One year since the change of guards at Bombay House, the street is abuzz with rumors of restructuring and pulling up of underperformers in the group. Some of it is beginning to take shape.
This statement comes from the person who was making all the noise that resulted in a complete revamp of the board and an unhappy ending to the tenure of CEO Vishal Sikka, a man handpicked by Murthy himself.
While in the past they have had a signaling impact for impending economic slowdown, we feel factors governing this business cycle and impact of global central bank’s monetary policy may make the reading different this time.
The company’s long-term structural growth story remains intact in India’s consumption space owing to its steady fundamentals, strong brand equity, and a diverse regional presence, among other things.
The stock trades at 27X FY19 projected earnings and deserves an inclusion in the core portfolio of investors for a secular, good quality earnings story.
On an average, there was a 4% increase in the sales turnover of the 14 mid and small size construction companies that have reported results so far.
The ground is fertile for a strong growth in the wind power sector with tariff rates falling to levels which makes SEBs consider buying wind power. Further, as central government is involved the market opens up for other non-windy states.
Stock continues to be a candidate for accumulation as it witnesses tailwinds from demand for CPVC pipes backed by capacity expansion, cost savings from backward integration and the margin expansion.
On the back of strong business growth and brand, the company deserves a premium valuation. However, the outperformance of the stock has rendered the valuation too steep.
A rejig of the organisational structure may be beneficial for Arvind's shareholders since the value unlocked from the market cap of the four segments is expected to be marginally higher than the company's current market cap.
The management maintained its earlier guidance of single-digit revenue decline in FY2018 and EBITDA margin performance of 20-22% in the second half.
Value investors as a norm do not like to invest in initial public offerings (IPO). Most of them publicly disclose their aversion to it and advice retail investors to stay away from it.
PLNG enjoyed a better operating leverage due to higher capacity utilization of the Dahej terminal and marginally higher utilization at Kochi as well.
In the quarter gone by, the company reported a steady show with 21% growth in top line along with a stable margin that aided 18% surge in EBIDTA (earnings before interest depreciation & tax).
V-Mart, undoubtedly, remains a fundamentally sound pick owing to its ability to consistently deliver good margins and healthy return ratios over a period of time. However, a sharp run-up in the stock’s price over the past year leaves little room for a valuation upside in the near future.
Though Just Dial has denied any acquisition proposal from Google, a possible strategic fit cannot be ruled out. While Google comes to the table with its financial prowess, innovation acumen and reach in the virtual space, Just Dial might try to get better value from its various strengths
Though Fiberweb’s prospects of a multiple re-rating cannot be ignored, given its unique product offerings and healthy financials, a change in the capex plan merits attention.
There were two key takeaways from the recently concluded GST Council meet. One is the reduction in the tax rate from the highest slab and second, ease of compliance.
Just when the dust was settling in the rattled information technology (IT) space Karnataka government has decided to stir up the sector. It became the first state to recognise trade union in the IT sector.
Both companies during the September quarter have reported lower losses as a steel up-cycle helped them earn better realisation, higher volumes and benefits of operating leverage as their capacity utilisation improved.
The highlight was the lack of any negative surprise on asset quality. Proceeds from the stake sale in its arm SBI Life was used to step up provisioning and thus improve the provision coverage ratio.
Current pricing realization can sustain in medium term on account of structural supply curtailments. This also provides positive takeaways for Himadri Speciality Chemicals.
While incremental improvement may not be visible in the coming quarter, the company’s gross margins are expected to inch up starting Q4FY18.
We continue to like the business and recognize numerous tailwinds for the company like the GST opportunity, strong exports, strategy on defense, and last but not the least, the focus on electric vehicles (EVs).
The company stands in a sweet spot with projects being implemented on time and greater visibility seen on monetization of assets in the coming quarters.