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March 12, 2024

*India Daybook – Stocks in News*
*ICICI Lombard:* Gross Direct Premium up 38.6%, April-February market share up 35 bps (Positive)
*Auro Pharma:* Company says acceptance of compliance with WHO GMP by who prequalification unit inspection services team (Positive)
*Pitti Engineering:* Company signs definitive agreement to acquire Bagadia Chaitra Industries at ₹124.92 crore (Positive)
*Astrazeneca Pharma:* Company and mankind pharma partner to accelerate access to asthma medicine for patients in India (Positive)
*Venus Remedies:* Company secured good manufacturing practices approval from UNICEF. (Positive)
*Wipro:* Company expands partnership with Nutanix to launch new Nutanix business unit (Positive)
*RVNL:* Company emerges lowest bidder for Maharashtra Metro Project worth ₹339.23 crore (Positive)
*Vardhman Poly:* Board meeting on March 28 to consider and approve sub-division/ split of shares (Positive)
*Suven Pharma:* Company has announced a proposed merger with Cohance life sciences (Positive)
*HG Infra:* Company gets letter of intent worth Rs 862 crore from NHAI for project in Andhra Pradesh (Positive)
*JWL:* Company gets order worth Rs 957 crore from the Ministry Of Railways for manufacturing and supply of BOSM Wagons (Positive)
*HIL:* Company has signed an agreement with Crestia Polytech for the acquisition of Topline at an enterprise value of ₹265 crore. (Positive)
*ITC:* British American Tobacco (BAT) is planning to sell up to $2-3 billion of ITC in block trades this week. (Neutral)
*ITC:* Company acquires share of Sproutlife Foods for Rs 50 cr (Neutral)
*AB Capital:* Company approved scheme of amalgamation of unit aditya birla finance with co. (Neutral)
*Canara Bank:* Revises one year MCLR to 8.9% from 8.85%. (Neutral)
*Info Edge:* IT & BPO hiring trends down YoY & but decline less than Jan 2024 (Neutral)
*PFC:* Board declares third interim dividend of Rs 3/share. (Neutral)
*ESAF Small:* The board approved the proposal to raise funds upto Rs 135 crore by Bonds. (Neutral)
*M&M:* February production up 26.1% at 73,380 units vs 58,203 units (Neutral)
*Adani Ent:* Subsidiary will begin the survey to collect data from lakhs of informal tenement residents of dharavi to determine eligibility criteria on 18 Mar 2024 (Neutral)
*KEI Industries:* Board approves interim dividend of Rs 3.5/share (Neutral)
*Star Health:* Company's revenue grows 19% year-on-year in February. (Neutral)
*NIACL:* Company's revenue grows 4% year-on-year in February. (Neutral)
*KFin Tech:* Kotak Bank to sell 2% stake in co via block deals, Kotak Bank looking to sell upto 34.7 lac shares worth Rs 218 crs (Neutral)
*Indigo:* Rakesh Gangwal pares stake in company for Rs 6,785 crore through open market transactions. (Neutral)
*MS on Gas Sector*
Expect gas market oversupply to reach multi-decade highs over coming yrs
It will inflect demand esp. in India & Southeast Asia & save $10bn in energy costs through 2030 with energy consumption rewiring back in favour of gas for region.
Gas accelerates renewable adoption and also partly solves policymaker trilemma of supporting AI adoption and decarbonisation at affordable prices.
GAIL – OW, TP Raised to Rs 213.
*HSBC on Adani Ports*
Buy, TP Raised to Rs 1560 from Rs 1370
Robust throughput growth continued in Feb 2024, implying co on track to beat its 400MMT target for FY24
Raise EBITDA forecasts by 1-4% for FY24-26e
Expect a 19% CAGR in EBITDA in FY23-26e & ROIC to rise to 16% in FY26e.
*MOSL on Adani Ports*
Buy, TP raised Rs 1600
Well positioned to surpass revised guidance of FY24
Logistics business continues to do well, with YTD rail volume up 21% YoY in FY24
Increase vol est. by 2-3% for FY24-26 & target multiple to 17x EV/EBITDA (earlier 16x)
*Jefferies on AB Capital*
Buy, TP Raised to Rs 225
AB Cap proposes to merge its wholly owned NBFC subsidiary, ABFL with itself, subject to regulatory approvals
If approved, scheme will simplify
1) corp. structure;
2) resolve issue of mandatory listing of ABFL
3) lift CRAR by 150bps
*MS on AB Capital*
EW, TP Rs 196
ABCL, a non-operating holdco, announced a reverse merger of its NBFC subsidiary with itself
Tangible economic benefit is not material
However, can lower holdco disc if NBFC were to list by Sep-25
RBI approval is key
*HSBC on Zomato*
Buy, TP raised to Rs 200
Advt. rev will remain cornerstone of quickcommerce (Blinkit) biz in long term
Expect digital spend share to increase in India &, within that, platforms to gain share thereby helping Blinkit
Expect Blinkit ad rev to be c3% of total digital ad-spend of India in 5 years, which is around 5% EBITDA margins
*Jefferies on IndiaMart*
Buy, TP Rs 3400
Post-Initiation Investor Feeback
Investors indicate concerns around execution challenges, slowing subscriber additions, and SaaS investments.
However, investors agreed with Indiamart's structural growth potential & moats
Expect paid subs additions to pick up from 3k/quarter in FY24E to 6k/ quarter in FY25E, which should support valuations
Expect Indiamart to deliver strong 19%/25% rev/EPS Cagr over FY24-26E
*Kotak Inst Eqt on Tata Chem*
Sell, TP Rs 780
Recent news reports that Tata Sons is evaluating options to avoid an IPO should deflate speculation around value-unlocking
Continue to expect EPS to fall by about 2/3 over FY2023-25E amid falling margins on soda ash

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