Emkay Global Financial Services' research report
Reco: HOLDCMP: Rs 166Target Price: Rs 178
Decent show
Revenue at Rs80.2bn (+6% qoq) and EBITDA at Rs27.5bn (+11% qoq) with EBITDA margin of 34.3% (+143bps qoq), beat of 5% was driven by lower than expected network cost. PAT at Rs7.7bn (+1.5% qoq) was impacted by higher depreciation
Traffic on network grew 18% yoy and 5% qoq (in line with estimate). Voice RPM continued to decline for second consecutive quarter to Rs0.356 (-5.6% yoy and -1.7% qoq) while blended RPM improved 1% qoq, driven by robust data revenue growth
Bidding intensity in upcoming spectrum auctions is the key for stock price movement
R-Jio’s launch and upcoming spectrum auctions remains a concern in medium term. Retain HOLD with revised target price of Rs178
Reco: ACCUMULATECMP: Rs 847Target Price: Rs 881
Growth drivers intact, earnings growth to pick up
Key numbers below expectations with sales of Rs3.2bn (our estimates Rs3.6bn), EBITDA at Rs545mn (estimate Rs569mn) and PAT at Rs236mn (Rs238mn)
Q3FY15 largely a forgettable quarter for Granules given production disruption for nearly three weeks due to cyclone on Eastern coast
Clear signs of improvement in business with erstwhile subsidiary Auctus pharma likely to break-even by Q4FY15. This coupled with higher utilization and improving product mix to ensure earnings CAGR of 30% over FY15-17
Maintain our estimates and our Accumulate stock rating with target price of 881/share, valuing stock at 10X FY17e EPS. Key risk to our stock call is delays in capacity ramp-up and a slower-than-expected improvement in Auctus’s financial profile
Adani Ports and Special Economic Zone
Reco: BUYCMP: Rs 339Target Price: Rs 370Stable quarter
Q3FY15 Consolidated Revenue came at Rs15.3 bn +48.3% YoY versus expectation Rs13.7 bn led by better than expected volume run rate at 38.8 mt versus expectation of 36.5 mt and realisations (like to like) came at Rs385/t versus expectation of Rs376/t
EBITDA Came in at Rs9.2 bn +53.1 YoY (versus expectation of Rs8.2 bn) due to higher revenue flow whereas EBITDA Margins came in line with estimate of 60.2% +189 bps YoY
Standalone (Mundra port) EBITDA came in at Rs5.9 bn +21.1% in line with estimate and clocked EBITDA Margin of 64.4% +317 bps YoY versus expectation of 63.7%
We have revised our target price to Rs370/share as we roll over our DCF assumption to FY17E.Stable volumes from Mundra as well as ramp up from newer ports to drive earnings CAGR of 13% over FY14-17E. Maintain Buy
Reco: HOLDCMP: Rs 929Target Price: Rs 735
Power brands lead growth; Retain HOLD
Results beats estimates – Revenues at Rs 6.9bn, up 18.4% yoy with volume growth at 11% yoy. Higher gross margins offset by ad & promotion spends, thus 140bps decline in EBITDA margins to 30.6%. APAT at 22% yoy to Rs 1.8bn due to higher other income
Volume growth healthy at 11% led by power brands, Navratna and Boro Plus. Expect distribution expansion and innovation to drive sustained growth in power brands
Gross margin increase offset by higher ad & promotion spends. Factored 400bps gross margin rise, but higher ad spends to curtail EBITDA margin to 80bps yoy over FY14-17E
Upped earnings by 4%/5% for FY16-17E led by higher gross margins & better international operations. Rising ad spends on new products is a concern. We retain HOLD with revised price target of Rs 735/share
Reco: SELLCMP: Rs 50Target Price: Rs 34
Expect losses to continue in FY16/17; maintain Sell
Better than expected performance led by lower fuel cost and higher PLF. Company reported adj. loss of Rs4.09bn
Expect losses to continue in FY16-17, despite factoring CERC, MERC and RERC compensatory tariffs
Though recent compensatory tariff orders have been positive for Adani. The final outcome is still pending before SC and APTEL
Most expensive private power utility with valuations at 4.6x FY16E book. Maintain Sell, with a price target of Rs34/sh
Reco: BUYCMP: Rs 336Target Price: Rs 381Maintain Buy
Weak performance in Engineering, Mechanical & Packaged Air Conditioners (EMP&PAC) segment impacts the operating results
Legacy orders gradually getting closed, albeit at increased cost
Order inflows decline by 5% YoY while the order backlog decline by 19% YoY
Strong operational performance in cooling products (CP) driven by (a) 26% YoY revenue growth and (b) 220bps YoY improvement in margins to 5.1%
Retain positive bias; Introduce FY17E earnings of Rs21.8/Share. Valuing at 17.5X with price target Rs381/Share
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