher exposure in digital services is likely to improve revenue growth. INR Revenue QoQ Growth (%) in Q3FY19E EBIT QoQ Growth (%) in Q3FY19E January 04,
5 Quarterly performance Large caps (` mn) Q3FY19E Q2FY19 Q3FY18 QoQ YoY Comments Infosys Sales (US$ mn) 2,965 2,921 2, US$ revenue growth of 1.5% QoQ Sales 213, , , INR revenue growth of 3.7% QoQ EBIT 50,179 48,793 42, Margin to decline 19bps QoQ PAT 41,599 40,966 37, Cross currency headwind 50bps EPS EBIT margin (%) (19 bps) (66 bps) TCS Sales (US$ mn) 5,298 5,215 4, US$ revenue growth of 1.6% QoQ Sales 381, , , INR revenue growth of 3.5% QoQ EBIT 101,886 97,710 77, Healthy Deal Inflow PAT 82,677 79,010 65, Margin to improve 19bps QoQ EPS Cross currency headwind 70bps EBIT margin (%) bps 152 bps Wipro Sales (US$ mn) - IT services 2,061 2,041 2, US$ revenue growth of 1% QoQ Sales (Including IT products) 149, , , INR revenue growth of 2.5% QoQ EBIT 20,270 19,130 19, Margin improvement by 44bps PAT 19,568 18,889 19, EPS EBIT margin (%) bps (78 bps) HCL Tech Sales (US$ mn) 2,145 2,099 1, US$ revenue growth of 2.2% QoQ Sales 154, , , Recovery in IMS business EBIT 30,899 29,552 25, Mode 3 business to aid growth PAT 26,297 25,247 21, Inorganic growth of 1% from H&D EPS Margin to improve by 11bps EBIT margin (%) bps 42 bps Tech Mahindra Sales (US$ mn) 1,248 1,218 1, US$ revenue growth of 2.5% QoQ Sales 89,913 86,298 77, Better deals in telecom EBIT 14,026 13,242 9, Enterprise to grow on back of HCI PAT 11,572 10,643 9, Adj. EPS (4.8) 23.3 EBIT margin (%) bps 287 bps OFSS Sales 12,756 12,133 10, Healthy License fee revenue EBIT 5,102 4,863 4, Margins to improve 168bps YoY PAT 3,642 3,520 2, EPS EBIT margin (%) (8 bps) 168 bps January 04,
6 Quarterly performance Mid caps (` mn) Q3FY19E Q2FY19 Q3FY18 QoQ YoY Comments NIIT Technologies Sales (US$ mn) US$ revenue growth of 1% QoQ Sales 9,609 9,074 7, INR revenue growth of 5.9% QoQ EBIT 1,393 1, Margins to remain flat QoQ PAT 1,211 1, EPS EBIT margin (%) bps 148 bps KPIT Sales (US$ mn) US$ revenue growth of 0.5% QoQ Sales 11,038 10,789 9, INR revenue growth of 2.3% QoQ EBIT 1,104 1, IES & SAP to decline in Q3 PAT EPS EBIT margin (%) (18 bps) 225 bps Mindtree Sales (US$ mn) US$ revenue growth of 2% QoQ Sales 18, , INR revenue growth of 2.9% QoQ EBIT 2,385 2,296 1, Margins to improve 12bps QoQ PAT 2,043 2,063 1,415 (1.0) 44.4 EPS (1.0) 45.0 EBIT margin (%) bps 119 bps Mphasis Sales (US$ mn) US$ revenue growth of 1.5% QoQ Sales 20,176 19,149 16, INR revenue growth of 5.4% QoQ EBIT 3,188 3,145 2, Wage hike to dent margins PAT 2,714 2,709 2, EPS EBIT margin (%) (62 bps) 35 bps Persistent Sales (US$ mn) US$ revenue decline of 5% QoQ Sales 8,938 8,356 7, Last Qtr impacted by project close EBIT 1, PAT EPS EBIT margin (%) bps 29 bps Zensar Sales (US$ mn) US$ revenue growth of 2.5% QoQ Sales 10,187 9,687 7, Better growth in Digital App Serv. EBIT 1,070 1, Margins to improve 14bps PAT EPS EBIT margin (%) bps (76 bps) January 04,
7 Currency Movement USD/INR Exhibit 6: EUR/USD % 4% 2% 0% -2% -4% -6% % 8% 4% 0% -4% -8% Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Average Rate - LHS QoQ Growth(%) - RHS Average Rate - LHS QoQ Growth(%) - RHS Exhibit 7: GBP/USD Exhibit 8: AUD/USD 1.5 8% % 1.4 4% % 2% 1.3 0% 0% 1.2-4% % -4% 1.1-8% % Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Average Rate - LHS QoQ Growth(%) - RHS Average Rate - LHS QoQ Growth(%) - RHS January 04,
8 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Stock price performance Large caps (x) Stock price performance Mid-caps (x) Infosys TCS Wipro HCL Tech Tech Mahindra NSE IT 50 NIIT Tech KPIT Mphasis PSYS ZENT Mindtree NSE IT January 04,
9 Financials and Valuations Mcap (` bn) CMP (`) TP (`) Upside (%) Reco. January 04, Net Sales (` mn) CAGR % EBIT Margin (%) EPS (`) CAGR % FY18 FY19E FY20E FY21E FY18-21E FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E FY18-21E HCL Tech 1, , Buy 505, , , , Infosys 1, Buy 705, , ,790 1,066, KPIT Tech Buy 36,656 43,422 49,314 55, Mindtree , Accumulate 54,628 70,704 81,547 92, Mphasis , Accumulate 65,459 77,405 88, , NIIT Tech 70 1,129 1, Buy 29,914 36,986 44,002 49, OFSS 308 3,609 4, Accumulate 45,275 52,255 57,458 62, Persistent Buy 30,337 35,825 39,484 44, TCS 7,129 1,901 2,050 8 Reduce 1,231,040 1,450,969 1,647,198 1,887, Tech Mah Buy 307, , , , WIPRO 1, (3) Reduce 544, , , , Zensar Tech Accumulate 31,077 37,758 44,119 51, Mcap (` bn) CMP (`) TP (`) Upside (%) Reco. P/E (x) ROE (%) EV/EBITDA (x) FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E HCL Tech 1, , Buy Infosys 1, Buy KPIT Tech Buy Mindtree , Accumulate Mphasis , Accumulate NIIT Tech 70 1,129 1, Buy OFSS 308 3,609 4, Accumulate Persistent Buy TCS 7,129 1,901 2,050 8 Reduce Tech Mah Buy WIPRO 1, (3) Reduce Zensar Tech Accumulate CMP as on 3 rd Jan 2018
10
11 DART RATING MATRIX Total Return Expectation (12 Months) Buy > 20% Accumulate 10 to 20% Reduce 0 to 10% Sell < 0% DART Team Purvag Shah Managing Director purvag@dolatcapital.com Amit Khurana, CFA Head of Equities amit@dolatcapital.com CONTACT DETAILS Equity Sales Designation Direct Lines Dinesh Bajaj VP - Equity Sales dineshb@dolatcapital.com Kartik Sadagopan VP - Equity Sales kartiks@dolatcapital.com Kapil Yadav VP - Equity Sales kapil@dolatcapital.com Equity Trading Designation P. Sridhar SVP and Head of Sales Trading sridhar@dolatcapital.com Chandrakant Ware VP - Sales Trading chandrakant@dolatcapital.com Shirish Thakkar VP - Head Domestic Derivatives Sales Trading shirisht@dolatcapital.com Kartik Mehta Asia Head Derivatives kartikm@dolatcapital.com Bhavin Mehta VP - Derivatives Strategist bhavinm@dolatcapital.com Hardik Mehta Sales Trader hardikm@dolatcapital.com Dolat Capital Market Private Limited. Sunshine Tower, 28th Floor, Senapati Bapat Marg, Dadar (West), Mumbai
12 ` Analyst(s) Certification The research analyst(s), with respect to each issuer and its securities covered by them in this research report, certify that: All of the views expressed in this research report accurately reflect his or her or their personal views about all of the issuers and their securities; and No part of his or her or their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report. I. Analyst(s) and Associate (S) holding in the Stock(s): (Nil) II. Disclaimer: This research report has been prepared by Dolat Capital Market Private Limited. to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies) solely for the purpose of information of the select recipient of this report. This report and/or any part thereof, may not be duplicated in any form and/or reproduced or redistributed without the prior written consent of Dolat Capital Market Private Limited. This report has been prepared independent of the companies covered herein. Dolat Capital Market Private Limited. and its affiliated companies are part of a multi-service, integrated investment banking, brokerage and financing group. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have provided or may provide services in respect of managing offerings of securities, corporate finance, investment banking, mergers & acquisitions, financing or any other advisory services to the company(ies) covered herein. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have received or may receive compensation from the company(ies) mentioned in this report for rendering any of the above services. Research analysts and sales persons of Dolat Capital Market Private Limited. may provide important inputs to its affiliated company(ies) associated with it. While reasonable care has been taken in the preparation of this report, it does not purport to be a complete description of the securities, markets or developments referred to herein, and Dolat Capital Market Private Limited. does not warrant its accuracy or completeness. Dolat Capital Market Private Limited. may not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This report is provided for information only and is not an investment advice and must not alone be taken as the basis for an investment decision. The investment discussed or views expressed herein may not be suitable for all investors. The user assumes the entire risk of any use made of this information. The information contained herein may be changed without notice and Dolat Capital Market Private Limited. reserves the right to make modifications and alterations to this statement as they may deem fit from time to time. Dolat Capital Market Private Limited. and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. This report is neither an offer nor solicitation of an offer to buy and/or sell any securities mentioned herein and/or not an official confirmation of any transaction. This report is not directed or intended for distribution to, or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Dolat Capital Market Private Limited. and/or its affiliated company(ies) to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this report may come, are required to inform themselves of and to observe such restrictions. For U.S. Entity/ persons only: This research report is a product of Dolat Capital Market Private Limited., which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by Dolat Capital Market Private Limited. only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person or entity. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Dolat Capital Market Private Limited. has entered into an agreement with a U.S. registered brokerdealer Ltd Marco Polo Securities Inc. ("Marco Polo"). Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer/entity as informed by Dolat Capital Market Private Limited. from time to time. Dolat Capital Market Private Limited. Corporate Identity Number: U65990DD1993PTC Member: BSE Limited and National Stock Exchange of India Limited. SEBI Registration No: BSE - INB & INF , NSE - INB & INF , Research: INH Registered office: Office No. 141, Centre Point, Somnath, Daman , Daman & Diu Board: Fax: research@dolatcapital.com Our Research reports are also available on Reuters, Thomson Publishers, DowJones and Bloomberg (DCML <GO>)
Result Update. Atul Auto. Accumulate
Atul Auto Accumulate Result Update Looking out for margin and distribution expansion Atul Auto (ATA) top line growth was in-line with our estimates at ` 1,765 mn but margins were lower due to higher other
Result Update. Sterling Tools. Buy
Sterling Tools Buy Result Update Growth momentum continues Sterling tools (STRT) number were broadly in line with estimates. Margins on a sequential basis have started showing signs of improvement at gross
Result Update. Tech Mahindra. Buy
Tech Mahindra Buy Result Update View: Communication to aid profitability Company won deals worth USD 440mn in the quarter. Of these, USD 240mn was in the communication vertical and USD 200mn in enterprise.
Result Update. Ahluwalia Contracts. Buy
Ahluwalia Contracts Buy Result Update Strong order inflow to drive growth ACIL posted 31.3% YoY growth in Q2FY19 revenue (after 2 consecutive quarter of de-growth) to `4.4 bn (9.% above estimates) led
Infosys. Result Update. Buy
Infosys Buy Result Update INFY raises its revenue guidance for FY19E in CC terms; Maintain BUY The USD revenue rose 2.3% QoQ (2.7 % QoQ CC terms) to USD 2,987 million, (DCMe: USD 2,965 million), due to
Result Update. Havells. Buy
Result Update Havells Buy Q2 was weak on the margin front with input cost pressures visible. The one bright spot has been the inventory build-up for the festive season in the ECD business, as evident in
Result Update. Sterling Tools. Accumulate
Sterling Tools Accumulate Result Update OEM slowdown and High RM cost impacted numbers. Downgrade to Accumulate. Sterling Tools (STRT) numbers were below estimates on profitability parameters as OEM slowdown
MRF. Result Update. Accumulate
Result Update MRF Accumulate Revenue disappoints MRF posted weak topline growth of 8.1% YoY at ` 38.6 bn for the quarter ended along with gross and EBITDA margins of 39.8% and 15.4% respectively. The gross
Result Update. Skipper. Sell
Skipper Sell Result Update Muted ordering, slower execution increased cost leads to tepid growth For Q2FY19, the revenue grew 1.6% YoY to ` 5,239.6mn, grew 9.5% QoQ from ` 4787mn. EBITDA declined 43.2%
Result Update. Khadim India. Buy
Khadim India Buy Result Update Delay in price hike impacted margins Khadim s revenues beat our estimates, but EBITDA and APAT came below our estimate. The revenue growth in retail business was at 7% -
Result Update. NIIT Technologies. Buy
Result Update NIIT Technologies Buy Healthy revenue growth & margins to aid profitability; upgrade to Buy USD revenue (Ex Hedge Gain) grew 5.8% QoQ to USD 132mn (DCMe: USD 128mn) led by healthy organic
Skipper. Result Update. Reduce
Result Update Skipper Reduce Muted growth; opportunities from new segments For Q4FY18, the revenue declined 3% YoY to ` 5928mn, grew 4.7% QoQ from ` 5,664mn. EBITDA grew 8% YoY to ` 185mn, grew ~47% QoQ
CONCOR. Management Meeting Update. Buy
CONCOR Buy Management Meeting Update All is well DFC continues to be the most important long-term trigger as apart from boosting volumes, it will aid margins. Distribution logistics will help reduce rail
Techno Electric & Engineering
Result Update Techno Electric & Engineering Downgrade to Reduce (Prev. Accumulate) Techno is countering the slowing T&D business by going to overseas markets for orders. It continues to manage its balance
Music Broadcast. Result Update. Buy. Valuation (x) Estimates (` Mn) Q1FY18 Result (` Mn)
Result Update Music Broadcast Buy Stable growth quarter; strong outlook for H2FY18 MBL reports revenue growth of 11.9% YoY supported by higher utilisation in new stations. EBITDA margin improved 106bps
Voltas. Result Update. Buy. Q4FY18 Result (` Mn) May 21, 2018
Result Update Voltas Buy Softness seen in AC industry in Q4 has also got spilt over into Q1FY19, with unseasonal showers and lower temperatures playing spoilsport. The next seasonally important quarter
Bharat Petroleum Corporation
Result Update Bharat Petroleum Corporation Accumulate Bharat Petroleum Corporation (BPCL) s results were in-line with our estimates on revenues and below our estimates on profitability front. Revenues
GSK Pharma. Result Update. Buy
Result Update GSK Pharma Buy Margins continue to hold above 21% The company continues to improve their margins. Company reported overall flat revenue with EBITDA margins at 2% taking the PAT growth to
INOX Leisure. Result Update. Accumulate. Valuation (x) Estimates (` Mn) Q4FY18 Result (` Mn) May 08, 2018
Result Update INOX Leisure Accumulate Ad. growth outperformance drives profitability Inox reported healthy revenue growth YoY on back of good ad and F&B revenue. EBITDA margin improved 470bps YoY to 13.0%
MRF. Result Update. Accumulate
Result Update MRF Accumulate Quarter marginally disappoints but outlook is intact MRF revenue grew 15.8% YoY in to ` 39bn, which was lower than our estimates of ` 4 bn. Profitability was also marginally
HCC. Result Update. Accumulate. Debt reduction factored in. Valuation (x) Estimates (` mn) Q2FY18 Result (` Mn) November 03, 2017
Result Update HCC Accumulate Debt reduction factored in Q2FY18 standalone revenue increased by 6.5% YoY to `9.7bn (in-line with estimates) due to better execution. Excluding claims of `1.85 bn (`1.8 bn
Transport Corporation of India
Transport Corporation of India Accumulate Result Update Better numbers with improvement in industry utilisation rate Revenue up by 25.7%YoY to ` 652.5mn; grew 9% QoQ from ` 5,553.1mn. EBITDA grew by 53.6%YoY
NCC. Result Update. Accumulate
Result Update NCC Accumulate GST spoiled the show, but robust order inflow positive NCC posted 33.3% YoY de-growth in Q2FY18 standalone revenue to `13bn (35.8% below estimates). The fall in revenue was
Berger Paints. Result Update. Downgrade to Reduce (Prev. - Accumulate) Valuation (x) Estimates (` mn) Q2FY18 Result (` Mn) November 06, 2017
Result Update Berger Paints Downgrade to Reduce (Prev. - Accumulate) Continues to gain market share Revenues (consol.) grew by 11.% YoY to ` 12.bn in-line with our estimate. Standalone revenues were up
Larsen & Toubro. Result Update. Accumulate. Valuation (x) Estimates (` Bn) Q1FY18 Result (` Mn) July 26, 2018
Result Update Larsen & Toubro Accumulate Q1 was an inline quarter adjusting for IndAS changes and one-off gains. It has held on to its FY19 guidance given at the beginning of the year, making Q1 a non-event
Maruti Suzuki India. Result Update. Accumulate. Product mix driving margins
Result Update Maruti Suzuki India Accumulate Product mix driving margins MSIL reported volume growth of 24.3% YoY and revenue growth rate of 28% YoY in. The base was low because of multiple events such
Simplex Infrastructures
Result Update Simplex Infrastructures Sell Working capital pressure continues SIL posted 7.4% YoY rise in Q1FY18 standalone revenue (increased post 6 consecutive quarters of de-growth) to `15.1bn (in line
Shemaroo Entertainment
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Result Update India (Entertainment) Institutional Research Shemaroo Entertainment Buy CMP ` 330 Target / Upside
Result Update ITC. Accumulate
ITC Accumulate Result Update Volume growth improvement continues ITC s results came marginally ahead of our expectations. The cigarette business posted ~6% volume growth which was marginally better than
Maruti Suzuki India. Result Update. Accumulate. Growth Story Continues. Valuation (x) Estimates (` mn) Q3FY18 Result (` Mn)
Result Update Maruti Suzuki India Accumulate Growth Story Continues MSIL volume continues to remain strong at 11.3% YOY which totaled to 431,112 units during the quarter. The growth in realisations per
Result Update. HDFC Bank. Accumulate
HDFC Bank Accumulate Result Update Results in line, Caution on agricultural book HDFC bank reported a steady profit growth of 20% YoY aided by a NII growth of 22% YoY on stable NIMs, a robust core fees
Music Broadcast. Annual Report Analysis. Buy. Financials (` mn) August 31, 2018
Annual Report Analysis Music Broadcast Buy MBL reported revenue growth of 9.9% YoY in FY18 to ` 2982mn which includes revenue from exchange of services of ` 196 as on 31 st March, 218 as compared to `
Gujarat State Petronet
Result Update Gujarat State Petronet Accumulate results were better than our estimates largely driven by higher than expected volumes. Higher volumes were due to low gas cost and these spot volumes resulted
ICICI Bank. Result Update. Buy. Mixed bag. Valuation (x) Estimates (` mn) Q3FY18 Result (` Mn)
Result Update ICICI Bank Buy Mixed bag Q3FY18 PAT at ` 16.5bn down 32% YoY & 20% QoQ. NII mere 6% up YoY. NIMs stood stable YoY; down QoQ to 3.1%. Other income stood down 20% YoY & 39% QoQ; on the back
Result Update. KEI Industries. Buy
KEI Industries Buy Result Update Numbers beat estimates, Traction continues. Maintain Buy KEI Industries (KEI) numbers were ahead of estimates driven by strong sales in retail segment and expected growth
Dilip Buildcon. Result Update. Buy. Stellar performance continues
Result Update Dilip Buildcon Buy Stellar performance continues DBL s standalone revenue grew sharply by 72.6% YoY to `15.8bn in Q2FY18 (37.2% above estimates) due to better execution run rate in Road and
Transport Corporation of India
India (Logistics) Institutional Research Transport Corporation of India DOLAT CAPITAL Buy Q2FY16 Result Update CMP ` 283 Target / Downside ` 333 / 18% BSE Sensex 26,838 NSE Nifty 8,112 Scrip Details Equity
Balkrishna Industries
Annual Report Analysis Balkrishna Industries Accumulate Distribution expansion is the focus area Balkrishna Industries (BKT) has highlighted the importance of distribution reach and higher number of SKUs
Kajaria Ceramics. Result Update. Buy
Result Update Kajaria Ceramics Buy Cautiously Optimistic In the last one & half year Ceramic Industry faced multiple challenges, Demonetization and GST Implementation restricted volume growth. Collective
Skipper. Buy. Result Update. India (Capital Goods) Institutional Research DOLAT CAPITAL
Result Update India (Capital Goods) Institutional Research DOLAT CAPITAL Skipper CMP ` 140 Target / Upside ` 162/16% BSE Sensex 25,400 NSE Nifty 7,783 Scrip Details Equity / FV ` 102mn/` 1/- Market Cap
Skipper. Accumulate. Result Update. India (Capital Goods) Institutional Research DOLAT CAPITAL
Result Update India (Capital Goods) Institutional Research DOLAT CAPITAL Skipper CMP ` 139 Target / Upside ` 145/5% BSE Sensex 26,818 NSE Nifty 8,296 Scrip Details Equity / FV ` 102mn/` 1/- Market Cap
Container Corporation of India
Oct16 Nov16 Dec16 Jan17 Feb17 Mar17 Apr17 May17 Jun17 Jul17 Aug17 Sep17 Company Update Container Corporation of India Buy Stacked for success CONCOR has all its key triggers in place. DFC continues to
Result Update. Yes Bank. Buy
Yes Bank Buy Result Update Returning to old glory days, Expect a strong rerating With the appointment of the new MD and CEO from outside the group, we believe the hiatus in the Yes bank s story is now
Mahanagar Gas. Result Update. Accumulate
Result Update Mahanagar Gas Accumulate Volume Traction with Profitability Mahanagar Gas (MGL) numbers has outperformed on volume as well as profitability parameters. Volume traction was primarily driven
Dixon Technologies. Annual Report Analysis. Accumulate. Annual Report The IPO year. FINANCIALS (` Mn)
Annual Report Analysis Dixon Technologies Accumulate Annual Report 218- The IPO year Dixon Technologies came up with the IPO in FY18 and got a great response from investors with a 117x subscription. From
Repco Home Finance REPCO IN
11 August 2014 Price: `431 India Banking & Financial Services Company Update BUY Repco Home Finance REPCO IN 12m Price Target: `460 Steady quarter REPCO reported 1Q15 net profit at `248mn, up 11% YoY and
Page Industries. Annual Report Analysis. Accumulate. FINANCIALS (` Mn) July 14, 2017
Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Annual Report Analysis Page Industries Accumulate Despite demonetisation, Page Industries witnessed revenue growth of
ICICI Bank. Result Update. Buy
Result Update ICICI Bank Buy Stress priced-in; Servings are on course Lull operating performance; retail broadens out PAT at ` 20.4bn (in-line with our est. ` 20.2bn) reporting soft QoQ growth and 8% YoY
Kalpataru Power Transmission
Annual Report Analysis Kalpataru Power Transmission Accumulate Robust order book growth in FY18 FY18 saw the standalone order book grow at 38% YoY to ` 124bn (T&D- `84.3bn; Oil & Gas and Rail -`39.7bn)
Near-term pressure, but long-term outlook positive
INDUSTRY IT CMP (as on 2 Nov 2015) Rs 1,812 Target Price Rs 2,050 Nifty 8,051 Sensex 26,559 KEY STOCK DATA Bloomberg ECLX IN No. of Shares (mn) 30 MCap (Rs bn) / ($ mn) 55/843 6m avg traded value (Rs mn)
Sagar Cement. Result Update. Buy. Valuation (x) Estimates (` mn) Q1FY19 Result (` Mn)
Result Update Sagar Cement Buy Better than expected cost rationalization, drives operating performance SGC reported topline growth of 6.2% YoY to ` 2.74bn (2.3% lower than D est). EBITDA at ` 364Mn (-14.2%
Tata Consultancy Services Ltd.
Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Tata Consultancy Services Ltd. Target: 1975 / 2010 Bloomberg: TCS IN Investment rationale QoQ constant
Dilip Buildcon. Visit Note. Buy. FY18E a bumper year! Show continues!
Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Visit Note Dilip Buildcon Buy FY18E a bumper year! Show continues! Company and Strategy DBL with its differentiated business
Particulars Q3FY15 Q3FY14 YoY (%) Q2FY15 QoQ (%) 9MFY15 9MFY14 YoY (%) Net Sales 3,774 3, , ,453 8,
Consumer / Result Update Page Industries CMP: ` 11,760 TP: ` 12,992 Accumulate Q3FY15 - Volume growth of 15% Volume growth of 15.2% was backed by a strong growth in the Mens and Leisure wear segment at
Looking on expectantly. Gradual growth uptick, tier-2 s outperformance to sustain
March 2018 Results Preview Sector: Technology Looking on expectantly Gradual growth uptick, tier-2 s outperformance to sustain Technology Our recent IT sector update Company Name Cyient HCL Tech Hexaware
Cyient. Good show, priced in NEUTRAL RESULTS REVIEW 4QFY17 21 APRIL Highlights of the quarter
INDUSTRY IT CMP (as on 20 Apr 2017) Rs 503 Target Price Rs 540 Nifty 9,136 Sensex 29,422 KEY STOCK DATA Bloomberg CYL IN No. of Shares (mn) 113 MCap (Rs bn) / ($ mn) 57/876 6m avg traded value (Rs mn)
JK Cement. Result Update. Buy. Q3FY18 Result (` Mn)
Result Update JK Cement Buy Volume growth supports top-line JK Cement reported a revenue of ` 11.2bn (+26.8% YoY, +1.7% QoQ), 2% higher than D est. The cement dispatches during the quarter rose by 20.3%
CMP: INR401 TP: INR516 Buy. * After ESOP charges; # Axon consolidated in December 2008
19 October 2011 1QFY12 Results Update Sector: Technology BSE SENSEX S&P CNX 16,748 5,038 Bloomberg HCLT IN Equity Shares (m) 700.9 52-Week Range (INR) 528/360 1,6,12 Rel. Perf. (%) 4/-1/7 M.Cap. (INR b)
Wipro (WPRO IN) Solid revenue beat, BFSI remains strong. Q2FY19 Result Update. Rating: ACCUMULATE CMP: Rs309 TP: Rs350.
(WPRO IN) Rating: ACCUMULATE CMP: Rs309 TP: Rs350 October 24, 2018 Q2FY19 Result Update Change in Estimates Target Reco Change in Estimates Current Previous FY19E FY20E FY19E FY20E Rating ACCUMULATE HOLD
HCL Technologies. Rating: Target price: EPS: Target CMP. Rating. Rs. 826 REDUCE. Rs.760
: price: EPS: How does our one year outlook change? HCLT registered a strong quarter with revenues growing at 6.5% qoq (4% qoq organic) including $40m contribution from Volvo, after a disappointing show
Mphasis. Increased confidence on margins. Source: Company Data; PL Research
Increased confidence on margins July 25, 2016 Govind Agarwal govindagarwal@plindia.com +91 22 66322300 Rating BUY Price Rs540 Target Price Rs570 Implied Upside 5.6% Sensex 28,095 Nifty 8,636 (Prices as
Maruti Suzuki. Source: Company Data; PL Research
Healthy operating performance; Accumulate October 28, 2016 Rohan Korde rohankorde@plindia.com +91 22 66322235 Rating Accumulate Price Rs5,860 Target Price Rs6,356 Implied Upside 8.5% Sensex 27,916 Nifty
Hexaware Technologies
INDUSTRY IT CMP (as on 24 Apr 2017) Rs 220 Target Price Rs 215 Nifty 9,218 Sensex 29,656 KEY STOCK DATA Bloomberg/Reuters HEXW IN No. of Shares (mn) 302 MCap (Rs bn) / ($ mn) 67/1,033 6m avg traded value
Asian Paints. CMP: INR2,722 TP: INR3,161 Buy
BSE SENSEX S&P CNX 16,739 5,049 Bloomberg APNT IN Equity Shares (m) 95.9 52-Week Range (INR) 3,366/2,395 1,6,12 Rel. Perf. (%) -5/-3/14 M.Cap. (INR b) 261.1 M.Cap. (USD b) 4.9 23 January 2012 3QFY12 Results
Tech Mahindra. Source: Company Data; PL Research
Margin beat driven by Headcount reduction November 01, 2017 Madhu Babu madhubabu@plindia.com +91 22 66322300 Rating BUY Price Rs489 Target Price Rs535 Implied Upside 9.4% Sensex 33,600 Nifty 10,441 (Prices
NIIT Technologies. NEUTRAL Higher capex weighing on FCF RESULTS REVIEW 2QFY15 16 OCT 2014
RESULTS REVIEW 2QFY15 16 OCT 2014 NIIT Technologies NEUTRAL INDUSTRY IT SERVICES Higher capex weighing on FCF CMP (as on 14 Oct 2014) Rs 394 Target Price Rs 406 Nifty 7,864 Sensex 26,349 KEY STOCK DATA
Sector Update > Q4FY2016 earnings preview
IT sector update Sector Update > FY2016 earnings preview Soft quarter, cross-currency headwinds add to woes Visit us at www.sharekhan.com April 06, 2016 FY2016 result expectations Soft quarter, affected
BHEL SELL RESULTS REVIEW 1QFY15 13 AUG CMP (as on 12 Aug 2014) Rs 224 Target Price Rs 188
RESULTS REVIEW 1QFY15 13 AUG 2014 BHEL SELL INDUSTRY CAPITAL GOODS CMP (as on 12 Aug 2014) Rs 224 Target Price Rs 188 Nifty 7,727 Sensex 25,881 KEY STOCK DATA Bloomberg/Reuters BHEL IN/BHEL.BO No. of Shares
Marico Kaya BUY RESULTS REVIEW 4QFY15 29 APR 2015
RESULTS REVIEW 4QFY15 29 APR 2015 Marico Kaya INDUSTRY FMCG CMP (as on 28 Apr 2015) Rs 1,635 Target Price Rs 1,823 Nifty 8,240 Sensex 27,226 KEY STOCK DATA Bloomberg MAKA IN No. of Shares (mn) 13 MCap
BLS International Services
INDUSTRY IT Processing CMP (as on 23 May 218) Rs 17 TP Rs 23 Nifty 1,43 Sensex 34,345 KEY STOCK DATA Bloomberg BLSIN IN No. of Shares (mn) 12 MCap (Rs bn) / ($ mn) 18/255 6m avg traded value (Rs mn) 89
NIIT Technologies. Strong growth in core services. Source: Company Data; PL Research
Strong growth in core services October 19, 2015 Govind Agarwal govindagarwal@plindia.com +91 22 66322300 Hussain Kagzi hussainkagzi@plindia.com +91 22 66322242 Rating BUY Price Rs494 Target Price Rs625
Persistent Systems. Growth led by Enterprise Retain BUY. Source: Company Data; PL Research
Growth led by Enterprise Retain BUY October 26, 20 Govind Agarwal govindagarwal@plindia.com +91 22 66322300 Hussain Kagzi hussainkagzi@plindia.com +91 22 66322242 Rating BUY Price Rs669 Target Price Rs780
CMP: INR415 TP: INR 471 BUY
04 Mar 2013 Update Sector: Technology Wipro CMP: INR415 TP: INR 471 BUY Pipeline and deal signings suggest improvement in growth; Multiple levers and focus on productivity will cushion margin headwinds
KPIT Cummins Infosystems (KPISYS)
Result Update Rating matrix Rating : Hold Target : 110 Target Period : 12 months Potential Upside : 6% Key Financials ( Crore) FY12 FY13E FY14E FY15E Net Sales 1500 2239 2517 2876 EBITDA 218 365 423 472
Cummins India. Growth/margin bottoming. Source: Company Data; PL Research
Growth/margin bottoming May 25, 2018 Kunal Sheth kunalsheth@plindia.com +91 22 66322257 Shreyans Jain shreyansjain@plindia.com +91 22 66322256 Rating BUY Price Rs704 Target Price Rs928 Implied Upside 31.8%
Praj Industries (PRAIN)
Result Update October 18, 211 Rating matrix Rating : Buy Target : 96 Target Period : 12-15 months Potential Upside : 25% WHAT S CHANGED Praj Industries (PRAIN) 77 Key Financials Crore FY1 FY11 FY12E FY13E
Fineotex Chemical Ltd
Company Update Decent Performance under Macroeconomic Pressure; Business Traction to Continue: Fineotex Chemical recorded decent set of result as consolidated sales grew by 1.1% YoY (largely in line) to
Oil & Gas. 4QFY17E Results Preview. 13 Apr Deepak Kolhe
Oil & Gas Results Preview 13 Apr 2017 Satish Mishra satish.mishra@hdfcsec.com +91-22-6171-7334 Deepak Kolhe deepak.kolhe@hdfcsec.com +91-22-6171-7316 1QFY15 2QFY15 3QFY15 FY15 1QFY16 2QFY16 3QFY16 FY16
Persistent Systems (PSYS IN)
(PSYS IN) Rating: ACCUMULATE CMP: Rs560 TP: Rs725 October 22, 2018 Q2FY19 Result Update Change in Estimates Target Reco Change in Estimates Current Previous FY19E FY20E FY19E FY20E Rating ACCUMULATE ACCUMULATE
TVS Motors. Source: Company Data; PL Research
Margins trajectory looking up ; Accumulate November 01, 2017 Saksham Kaushal sakshamkaushal@plindia.com +91 22 66322235 Poorvi Banka poorvibanka@plindia.com +91 22 66322426 Rating Accumulate Price Rs709
Mindtree. Source: Company Data; PL Research.
Strong Quarter, Guidance remains conservative April 18, 2018 Madhu Babu madhubabu@plindia.com +91 22 66322300 Rating Accumulate Price Rs866 Target Price Rs930 Implied Upside 7.4% Sensex 34,332 Nifty 10,526
HCL Technologies. Source: Company Data; PL Research
Strong seasonality in IBM IP aids growth beat January 20, 2018 Madhu Babu madhubabu@plindia.com +91 22 66322300 Rating BUY Price Rs958 Target Price Rs1,020 Implied Upside 6.5% Sensex 35,512 Nifty 10,895
Asian Paints. Source: Company Data; PL Research
Premium valuations to sustain, Accumulate October 4, 17 Amnish Aggarwal amnishaggarwal@plindia.com +91 Gaurav Jogani gauravjogani@plindia.com +91 8 Rating Accumulate Price Rs1,1 Target Price Rs1,9 Implied
Real Estate. 4QFY17E Results Preview. 13 Apr Parikshit D Kandpal
Real Estate Results Preview 13 Apr 2017 Parikshit D Kandpal parikshitd.kandpal@hdfcsec.com +91-22-6171-7317 2QFY14 3QFY14 FY14 1QFY15 2QFY15 3QFY15 FY15 1QFY16 2QFY16 3QFY16 FY16 1QFY17 2QFY17 3QFY17 2QFY14
Visaka Industries Ltd
Company Update Superior Product Mix & New Age Markets to Aid Growth New investments to aid growth: Visaka continues to give a good set of numbers. YoY EPS grew at 142% aided by a revenue growth of 1.5%
Allcargo Logistics. Source: Company Data; PL Research
Slow capex continue to impact PES, weak show continues May 24, 2018 Keyur Pandya keyurpandya@plindia.com +912266322247 R Sreesankar rsreesankar@plindia.com +912266322214 Rating Accumulate Price Rs120 Target
Mphasis (MPHL IN) Modest Revenue and margin miss. Q2FY19 Result Update. Rating: ACCUMULATE CMP: Rs1,068 TP: Rs1,220.
(MPHL IN) Rating: ACCUMULATE CMP: Rs1,068 TP: Rs1,220 October 21, 2018 Q2FY19 Result Update Change in Estimates Target Reco Change in Estimates Current Previous FY19E FY20E FY19E FY20E Rating ACCUMULATE
Asset Management. SEBI notifies significant changes to TER structure. 18 September 2018 India Asset Management Sector Report
18 September 2018 India Asset Management Sector Report Asset Management SEBI notifies significant changes to TER structure In its board meeting held today, SEBI has notified reductions in the maximum TER
Cement, Metals & Mining
Cement, Metals & Mining 4QFY17E Results Preview 13 Apr 2017 Ankur Kulshrestha, CFA ankur.kulshrestha@hdfcsec.com +91-22-6171 7346 Sarfaraz Singh sarfaraz.singh@hdfcsec.com +91-22-6171 7331 Mar-15 Apr-15
Mindtree. Steady quarter, Upside capped NEUTRAL RESULTS REVIEW 4QFY19 18 APR INDUSTRY CMP (as on 16 Apr 2019) Rs 972 Target Price Rs 1,040
Steady quarter, Upside capped We maintain NEUTRAL on Mindtree following inline 4QFY19. Our TP is Rs 1,040 implying 18x FY21E, with ~2% change in est. HIGHLIGHTS of the QUARTER Rev growth was inline at
Hold Target Price: Rs 574
03 MAY 2017 Quarterly Update Hold Target Price: Rs 574 Q4FY17: Macro overhang persists SQS India BFSI Ltd delivered a modest performance in Q4FY17, with earnings (PAT) coming in at Rs 4.4 Cr, down 58.8%
Reliance Industries. Timing is everything BUY COMPANY UPDATE 1 OCT 2014
INDUSTRY OIL & GAS Timing is everything COMPANY UPDATE 1 OCT 2014 Reliance Industries BUY CMP (as on 30 Sep 2014) Rs 945 Target Price Rs 1,100 Nifty 7,965 Sensex 26,631 KEY STOCK DATA Bloomberg/Reuters
IT Services Sector Update More steam left for growth
Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 IT Services Sector Update More steam left for growth IT Services stock have done well in last five months on the back of strong rerating especially of companies
Cummins India. Source: Company Data; PL Research
Technology leadership, cost optimization key focus October 28, 2016 Kunal Sheth kunalsheth@plindia.com +91 22 66322257 Samir Bendre samirbendre@plindia.com +91 22 66322256 Rating Accumulate Price Rs852
Indraprastha Gas. Growth traction continues. Source: Company Data; PL Research
Growth traction continues June 28, 216 Avishek Datta avishekdatta@plindia.com +91 22 66322254 Rating BUY Price Rs65 Target Price Rs632 Implied Upside 4.5% Sensex 26,43 Nifty 8,95 (Prices as on June 27,
Ahluwalia Contracts (India)
May-14 Jul-14 Aug-14 Sep-14 Oct-14 Dec-14 Jan-15 Feb-15 Apr-15 May-15 India Research Infrastructure May 22, 215 QUARTERLY REVIEW Bloomberg: AHLU IN Reuters: AHLU.BO BUY Better performance ahead ACIL posted
Margin boost through non-core book
INDUSTRY NBFCs CMP (as on 26 Apr 2017) Rs 676 Target Price Rs 600 Nifty 9,352 Sensex 30,133 KEY STOCK DATA Bloomberg LICHF IN No. of Shares (mn) 505 MCap (Rs bn) / ($ mn) 341/5,319 6m avg traded value
South Indian Bank. Result Update. Buy
Result Update South Indian Bank Buy "Formidable B/S in making Q2FY18 PAT took a major hit owing to upfront provisioning on value diminution of SRs issued by ARCs. The PAT at ` 43.2mn mounted YoY by huge
Infosys (INFO IN) Strong performance; small miss on margins maintain BUY
INSTITUTIONAL EQUITY RESEARCH Infosys (INFO IN) Strong performance; small miss on margins maintain BUY INDIA IT SERVICES Quarterly Update 11 January 2019 Infosys reported mix set of numbers this quarter
Tech Mahindra ACCUMULATE. Performance Highlights CMP. `955 Target Price `1,070. 2QFY2013 Result Update IT. Investment Period 12 months
2QFY2013 Result Update IT November 5, 2012 Tech Mahindra Performance Highlights (` cr) 2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) Net revenue 1,631 1,543 5.7 1,333 22.4 EBITDA 338 330 2.3 204 65.4 EBITDA