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August 14, 2024

Pharma: Profit Booking Started
Today without hiddenburg huge selloff
IN MOST OF CASH STOCKS HUGE HUGE PROFIT BOOKING SEEN
CLSA on Piramal Ent
Downgrade To Underperform, Target Cut To Rs 860
Co Saw Negative Credit Costs Due To Lower Provisions On Stage 1/3 Assets
Negative Credit Costs Due To One-off Gains Supported Otherwise Weak Operating Profit
AUM Growth Of 10% YoY Was Primarily Driven By 43% YoY Growth In Retail Book
Some Segments Of Its Retail Book Are Continuing To See A Deteriorating 90+ DPD Trend
Believe This Could Put Pressure On Both Growth And Credit Costs
Management Indicated Near-term Pressure On Its Cost Of Funds
Jefferies on Piramal Ent
U-P, TP Rs 805
1Q core PAT Rs778m, below Rs815mn est. due to lower NII.
Co utilized Rs2.6bn of overlay provn in 1Q which aided profit
Retail loans growing well &legacy wholesale AUM should shrink further
Expect slow earnings recovery
Jefferies on Muthoot Fin
Buy Call, Target Rs 2,220
Q1 Profit Grew 11% YoY To Rs 1,080 Cr (7% Miss) As Beat In PpOP Was Offset By Higher Provisions
Loan Growth Surprised Positively, Aided By Higher Gold Prices
Customer & Tonnage Growth Improved QoQ
NIMs Fell QoQ, But Held Up Better Than Est
Gold Gross NPA Rose 70 bps QoQ
Provision Surprised Negatively, But With LTV On Gross NPA At 54%, Loan Losses Should Be Limited
BOFA on Muthoot Fin
Buy, TP Rs 2040
Gold: Strong growth tailwinds AUM +11% QoQ, strong new customer acquisition/activation with loan accounts +5.6% QoQ
PPOP at INR17.1bn (+4% vs BofAe), PAT at INR10.8bn (-5% vs BofAe) on higher provisions; GS-2/GS-3 rose +138bp/70bp QoQ
MS on Muthoot Fin
UW, TP Rs 1330
PAT missed MSe on higher credit costs
Gold price rally drove 11% QoQ gold loan growth (MSe 13%)
NTM P/B of 2.5x & P/E of 14x are expensive
Have seen sharp stock reversals in past once gold prices stagnate or start falling
MS on Manappuram Finance
Overweight Call, Target Rs 245
Q1 Was A Muted Quarter
1% PAT Miss Due To Higher Credit Costs In Standalone & MFI Subsidiary
Standalone NIM Missed Estimates Owing To Higher Borrowings During Quarter
Yields Were In-line With Estimates Even As Gold Loan Yields Fell 30 bps QoQ To 22.2%
Management Raised Its Guidance For Gold Loan Growth From 12-13% To 15% For FY25
Mgmt Also Guided That Credit Costs At Asirvad Microfinance Likely To Remain Elevated
Jefferies on Manappuram Finance
Buy Call, Target Rs 270
Q1 PAT Grew 12% YoY 3% Below Estimates Despite Slight Beat In PpOP Due To Higher Provisions
Gold AUM Grew 10% QoQ Due To Higher Gold Prices & Slight Uptick In Customer Growth
Margins Dipped QoQ
Gross NPA In MFI Segment Fell QoQ
Gross NPA In Other Non-Gold Segments Rose QoQ, But These Form 22% Of Loans
Co Should Gain From Gold Price Tailwind, Growth In Non-Gold Portfolio
Concerns Around Stress In MFI/Non-Gold Book Seem Largely Priced In
BoFA Sec on Manappuram Finance
Buy, TP Rs 247
Strong tailwinds in Gold: AUM +9.7% QoQ on +2.9% QoQ rise in gold customers, +6.1% rise in ATS; OGL share at 70% vs 57% QoQ
Non-gold business disappoints with 3.5% QoQ AUM growth & deterioration in AQ; Non-gold AUM mix down to 47%
Jefferies on Max Fin
Buy Call, Target Rs 1,220
Q1 VNB Of Was Up Just 3% YoY, Missing Est Despite 31% YoY Growth In Premium
Miss In Q1 Was Due To Weaker Mix Of Premiums, Led By Doubling Of Ulips, & Share Rose To 39%
Expect Mix Of Premium To Normalise As Sales Through Banca And ecom Are Managed Better
Persistency Rose By 3 ppt YoY To 87%; ROEV Was 14%; EV Growth Of 30% Including Capital Infusion
Valuations At 1.5x FY26 P/EV Is Attractive
CLSA on Hindalco
Outperform Call, Target Rs 760
Q1 India EBITDA Was Ahead Of Est On Lower Aluminium COP & Better Copper Profitability
Spot LME Was $210/t Lower Than Q1
Profitability Impact Is Likely To Be Cushioned By A Better Mix And Hedging
With Downstream Expansion Near Complete, Focus Now Shifts To Upstream Projects
Upstream Projects Paves Way For Volume Growth & Margin Expansion
Jefferies on Hindalco
Buy Call, Target Rs 800
Q1 EBITDA Rose 32% YoY & In-line With Estimates
India Business Is Delivering Well With Good Cost Control In Aluminum
India Business Is Delivering Better Margins In Copper
The Recent Slide In Aluminium Price Poses Some Headwind
Novelis Is Benefiting From Improved Beverage Can Demand
The Flooding Issue At Swiss Plant Should Normalise In H2
Co’s 1.2x FY25 PB Is Reasonable
JPM on Hindalco
OW, TP Rs 725
EBITDA beat in India business; three upstream projects on the anvil
Hindalco’s net cash balance sheet in India biz keeps co well positioned to pursue growth projects
While 2QFY25 should see a softer EBITDA/t due to decline in LME prices
Jefferies on Hero MotoCorp
Buy Call, Target Rs 5,650
Q1 EBITDA & Recurring PAT Grew 19-21% YoY But Were 6% Below Estimates
Q1 EBITDA & Recurring PAT Below Est Due To Lower-than-expected ASP & Margin
Volumes Grew 13% YoY (+10% QoQ) But ASP Declined 3% QoQ
Gross Margin Contracted 130 bps QoQ
EBITDA Margin Rose 10 bps QoQ To 14.4% On Operating Leverage Benefit
EBITDA/Vehicle Fell 3% QoQ
Press Release Mentions That Co Has Slew Of Launches In Pipeline In Both EV & ICE Categories
MS on Samvardhana
Overweight Call, Target Raised To Rs 198
Q1 EBITDA Was Largely In-line
With All Acquisitions Closed, Expect Balancesheet To Start Improving
Ramp-up Of Non-auto Biz & Addl Details On Consumer Electronics Business Is Key To Watch
JPMorgan on Samvardhana
Overweight Call, Target Raised To Rs 195
Strong Momentum Across Businesses; Investment In Growth Continues
Q1 Broadly In-line
Maintaining A Healthy Balance Between Leverage, RoCE And Growth Capex
Management Reiterated Their Commitment To Remain <2.5x Net Debt/EBITDA
Raise FY25-27 EPS By 9-19%
Nomura on HDFC Bank
Neutral Call, Target Rs 1,720
Increased Priority Sector Lending (PSL) Requirements To Have Marginal NIM Impact
NIM Improvement Led By Better Funding Mix Remains Key RoA Driver
NIM Improvement Will Come At Cost Of Loan Growth
Balancesheet Course Correction Will Be Gradual
Citi on Voda Idea
Buy Call, Target Rs 22
Q1 Revenues Came In Below Estimates
Subscriber Losses Were Stable
Miss On Subscriber Numbers Was Due To Flat ARPU Vs Expectation Of Slight Improvement
Net Loss Narrowed QoQ, Better Than Our Estimate
Narrow Net Loss Led By Higher Other Income (Following The Equity Raise)
Narrow Net Loss Led By Lower Int Expenses (Reversal & Writeback Of Some Prior Charges)
Macquarie on Apollo Hospitals
Underperform Call, Target Rs 5,040
Q1 Revenue & PAT Largely In-line
Q1 EBITDA Missed Estimate By 6%
Overall, EBITDA Margin Of 13.3% Came Below Estimate Of 14%
CITI on Apollo Hospital
Buy. TP Rs 7670
Reported healthy & in-line qtr
Consol EBITDA stood at Rs6.75bn (+33% YoY) vs Citi est of Rs6.8bn
Hospitals revenue/EBITDA grew by 15% YoY, with flat margins, absorbing costs related to new doctor hiring/marketing exp.
Nifty closed @24,139 (-208) and Sensex @78,956 (-692.9) on Tuesday GIFT Nifty was trading at 24,223 (as of 7:30 am)
FIIs net sold equities in cash to the tune of Rs 2,107 cr whereas DIIs bought equities in cash worth Rs. 1,240 cr on August 13 2024
Spice Jet's Singh eyes Rs 3,000 cr via 10% stake sale
Hero Moto net rises 36% y/y to Rs 1,123 cr in Q1
Natco Pharma consolidated net profit rose 59% y/y in 1QF25 to Rs 668,5 cr.
Apollo Hospitals Enterprise ( AHEL) reported an 83% rise in net profit during the 1QF25 to Rs. 305 cr up from Rs. 167 cr during 1QF24
Piramal Enterprises consolidated net profit fell by 64% y/y to Rs. 181 cr and it saw a 10% y/y growth in total assets under management (AUM) in 1QF25
Godrej Industries Ltd reported an 81% increase in consolidated net profit at Rs 322.5 cr in 1QFY25
ED summons Dabur chief in Religare case
Reliance Walt Disney have offered to sell some channels to win antitrust approval faster for their $8.5 bn India media assets merger but are resisting changes to cricket broadcast rights they own
Gujarat Fluorochemicals consolidated Net Sales fell by 23% y/y at Rs 1,133 cr in 1QF25 the profit fell by 69.58% y/y to Rs 101 cr
Nykaa consolidated PAT rose by 152% y/y to Rs 13.6 cr revenue jumped 23% to Rs 1,746 cr in 1QFY25
An Adani Power power plant allowed to sell Bangladesh bound power in India after an amendment to India's power export rules
Dilip Buildcon standalone net profit grew by 112% y/y to Rs 123.7 cr
Indian ADRs: Wipro (+1.4%), Dr Reddy's (+1.3%) and HDFC Bank (-3.2%)

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