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January 08, 2024

*Top 10 chemical stocks that could benefit from booming EV battery supply chain*
Mint
With the world shifting from fossil fuels and adopting electric vehicles (EVs) at a fast pace, batteries have taken centre stage.
As major automotive markets rapidly embrace EVs, there's a robust demand for batteries, opening vast opportunities for EV battery manufacturers. Companies, big and small, are now diversifying with an eye on the EV battery value chain.
Recent media reports said Vietnam’s EV maker VinFast is set to open its first Indian manufacturing facility to make batteries in Tamil Nadu.
Developments like these where big companies diversify and set up facilities for EV batteries have become common.
So, it should come as no surprise that Indian chemical companies are also vying for a major slice of the pie of the EV battery supply chain.
According to research reports, for manufacturing batteries, massive investment is required towards cathode, anode, electrolytes, among other chemical components.
In this article, let’s look at 10 such top chemical companies that are setting up facilities and investing heavily in the EV battery value chain.
*#1 Himadri Specialty Chemicals*
In December 2023, Himadri Specialty Chemicals announced that it will invest ₹48 billion (bn) over the next 5-6 years to set up a manufacturing facility for lithium-ion battery components.
The company will set up a manufacturing facility for production of lithium battery components with total annual production capacity of 200,000 tonnes, either directly and/or through its subsidiaries.
This move is expected to help in indigenisation of lithium-ion battery raw materials for global and India's EV & energy storage system (ESS).
Currently categorised as a smallcap company, Himadri Specialty Chemicals is transforming into a diversified chemical company with its toes dipped in niche segments.
The company manufactures speciality chemicals used in various sectors, including carbon black, coal tar pitch, and advanced carbon materials.
Shares of Himadri saw a remarkable run in 2023, rising over 200%, all thanks to consistent improvement in financials and because of its foray into the EV battery space.
In the past two years, the company's revenue share for the specialty carbon black segment has improved which has supported its operating profitability.
The company operates the largest coal tar distillation plant in India which gives it an upper hand compared to peers.
In early 2023, the company picked up stake in an Australian startup - Sicona Battery Technologies. Sicona specialises in high-capacity silicon anode technology for lithium-ion batteries used in EVs.
As per its latest investor presentation, Himadri is also in talks with Ministry of Power to apply for the PLI scheme for grid scale batteries.
From all these above developments, you can see how Himadri is making big moves and expanding its product line by developing items for the renewable energy and EV markets.
*#2 Ami Organics*
Second on this list is Ami Organics, one of the leading research and development (R&D) driven manufacturers of speciality chemicals with varied end usage.
Ami Organics is focused on development and manufacturing of advanced pharmaceutical intermediates for regulated and generic APIs, new chemical entities, and key starting material for agrochemical and fine chemicals, especially from the recent acquisition of Gujarat Organics.
Already into semiconductors, Ami Organics is now looking to set up manufacturing facility for electrolytes along with a global manufacturer. The company is also set to sign an MoU with the Gujarat government to set up a dedicated manufacturing facility at a cost of ₹3 bn.
It’s currently focusing on two core products - liquid electrolyte additive to increase the electrolyte capacity of lithium batteries and solid batteries.
Shares of the company have been rangebound for the past couple of months as it’s facing margin pressure due to pricing. Investor sentiment was also dampened as the company delayed in launching a key product in the second quarter of FY24.
Going forward, the company is expecting a stronger performance in both remaining quarters of FY24.
*#3 Aether Industries*
Third on the list is Aether Industries.
It manufactures specialty chemicals. Aether is the sole Indian manufacturer for select chemicals including Phenol (4MEP), 3-Methoxy-2-Methylbenzoyl Chloride (MMBC), among others.
Last month in December 2023, the company entered the electrolyte additives and battery segment by finalising a strategic agreement and contract with a global lithium-ion battery manufacturer.
Under this agreement, Aether will supply specific electrolyte additives.
Aether is leaving no stones unturned and foraying into some new chemical segment as well. It recently signed a licence agreement with Saudi Aramco Tech for converge polyols technology.
The company is also exploring opportunities in fluorination and expects to enter the metal fluoride market.
Companies with this kind of business model usually provide visibility as they sign multiyear contracts which keeps revenue and profitability upbeat.
Shares of Aether Industries came under pressure following a fire incident at one of its facilities, causing damage to the plant and machinery.
Going forward, the management is hopeful of a revival in business as China's dumping reduces and incentives for Chinese manufacturers decrease.
*#4 Neogen Chemicals*
Next on the list is Neogen Chemicals.
It manufactures bromine and lithium-based organic and organo-metallic compounds, used in the pharma, agricultural chemicals, and engineering industries.
The company has been the largest importer of Lithium Carbonate and Lithium Hydroxide for the last 3 decades. Therefore, it has a strong relationship with leading lithium miners and processors across the globe.
Although this company does not directly manufacture EV batteries, it acts as one of the leading raw material suppliers of battery chemicals such as electrolyte and lithium electrolyte salts.
Neogen Chemicals was involved in an agreement with MU Ionic Solutions Corporate, Japan to acquire its manufacturing technology license for electrolytes.
As per the company's recent earnings call, it is planning to set up an electrolyte plant with 30,000 kilo tonnes per annum (KTPA) capacity. Earlier the same was at 10,000 KTPA.
Furthermore, the company will also set up 4,000 tonnes per annum (TPA) which earlier was 1,000 TPA of lithium salt capacity units.
Moreover, the company is quite certain they will start getting orders from 3 to 4 battery manufacturers in CY24. These manufacturers are said to set up approximately 0.5 gigawatts (GW) to 1 GW capacity.
One of its international customers is waiting for its production line to stabilise, post which they will start taking the material (electrolyte).
The company's management is confident about the robust demand for electrolytes for its MU Ionic Solutions Corporation (MUIS), Japan-based capacity.
The company is also preparing itself for the impending boom that we could witness in the next few years in the solid-state batteries segment. Although it is not expected to become significant until 2030, according to its management.
*#5 Tata Chemicals*
Next on the list is Tata Chemicals, an obvious name that you would have thought of while reading this article.
As you would be aware, the Tata group is making a major bet onlithium-ion batteries.
The Sanand plant is Tata Motors' largest manufacturing facility in India. It currently produces a wide range of vehicles which includes the Tiago, Nexon, and Altroz.
The expansion of the Sanand plant will see the addition of a new lithium-ion battery production facility, expected to be operational by as early as 2025.
Tata Chemicals plays an important role in Tata's long-term vision for EV batteries. It was Tata Chemicals that signed a MoU with the government of Gujarat to set up the 20-gigawatt capacity manufacturing unit for lithium-ion cells.
The company has been on investors’ radar ever since the Tata Group signed up a mega US$ 1.6 billion EV battery plant deal to build a gigafactory.
*#6 Gujarat Fluorochemicals*
Next on the list is Gujarat Fluorochemicals, a leading producer of Fluoro-polymers, Fluoro-specialities, chemicals, and refrigerants in India.
It’s one of the top five global players in the fluoropolymers market, exporting to Europe, US, Japan, and Asia.
For the EV battery value chain, the company manufactures batteries using its fluorine chemistry skills for making battery chemicals.
The company has ambitious plans to invest nearly US$1 billion across segments like battery chemicals and green hydrogen, via a subsidiary called GCFL EV Products.
The share price of the company has taken a hit recently due to weak results for the September 2023 quarter.
Its fluorochemical segment was impacted by a drop in exports volume, sluggish demand in Europe and weak domestic market conditions.
However, going forward, the company expects the business environment to pick up and normalise by the end of the financial year.
Thestrong focus of the governments on green hydrogenand hydrogen fuel cells is expected to boost the demand of PTFE and other fluoro-polymers.
Apart from this, the market for fluoropolymers is projected to grow with increasing demand for oil and gas, water treatment, electric appliances, electronics, healthcare, and chemicals as drivers of growth for the short term and medium term.
*#7 Tatva Chintan Pharma*
Next on the list is Tatva Chintan Pharma.
The company operates in a niche space of specialty chemicals and is a globally recognised specialty chemical player with several market-leading products. It’s the largest and only commercial manufacturer of structure-directing agents for zeolites in India (second globally).
For the EV battery value chain, Tatva Chintan is entering the electrolyte solvent space.
The solvents that Tatva Chintan makes are used for sudden burst of energy, which is required during start and while accelerating a vehicle.
As things stand now, the company’s electrolyte salt segment has seen a decline in revenue due to completion of debottlenecking activities at a customer's plant.
However over the next two years, the company is expecting significant growth in revenue and margins on account of launching new products and a subsequent increase in volumes.
The company’s products are used not just in EVs but more such emerging trends such as transport and infrastructure, renewable energy, consumer electronics, grid balancing and others.
*#8 Balaji Amines
Next on the list is Balaji Amines.*
The company is a leading manufacturer of aliphatic amines and a leader in oligopolistic amines.
It is also the sole producer of certain speciality chemicals catering to the pharmaceuticals (51% of total revenues), agrochemical sector (26%) and others (23%), such as paints, oil and gas, etc.
This leadership status across an array of speciality chemicals catering to India and other countries has helped the company diversify its business.
Towards the EV battery supply chain, Balaji Amines acts as the only manufacturer of Di methyl carbonate (DMC) in India. It is an import substitute for making Polycarbonate (high strength polymers).
DMC finds applications in Li batteries (solvent), allowing Balaji Amines to enter a new area of application in EV industry. The DMC plant started operations in September 2022.
In 2023, the company’s stock witnessed a major roadblock owing to several reasons including but not limited to multiple resignations, delay of IPO plans by its subsidiary, and declining sales owing to competition from China.
The company’s management is optimistic of future growth as chemical prices have hit rock bottom and because the company has planned multiple capital expenditures.
The company is undertaking a massive capex to better plan utilization and to launch new products.
With revenue from the new commenced plants such as DMC, PG, Ethylamines to contribute in the coming quarters, the company expects margin profile to improve going forward.
*#9 PCBL*
Next on the list is PCBL, erstwhile known as Philips Carbon Black.
Part of the RP‑Sanjiv Goenka Group, the company is into the production of carbon black and generation of electricity for the purpose of captive consumption, and sale of the surplus.
Being a key player in the carbon black market for lithium-ion batteries, PCBL is currently working on commercialising carbon black specifically tailored for lithium-ion batteries.
Shares of the company recently got a boost after a rating agency came out with a report stating that demand for carbon black for lithium-ion batteries is expected to increase from the current 20,000 tons per annum (TPA) to an impressive 84,000 TPA by calendar year 2030.
In 2023, PCBL shares gained over 100%, delivering multibagger returns to shareholders.
PCBL recently forayed into the non-carbon black space through the acquisition of Aquapharm Chemicals for ₹38 bn.
It also announced a joint venture (JV) agreement with Kinaltek Pty, Australia, wherein PCBL will own 51% of the shareholding and invest around ₹1.3 bn.
Apart from this, it has committed to invest over ₹2 bn over the next two years for setting up a manufacturing facility for nano silicon technology for batteries.
All these factors indicate that the company is making serious efforts in the EV battery value chain.
*#10 Pondy Oxides Chemicals*
Last on this list is Pondy Oxides.
Pondy Oxides is in the production of lead and lead alloys and PVC additives. Its customers are mainly battery manufacturers and chemical manufacturers.
The company also has a presence in metals, metallic oxides, PVC stabilizers, and lead acid batteries.
Towards the EV battery value chain, the company is exploring lithium-ion recycling technology. It plans to introduce new recycling verticals in lithium-ion and e-waste segment.
Additionally, the company plans to introduce new segments, organically or inorganically, such as plastics (in-house and industrial), e-waste, lithium-ion recycling, rubber, oil, glass, paper, and value-added products.
It has undertaken a capex of around ₹1 bn in plant and machinery to double lead capacity. By financial year 2025, Pondy Oxides is targeting a revenue of ₹20 bn, up from ₹14.8 bn in FY23.
*In Conclusion*
The role of EV batteries in India's clean energy transition is getting hyped day by day.
It has become obvious that lithium-ion and EV batteries are essential components of India's ambitious goals. We need more Indian companies building EV batteries, lithium-ion batteries, and its components.
Local governments can play a crucial role in supporting their battery industry by providing regulatory clarity. They can also help by investing more in infrastructure, offering tax incentives, promoting education and research, collaborating with industry, and supporting entrepreneurial initiatives.
All of this will help ensure a resilient supply chain, promote economic vitality, and maintain technology leadership in this rapidly growing industry.
_*ECONOMY PARADOX*_
_*1A. If interest rate goes up:* “How the poor could afford a house, car for themselves?”._
_*1B. If interest rate comes down* “How will elders earn interest from the bank?"._
_*2A. If foreigners invest in our country:* “They are taking away our wealth as profits/dividends”._
_*2B. If domestic Co. invest outside:* “Our wealth shifts for the development of outsiders”._
_*3A. If tax rates are increased:* “The Govt is robbing people”._
_*3B. If tax rates are lowered:* “The Govt is trying to help the rich"._
_*4A. If GDP grows*: “The Govt is working primarily for the big corporates”._
_*4B. If GDP contracts*: “There is no job creation”._
_*5A. If currency strengthens*: “Our exports get impacted”._
_*5B. If currency weakens*: “Our import bill has gone up”._
_*6A. If Food prices go up:* “Masses are suffering"._
_*6B. If Food prices come down:* “Farmers are suffering”._
_*7A. If stock market comes down:* “The economy is in a mess”_
_*7B. If stock market goes up:* “It’s not a true measure of economy; only corporates are being supported”._
_*8A. If Corporate tax rates are increased:* “Govt is penalizing private enterprise"._
_*8B. If Corporate tax rates are cut:* “The Govt is only trying to boost the profitability of corporates”._
_*So, Heads, I win, Tails, you lose..*_
*India Daybook – Stocks in News*
*ONGC:* Company has started first oil production from the KG-DWN-98/2 block. (Positive)
*JSW Steel:* JSW Utkal Steel receives environmental clearance for setting up of a greenfield Integrated Steel Plant of 13.2 MTPA crude steel (Positive)
*JK Cement:* Wholly Owned Subsidiary JK Maxx Paints Acquires remaining 20% stake of Acro Paints for Rs 53.31 Crores (Positive)
*Oil India:* Board Approves Incorporation of a Wholly Owned Subsidiary of the Company for Green Energy Business (Positive)
*Union Bank:* Domestic Deposits Up 3.05% QoQ, Domestic Advances Up 5.51% QoQ (Positive)
*Godrej CP:* Organic business delivered steady underlying volume growth of mid-single digit (Positive)
*Narayana Hrudalaya:* Company’s wholly owned subsidiary Narayana Health Insurance granted License by IRDA (Positive)
*Titan:* Registered Revenue Growth of 22% YoY (Positive)
*Star Health:* December Premium up 14% YoY. (Positive)
*NIACL:* December Premium up 14% YoY. (Positive)
*ICICI Lombard:* December Premium up 20% YoY. (Positive)
Recently-listed IREDA, Cello_World, Honasa_Consumer_ and Signature_Global are among the top contenders likely to make it to the MSCI Smallcap index. (Positive)
*Bajaj Auto:* Board To Consider Buyback On January 8, Monday. (Positive)
*Chambal:* Board To Consider Buyback On January 8, Monday (Positive)
*Cipla:* Company signs JV pact with Kemwell Biopharma UK & MNI Ventures, Mauritius for incorporation of a joint venture company in USA. (Positive)
*Satin Credit:* Enters into co-lending agreement with Karnataka Bank (Positive)
*FIEM:* To consider and approve /recommend issuance of Bonus Shares (Positive)
*Cupid:* Along with Results Board To Consider Stock Split & Bonus Issue of Shares on 23rd January. (Positive)
*Jupiter Wagons:* Company has received a contract worth Rs 100 crore from one of the leading automobile manufacturers for the manufacturing and supply (Positive)
*TVS Motor:* Signs MoU with Government of Tamil Nadu to invest ₹5,000 crore in five years. (Positive)
*REC, RVNL:* Sign Memorandum of Understanding to finance up to Rs 35,000 crore for infrastructure projects. (Positive)
*Bank Baroda:* Domestic Deposits Down 0.62% QoQ, Domestic Advances Up 3.18% QoQ (Neutral)
*Godrej Ind:* Signs a Non-binding MoU with the Government of Gujarat for investment upto Rs 600 crore (Neutral)
*Medplus:* Gets Order For Suspension Of Drug Licence For 6 Days For Store located at Shankarayapally Jadcherla (Neutral)
*Shreyas Shipping:* Company’s vessel M.V. SSL Brahmaputra reported fire in the Engine Room (Neutral)
*M&M:* Zoomcar Inc ceased to be an associate company, following the completion of a merger between Zoomcar Inc (Neutral)
*Shyam Metaliks:* Board approves issue of 2.4 Crore Shares to 38 Qualified Institutional Buyers at Rs 576/ Share (Neutral)
*Federal Bank:* RBI asks Bank to submit a fresh proposal containing a panel of at least 2 fresh names for appointment as MD & CEO of the Bank (Neutral)
*Tata Steel:* India Production Volume at 5.32 Million Tons, Up 6.4% YoY & 6% QoQ (Neutral)
*Adani Wilmar:* Standalone sales declined 15% year-on-year, volumes increased by 6% year-on-year. (Neutral)
*Dr Reddy:* Company recalls over 8,000 bottles of generic drug in US due to packaging error (Neutral)
*NTPC:* Company gets tax demand order of Rs 41.8 cr from Bihar GST department (Neutral)
*Nykaa:* There Has Been Some Impact On Discretionary Consumption Due To Short-term Pressures. (Negative)
*Marico:* Domestic volumes grew in low single digits on a YoY basis (Negative)
*Macquarie on financials*
Expect banks' earnings to slowdown in FY25E (vs FY24E)
ROAs have peaked for PSU Banks & can decline to 80bps in the next 2 years
For NBFCs, EPS cuts are larger as growth/margins decline & credit costs normalize
Prefer large private banks given compounding opportunities & lower valuations
Remain cautious on life insurance, PSU banks, & Fintechs
*Pecking order* 1. Large pvt banks > 2. Housing financiers > 3. Vehicle financiers > 4. Insurance companies > 5. Consumer financiers > 6. PSU Banks > 7. Fintechs
*Top picks:* Banks: HDFC Bank & IndusInd Bank; NBFCs: Shriram Finance & LIC HF
*Stock Actions*
Upgrade Axis Bank to O-P from Neutral; TP raised to Rs 1300 from Rs 900 (Only upgrade)
Downgrade SBI to Neutral; TP cut to Rs 615 from Rs 720
Downgrade Bank of Baroda to Underperform from Neutral; TP 180
Downgrade SBI Card to Neutral from O-P, TP cut to Rs 760 from Rs 1030
Downgrade Bajaj Finance to Neutral from O-P; TP cut to Rs 8100 from Rs 9190
Downgrade CIFC to Neutral from Outperform; TP cut to Rs 1140 from Rs 1285
Downgrade LIC India to Neutral from Outperform after recent sharp rally, TP Rs 850
*CLSA on Sula*
Upgrade to Buy, TP Raised to Rs 863 from Rs 571
Reinstatement of subsidy should shift focus to vol opportunity
Mah Govt. reinstated subsidy on wines produced & sold in Mah for 5 more yrs
Raise FY24-26 est. by 0%-4%
*CLSA on Cement sector*
Key themes for 2024
1) Demand growth is taking a breather
2) Capacity expansion to remain strong3
3) Cost tailwinds to play out further
Adani group Organic expansion key to watch
*Downgrade Ambuja to SELL , TP raised to Rs 490*
Downgrade ACC to Underperform, TP raised to Rs 2430
Upgrade Shree Cement from Sell to U-P, TP raised to Rs 27200
*Dalmia & Ultratech preferred picks*
*MS on BOB*
EW, TP Rs 240
Domestic loan growth improved (3.3% QoQ)
& led by domestic retail (5%, steady vs. last qtr).
Overseas loans declined by 1% vs. +6% last qtr
Domestic deposits declined by 1% QoQ, partly led by shedding of bulk deposits to optimize costs
*UBS on L&T*
Buy, TP raised to Rs 4400 from Rs 3600
Investor concern about increasing exposure to Middle East unwarranted
Believe L&T's strong order cycle and robust execution should lift margins
At 1.0x PEG, believe L&T is attractive, raise core PE from 26x to 30x
*HSBC on Titan*
Buy, TP Raised to Rs 4200
3Q FY24 jewellery sales grew strongly at 23% yoy (c21% 4-yr CAGR), ahead of consensus expectations
Other divisions did well too (up 21-24% yoy) except EyeCare (down 3% yoy); opened 18 new Tanishq stores in India in 3Q
*MS on Titan*
EW, TP Rs 3190
Strong jewellery demand trends with 20%+ growth for 4th qtr in a row, vs general sluggishness in discretionary demand
Co's strategy of regular gold exchange programs is working out favourably
*CITI on Kalyan Jewellers*
Buy, TP Rs 440
Strong rev growth & store expansion momentum continues
India operations recorded 40% YoY growth in rev
Management expects to add 15 ‘Kalyan’ stores in India, 2 ‘Kalyan’ stores in ME & 13 ‘Candere’ stores during 4QFY24
*HSBC on Kalyan Jewellers*
Buy, TP Rs 400
Consol sales rose 33% y-o-y in 3Q, driven by strong domestic sales (c40% y-o-y), beating expectations
Opened 22 net new Kalyan showrooms in 3Q
Asset-light network expansion has started to deliver consistent results
*MS on GCPL*
OW, TP Rs 1072
Organic volume growth and constant-currency sales growth trends were similar to F2Q levels, but currency devaluation in Africa and LATAM affects reported INR growth.
EBITDA margins (including forex) to expand YoY, despite higher A&P spends
*CLSA on GCPL*
Sell, TP Rs 936
Reported flat sales growth at a consol level
Organic sales growth saw a low single-digit decline at a consolidated level, largely due to currency impact from the overseas business.
Domestic volumes were in line with expectations
*Macquarie on financials*
Expect banks' earnings to slowdown in FY25E (vs FY24E)
ROAs have peaked for PSU Banks & can decline to 80bps in the next 2 years
For NBFCs, EPS cuts are larger as growth/margins decline & credit costs normalize
Prefer large private banks given compounding opportunities & lower valuations
Remain cautious on life insurance, PSU banks, & Fintechs
*Pecking order* 1. Large pvt banks > 2. Housing financiers > 3. Vehicle financiers > 4. Insurance companies > 5. Consumer financiers > 6. PSU Banks > 7. Fintechs
*Top picks:* Banks: HDFC Bank & IndusInd Bank; NBFCs: Shriram Finance & LIC HF
*Stock Actions*
Upgrade Axis Bank to O-P from Neutral; TP raised to Rs 1300 from Rs 900 (Only upgrade)
Downgrade SBI to Neutral; TP cut to Rs 615 from Rs 720
Downgrade Bank of Baroda to Underperform from Neutral; TP 180
Downgrade SBI Card to Neutral from O-P, TP cut to Rs 760 from Rs 1030
Downgrade Bajaj Finance to Neutral from O-P; TP cut to Rs 8100 from Rs 9190
Downgrade CIFC to Neutral from Outperform; TP cut to Rs 1140 from Rs 1285
Downgrade LIC India to Neutral from Outperform after recent sharp rally, TP Rs 850
*CLSA on Sula*
Upgrade to Buy, TP Raised to Rs 863 from Rs 571
Reinstatement of subsidy should shift focus to vol opportunity
Mah Govt. reinstated subsidy on wines produced & sold in Mah for 5 more yrs
Raise FY24-26 est. by 0%-4%
*CLSA on Cement sector*
Key themes for 2024
1) Demand growth is taking a breather
2) Capacity expansion to remain strong3
3) Cost tailwinds to play out further
Adani group Organic expansion key to watch
*Downgrade Ambuja to SELL , TP raised to Rs 490*
Downgrade ACC to Underperform, TP raised to Rs 2430
Upgrade Shree Cement from Sell to U-P, TP raised to Rs 27200
*Dalmia & Ultratech preferred picks*
*MS on BOB*
EW, TP Rs 240
Domestic loan growth improved (3.3% QoQ)
& led by domestic retail (5%, steady vs. last qtr).
Overseas loans declined by 1% vs. +6% last qtr
Domestic deposits declined by 1% QoQ, partly led by shedding of bulk deposits to optimize costs
*UBS on L&T*
Buy, TP raised to Rs 4400 from Rs 3600
Investor concern about increasing exposure to Middle East unwarranted
Believe L&T's strong order cycle and robust execution should lift margins
At 1.0x PEG, believe L&T is attractive, raise core PE from 26x to 30x
*HSBC on Titan*
Buy, TP Raised to Rs 4200
3Q FY24 jewellery sales grew strongly at 23% yoy (c21% 4-yr CAGR), ahead of consensus expectations
Other divisions did well too (up 21-24% yoy) except EyeCare (down 3% yoy); opened 18 new Tanishq stores in India in 3Q
*MS on Titan*
EW, TP Rs 3190
Strong jewellery demand trends with 20%+ growth for 4th qtr in a row, vs general sluggishness in discretionary demand
Co's strategy of regular gold exchange programs is working out favourably
*CITI on Kalyan Jewellers*
Buy, TP Rs 440
Strong rev growth & store expansion momentum continues
India operations recorded 40% YoY growth in rev
Management expects to add 15 ‘Kalyan’ stores in India, 2 ‘Kalyan’ stores in ME & 13 ‘Candere’ stores during 4QFY24
*HSBC on Kalyan Jewellers*
Buy, TP Rs 400
Consol sales rose 33% y-o-y in 3Q, driven by strong domestic sales (c40% y-o-y), beating expectations
Opened 22 net new Kalyan showrooms in 3Q
Asset-light network expansion has started to deliver consistent results
*MS on GCPL*
OW, TP Rs 1072
Organic volume growth and constant-currency sales growth trends were similar to F2Q levels, but currency devaluation in Africa and LATAM affects reported INR growth.
EBITDA margins (including forex) to expand YoY, despite higher A&P spends
*CLSA on GCPL*
Sell, TP Rs 936
Reported flat sales growth at a consol level
Organic sales growth saw a low single-digit decline at a consolidated level, largely due to currency impact from the overseas business.
Domestic volumes were in line with expectations

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