ICICI Lombard, with a 8.9 percent market share in the general insurance segment, trades as a proxy for the sector, commanding a higher valuation
Current valuations based on enterprise value at 7.8 times its estimated operating profits of FY19 are quite reasonable and supportive especially in the light of 25% return on equity, zero debt and cash of about Rs 23,000 crore in the books.
While the stock has corrected post a very disappointing quarter, we draw comfort from the commentary and the inexpensive valuation of 10.5X FY20e earnings.
Mahindra CIE’s domestic and Europe revenues grew significantly. Its EBITDA margin remained flat, despite adverse raw material prices. New orders, strong demand outlook and reasonable valuations make it a stock worth considering
Analysts have remained positive on the dividend declaration and in-line estimates. They expect a good second half of this fiscal for the company.
Outlook for the industry is positive as capacity utilisation continues to move up. The demand-supply dynamics is expected to move in favour of cement manufacturers in the medium term
Notwithstanding its large size, HDFC Bank is gaining market share at an accelerated pace, which will aid sustainable high earnings growth
We see a lot of comfort in the current valuation at 1.1 times FY20 estimated book and recommend accumulating the stock in the current weak market
The bank reported 20.6 percent year-on-year growth in Q2 FY19 profit to Rs 5,005.73 crore, driven by net interest income (NII), other income and operating income.
Given its strong positioning, we recommend accumulating the stock during corrections
While the Q2 FY19 earnings were better-than-expected, further improvement in profitability hinges a lot on operating efficiency and could take longer than envisaged
Market beta (sensitivity to broader index) of various FMCG stocks are well below one, which means they decline or rise less in times of market wide correction or upsurge phases, respectively
NIIT Technologies exhibited robust all round performance, for Cyient it was a quarter of revival from the lows it had hit in Q1 FY19.For Mindtree, Q2 was not only soft but the management commentary was surprisingly cautious.
So far, more than 10 percent of S&P 500 companies mostly from the financials, technology, consumption and industrial sectors have reported earnings.
From a valuation standpoint, the stock now trades at around 11 times FY19 EV/EBITDA and appears little stretched from a near term perspective
We feel the valuation (stock is trading at 18 times) is reasonable considering the opportunity in the sector, leadership position, focus on single segment, good return ratios and strong growth visibility
We continue to prefer Apex Frozen Foods from a business perspective, but volume growth is likely to see some stagnation this fiscal on account of lower domestic production and shrimp disease
Jio continued to impress with quarterly performance and despite strong competition, operating revenue increased and the company sustained operating margins as well.
Overall weakness in the market and expectations of a contraction in operating margin have led to significant weakness in the stock. This provides a great opportunity for investors to enter into a fundamentally strong business run by a quality management at a reasonable valuation.
BofAML has maintained its buy rating on Hero MotoCorp after September quarter results but slashed its target price to Rs 3,500 from Rs 3,800 earlier
While we remain concerned about the future trajectory of slippage and the low capital position, we draw comfort from the undemanding valuation at 0.6 times FY20e adjusted book .
Infosys posted a decent Q2 FY19 performance that saw steady execution, stable margin and strong deal wins. However, no change in FY19 revenue and margin guidance was a tad disappointing
At the time when the NBFC sector is grappling with funding issue, IBHF is guiding for medium term loan growth of 20-25 percent which clearly signals its relatively strong liquidity position.
It remains to be seen as to how the company manages to gain incremental market share without hurting its margins.
With most of the near-term negatives priced in, we derive comfort in the valuation at 3.2X FY20e standalone book and recommend accumulation in this weak phase.