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February 08, 2024

*MS on Britannia*
Overweight Call, Target Rs 5,243
Volume Growth Improved To 5.5% In Q3
Volume Growth As Management Took A 2-2.5% Price Cut During The Quarter
Management Remained Focused On Driving High-single-digit To Low-double-digit Vol Growth
*Jefferies on JB Chem*
Buy Call, Target Rs 2,000
Q3FY24 Sales/EBITDA/PAT Were In-line
Domestic Business Delivered Strong Performance With 14% YoY Growth
CDMO Sales Declined 7% YoY, But Mgmt Guided For Run Rate To Rebound In Q4
EBITDA Margin Improved QoQ As Lower RM Prices Were Reflected In The Quarter
Mgmt Guided For FY25 Margins At 25-27%
*Macquarie on Uno Minda*
Neutral Call, Target Rs 679
Q3 Saw Revenue Of Rs 3,520 Cr, Up 21% YoY, In-line
EBITDA At `380 Cr Grew 12% YoY & Was A Marginal 1% Below Est
EBITDA Margins Declined YoY At 10.8%, Marginally Below Est At 11%
PAT Which Included Share Of Associates Grew 19% YoY To Rs 190 Cr
Net Debt Increased Marginally To `1,290 Cr On Back Of Ongoing Growth Capex
*HSBC on Nestle*
Hold, TP Rs 2550
Q4CY23 domestic sales grew by 8.9% y-o-y, largely in line with est., but sales growth has moderated sequentially
While margin expansion led to an earnings beat, this was last qtr of a benign base; earnings growth to moderate now
*Macquarie on Nestle*
Neutral, TP Rs 2500
4Q EBITDA broadly in line as gross margin beat was offset by higher other expenses (likely marketing spend).
Raise CY24/25 EPS 1%
See limited room for upside at current valuation (63x CY25E EPS)
*MS on Trent*
EW, TP raised to Rs 3675
3Q beat on top line & margins
Believe unchartered execution on growth & profitability in F24 increases conviction in sustainability of growth, leading to upward earnings revisions
Management commentary: Biz performance & growth momentum encouraging to continue with expansion agenda
*Jefferies on Trent - We got this completely wrong*
HOLD, TP Rs3500 from Rs3050
We sharply raise EPS forecasts again - admittedly, we underestimated the ramp-up in Zudio as well as mgmt execution
We raise our FY24-26 EPS by 17-21% as we build in higher growth and margins
The valuation keep us on the bay - maintain Hold
Trent continues to surprise on the positive with significantly better than expected performance during 3QFY24
Overall revenue growth came impressive on a normal base
However, Ebitda margin came at an eight quarter high, partially led by better GM
Consol GM saw a healthy ~90bps YoY increase to 44.1%, despite higher share of Zudio revenues (lower GM vs Westside), and was much better than estimates
Zudio revenues more than doubled YoY on the back of ~40% YoY store adds and ~40% YoY growth in per-store revs. Zudio per-sqft rev is c.1.5x that of Westside and overall revenue pool is 1.3x, on our calculations. Zudio has a presence across 139 cities, with more than 4mt sqft of retail space across 460 stores.
*Macquarie on Lupin*
O-P, TP Rs 1530
3Q: All-round beat; Rev /EBITDA/PAT beat est. by 5%/23%/55%
NA rev flat QoQ & grew 20% YoY in CC to $212m
India formulations rev grew 13% YoY
EMEA & RoW rev grew 36% & 26% YoY
API biz revenue remained flat YoY
*UBS on HDFC BK*
Buy, TP Rs 1900
Non deal road show takeaways
1) Continued high focus on asset quality, profitable biz & market share gains in that order,
2) Growth in core profitable biz likely to remain faster than industry
3) Margin should gradually improve
4) Branch expansion to continue at 10-20% on a rolling 12M basis,
5) not targeting any loan growth number in near term, however plans to keep gaining market share over medium term
*CITI on Infosys*
Neutral, TP Rs 1685
Management meet takeaways
Intends to provide more clarity on outlook in April earnings call – by then, there should be better visibility into client budgets as well.
Client sentiment hasn’t changed much so far
Wants to be at top quartile on both growth & margins – management compensation is also designed with that in mind.
*MS on Tata Cons*
OW, TP Rs 1305
Top line better than MSe across all three segments.
Reported strong improvement in margins led by India branded F&B business.
Growth businesses rose at 42% YoY & their share in India branded business rose to 17% vs. 13% in F3Q23
*CLSA on Power Grid*
O-P, TP raised to Rs 285
Key message from 3Q is that it has gained share in new bids in a much bigger market, driving its TBCB revenue win 68% YTD.
Its rec. PAT grew 6% YoY in 3QFY24
Expect its (RAC) equity Cagr to accelerate to 4% over FY24-26
*HSBC on Tata Chem*
Downgrade to hold, TP cut to Rs 860 from Rs 1140
Soda ash fundamentals weaken & previously exceptional margins normalise; expect a brief period of rebalancing
Like Co for its strong market positioning, FCF generation, & capacity expansion supporting growth
*Nomura on AIA ENg*
Downgrade to Reduce, TP Rs 3830
Weak realizations owing to unfavorable mix; EBITDA/kg at Rs42, -18%/-15% y-y/q-q
Delay in customer acquisitions impacting vol uptick
HCMI penetration in mining industry at 20%; growth to come from metals
Trading at 33.5x FY25F EPS
*BoFA Sec on Manappuram*
Buy, TP Rs 212
Beat on higher yields, strong fee income; growth pick up in 4Q
Co remains confident of delivering on 8-10% growth for gold biz in FY24 (YTD at 5.1%)
In MFI biz, CE across key states (Bihar, Rajasthan) is yet to improve
*MOSL on Manappuram*
Buy, TP Rs 230
In-line earnings; NIM expansion aided by higher yields
Gold AUM growth remained muted, expected to recover in 4Q
Co said it has answered all queries from SEBI & expects to receive approval for Asirvad MFI’s IPO soon
*India Daybook – Stocks in News*
*Lupin:* Net Profit at Rs 613 crore versus Rs 153 crore, Revenue at Rs 5197.0 crore versus Rs 4322.0 crore (YoY) (Positive)
*Cummins:* Net Profit at ₹454.9 crore versus Poll of ₹351 crore, Revenue at Rs 2534.0 crore versus Rs 2180.0 crore (YoY) (Positive)
*Kalpataru:* Net Profit at Rs 144 crore versus Rs 109 crore, Revenue at Rs 4896.0 crore versus Rs 4004.0 crore (YoY) (Positive)
*Centum Electronics:* Net Profit at Rs 7.2 crore versus loss Rs 9.7 crore, Revenue at Rs 288.0 crore versus Rs 189.0 crore (YoY) (Positive)
*Mindteck:* Net Profit at Rs 7.2 crore versus Rs 5.5 crore, Revenue at Rs 95.8 crore versus Rs 82.7 crore (YoY) (Positive)
*Manappuram:* Net Profit at Rs 575 crore versus Rs 393 crore, Revenue at Rs 2305 crore versus Rs 1715.0 crore (YoY) (Positive)
*Apollo Tyre:* Net Profit at Rs 497 crore versus Rs 279 crore, Revenue at Rs 6595.0 crore versus Rs 6423 crore (YoY) (Positive)
*Supriya Life:* Net Profit at Rs 30.0 crore versus Rs 10.0 crore, Revenue at Rs 140.0 crore versus Rs 105.0 crore (YoY) (Positive)
*EPL:* Net Profit at Rs 94 crore versus Rs 64 crore, Revenue at Rs 975 crore versus Rs 945.0 crore (YoY) (Positive)
*Jamna Auto:* Net Profit at Rs 55.0 crore versus Rs 41.0 crore, Revenue at Rs 604.0 crore versus Rs 591.0 crore (YoY) (Positive)
*Gandhi Special Tubes:* Net Profit at Rs 13.2 crore versus Rs 9.6 crore, Revenue at Rs 41.2 crore versus Rs 36.7 crore (YoY) (Positive)
*SH Kelkar:* Net Profit at Rs 32.1 crore versus Rs 10.1 crore, Revenue at Rs 474.0 crore versus Rs 371.0 crore (YoY) (Positive)
*Nila Spaces:* Net Profit at Rs 11.6 crore versus loss Rs 1.4 crore, Revenue at Rs 66.0 crore versus Rs 0.6 crore (YoY) (Positive)
*Hindustan Glass:* Net Profit at Rs 44.6 crore versus loss Rs 7.6 crore, Revenue at Rs 617 crore versus Rs 589 crore (YoY) (Positive)
*Zodiac:* Net Profit at Rs 2.9 crore versus Rs 1.1 crore, Revenue at Rs 46.9 crore versus Rs 24.9 crore (YoY) (Positive)
*Sreechem:* Net Profit at Rs 2.2 crore versus loss Rs 0.5 crore, Revenue at Rs 20.0 crore versus Rs 8.8 crore (YoY) (Positive)
*Welspun Ent:* Company has been declared as L1 bidder by the Brihanmumbai Municipal Corporation for Development of new 2,000 MLD Water Treatment Plant. (Positive)
*IRB Infra:* January Toll collections jumped by 25 percent to Rs 467 crore (Positive)
*Inox India:* Signed an MOU with IUAC for development of superconducting magnet-based systems (Positive)
*Inox Wind:* Company enters into an agreement with CESC for installation of 1,500 MW of wind capacity (Positive)
*IGL:* Company signs MoU to establish CBG plants across Delhi, Haryana, Rajasthan, Uttar Pradesh. (Positive)
*Max Life:* January Premium growth 50.99 percent YoY (Positive)
*SBI Life:* January Premium growth 102.9 percent YoY (Positive)
*LIC:* January Premium growth 23.7 percent YoY (Positive)
*ICICI Lombard:* January Premium growth 14.4 percent YoY (Positive)
*Star Health:* January Premium growth 18.3 percent YoY (Positive)
*Kalyani Steels:* Company is declared successful bidder for Kamineni Steel (Positive)
*Ashoka Buildcon:* Company secures a Letter of Award from NHAI for a Bihar highway project, with a contract value of Rs. 520.00 Crore. (Positive)
*KEC Int:* Bags new orders worth Rs 1,175 Cr across various businesses. (Positive)
*ONGC:* Company in Joint Venture pact with NTPC Green for renewable energy. (Positive)
*Mangalore Chemicals:* Company announces merger with Paradeep Phosphates, arbitrage implies 18% upside. (Positive)
*Tata Comm:* Company collaborates with Microsoft for voice calling on Microsoft Teams. (Positive)
*HUL:* Company appoints Srinandan Sundaram, as Executive Director, Home Care with effect from 1st April, 2024 (Positive)
*SJVN:* Company gets Letter of Intent from GUVNL for 200 MW Solar Project (Positive)
*PSP Projects:* Company gets Letter of Intent for order worth of Rs 935 crore (Positive)
*NTPC:* Company looks to raise up to $750 million in debt from foreign investors. (Positive)
*BPCL:* Company’s JV PLL renews 20-yr partnership for 7.5 MMTPA LNG with Qatar Energy (Positive)
*Action Construction:* Company to purchase Rs 82 crore land for expansion (Positive)
*Aarti Pharma:* Net Profit at Rs 52.8 crore versus Rs 47.7 crore, Revenue at Rs 448 crore versus Rs 471 crore (YoY) (Neutral)
*TBZ:* Net Profit at Rs 21.4 crore versus Rs 20.6 crore, Revenue at Rs 740 crore versus Rs 812 crore (YoY) (Neutral)
*GIC RE:* Net Profit at Rs 1618 crore versus Rs 1199 crore, Revenue at Rs 7758 crore versus Rs 8649 crore (YoY) (Neutral)
*Fortis:* Net Profit at Rs 134 crore versus Rs 142 crore, Revenue at Rs 1680 crore versus Rs 1560 crore (YoY) (Neutral)
*JK Paper:* Net Profit down 29.1% at ₹236.4 cr vs ₹333.5 cr, Revenue up 2.7% at ₹1,781.7 cr vs ₹1,734.5 cr (YoY) (Neutral)
*Tata Consumer:* Net Profit at ₹301.5 cr vs Poll of ₹350 cr, Revenue at ₹3,803.9 cr vs Poll of ₹3,800 cr (Neutral)
*Monte Carlo:* Net Profit at Rs 77 crore versus Rs 86 crore, Revenue at Rs 504 crore versus Rs 520 crore (YoY) (Neutral)
*Ashoka:* Net Profit at Rs 110 crore versus Rs 138 crore, Revenue at Rs 2657 crore versus Rs 1956 crore (YoY) (Neutral)
*Piramal Pharma:* U.S. FDA concludes pre-approval inspection of U.S.-based facility with 3 observations. (Neutral)
*Mankind:* Promoter entity to sell 1.62% stake in Mankind Pharma via block deal: Sources (Neutral)
*ICICI Pru Life:* January Premium growth 8.71 percent YoY (Neutral)
*HDFC Life:* January Premium growth 2.13 percent YoY (Neutral)
*Sobha:* Net Profit down 52.5% at ₹15.1 cr vs ₹31.8 cr, Revenue down 21.1% at ₹684.9 cr vs ₹868.1 cr (YoY) (Negative)
*Borosil:* Net loss at Rs 16 cr vs Rs 6 cr, Revenue at Rs 330 cr vs Rs 246 cr (YoY) (Negative)
*GNFC:* Net Profit at Rs 97 cr vs Rs 326 cr, Revenue at Rs 2088 cr vs Rs 2673 cr (YoY) (Negative)

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