Buy
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Buy
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HSIE Results Daily: Bajaj Auto, Tech Mahindra, TVS Motor, United Spirits, Hitachi Energy, Birlasoft, PNB Housing …
HDFC Securities
Birlasoft: Birlasoft (BSOFT) posted a strong operational performance despite the seasonal weakness in Q3. Growth continued to accelerate (YoY trajectory), supported by large account mining (T10 growing at 2x the overall rate). BSOFT continued to strengthen its leadership bandwidth with recent hires including CEORoW, COO, head of ERP, head of cloud & infra, strategic sales and client partners that will support addition of marquee logos, drive larger deals and improve execution (supported by Optimus' initiative). Key positives include steady margin improvement supported by lower cost of delivery (sub-con reduction & offshore shift) and resilience in service lines (infra & cloud services and ERP). The relative softness in new deal bookings raises the ask-rate for next quarter but the medium-term prospects remain positive (Birlasoft The next large mid-tier) & (Birlasoft Getting better). However, the recent rally in the stock (more than doubling in 6M) and valuation at 25x FY26E limit the near-term upside. Downgrade to ADD (BUY earlier) with a target price of INR 840, based on 26x FY26E, supported by 20% EPS CAGR over FY24-26E. PNB Housing Finance: PNBHF's Q3FY24 results missed estimates due to muted loan growth (+7.4% YoY) and NIM compression (~46bps). Management has reduced its retail loan growth guidance to 15% from 17% for FY24, due to moderation in demand and internal challenges. The rebalancing of the portfolio towards retail (96% of loan book) and particularly individual housing (~69%) is weighing on loan growth and margins. However, PNBHF is making significant investments in the distribution network with 88 branches to be added in...
Buy
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Buy
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HSIE Results Daily: Reliance Industries, SBI Cards and Payment Services, Indian Hotels, MMFS, IndiaMART InterMESH, Aavas …
HDFC Securities
IndiaMART InterMESH: IndiaMART posted revenue growth of 4.5% QoQ with strong cash collections (+28% YoY). The paid supplier addition was weak (~2K), impacted by a price hike in the entry-level segment and higher churn in the silver monthly bucket (monthly churn at ~7% vs 5% earlier). The management has refrained from giving any guidance for the net paid supplier addition and is working on reducing the churn (the impact of the price hike is for two quarters). The revenue growth is driven by strong collections and an increase in realisations (+3.8% QoQ). The ARPU improvement is led by migration to a higher price/tenure bucket and lower churn in gold and platinum paid suppliers (~50% of paid suppliers and ~75% of revenue and monthly churn is ~1%). Strong cash collections provide growth visibility for FY24E but the margin expansion will be slower than what we anticipated earlier (range of 28-30%) as the investments are ongoing. We maintain our positive view on IndiaMart, based on (1) growth visibility led by strong collections, (2) lower churn in plat/gold client buckets, (3) gradual margin expansion, and (4) an increase in ARPU. We lower our EPS estimate by ~7% for FY25/26E due to slower-than-expected margin expansion. We maintain our BUY rating with a DCF-based TP of INR 3,200 (~44x Sep-25E EPS), supported by revenue/EPS CAGR of 23/30% over FY23-26E. Aavas Financiers: AAVAS's earnings marginally missed our estimates on the back of lower-than-expected loan growth and pressure on yields, reflected in the 30bps compression in spreads sequentially. Business momentum continued to be...
Buy
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Accumulate
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Growth momentum sustains for eighth consecutive quarter; RoA remains >3.5%
ICICI Securities Limited
Ujjivan Small Finance Bank (USFB) sustained its industry leading profitability with RoA staying above 3.5% for the fifth consecutive quarter, driven by strong growth momentum, higher efficiencies and controlled credit costs. AUM growth, at 5% QoQ, was supported by 9% QoQ increase in disbursem*nt, in line with the bank’s >25% credit growth target for FY24.
Buy
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Buy
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Axis Annual Analysis:Ujjivan Small
Axis Direct
We firmly believe that Ujjivan Small Finance Bank is on an upward trajectory. Our valuation, based on 2.0x FY25E Adjusted Book Value (ABV), yields a target price of Rs 64/share, implying an attractive 13% upside potential from the current market price (CMP).
Buy
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UJJIVAN SMALL FINANCE BANK LIMITED
Geojit BNP Paribas
Alert
Accumulate
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HSIE Results Daily: Nestle India, Bharat Petroleum Corporation, Shree Cement, Shriram Finance, Westlife Foodworld, Fine Organic …
HDFC Securities
Fine Organic Industries: Our ADD recommendation on Fine Organics with a TP of INR 4,781 is premised on (1) leadership in oleo-chemical-based additives in the domestic and global markets with a loyal customer base (2) unique business model with high entry barriers (3) diversified product portfolio and (4) pricing power. Q1 EBITDA/APAT were 25/31% below our estimates, owing to a 7% fall in revenue, higher-than-expected raw material costs, lower-than-expected other income, and higher-than-expected tax outgo. Ujjivan Small Finance Bank: Ujjivan SFB once again clocked an all-time high PAT, led by robust loan growth (+35% YoY), and a moderate improvement in NIMs (+10bps QoQ). Despite strong sequential traction in deposits (+4% QoQ), back-book repricing in the MFI portfolio supported NIM expansion. GNPA clocked in at 2.6%, witnessing a 26bps QoQ improvement on the back of strong upgrades/write-offs despite seasonally higher slippages. While Ujjivan has absorbed most of the surplus liquidity on its balance sheet, incremental pressure on funding costs and high opex intensity from franchise-building investments are likely to restrict productivity gains. We adjust our FY24/25 estimates for improvement in yields and credit costs maintain ADD with a revised TP of INR50. Mahindra Lifespaces: In the absence of new launches, Mahindra Lifespaces Developers Ltd (MLDL) reported subdued presales of INR 3.5bn (-43%/-4% YoY/QoQ), with volume at 0.42msf (-35%/-14% YoY/QoQ). MLDL launched its first plotted development in Chennai, selling 70% of the launched inventory (Q2FY24). It also laid out its plan to achieve annual presales of INR 80-100bn (5x, 5yrs) by FY28, including INR 5bn annual IC&IC lease...
Buy
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Buy
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RoA sustained at >3.5%; management guided for >25% AUM growth and >22% RoE in FY24
ICICI Securities Limited
Ujjivan Small Finance Bank (Ujjivan) continued to lead the SFB space with industry leading profitability. RoA sustained at >3.5% for the fourth consecutive quarter with an average RoE of 30% during the same period. While profitability was boosted by provision write-backs during FY23, it still remained robust despite credit cost normalising to 40bps in Q1FY24 reflecting strong underlying business momentum.
Buy
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Accumulate
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HSIE Results Daily: Asian Paints, Godrej Consumers, Eicher Motors, Aditya Birla Capital, Gujarat Gas, Gujarat State …
HDFC Securities
HG Infra: HG Infra (HG) reported a strong quarter, beating our estimates on all fronts by 6.7/5.4/8%. It guided FY24 revenue will grow by 22-23% YoY with an EBITDA margin of ~16%. In FY23, it was awarded INR 86.5bn worth of projects, taking the OB (as of Mar'23) to INR 127.7bn (c.2.9x FY23 revenue). It guided for (1) FY24 order inflows of ~INR 80-90bn and (2) maintaining a book-to-bill ratio of greater than 2.5x. It further guided that, going ahead, non-road projects will contribute 20-25% of OB. The focus for FY24 will be majorly on the roads and highways segment. The standalone net debt, as of Mar'23, stood at INR 3.2bn. WC days for FY23 stood at 23 (vs. 31 days in FY22). In eight HAM projects, balance equity of INR 4.4/3.6/0.8bn will be infused in FY24/25/26. The company monetised four HAM projects at a price-to-book value of 1.55x. INR 5.3bn is expected to flow in FY24 from the deal. Given strong execution and robust OB, we maintain BUY, with an increased TP of INR 1,149 (14x Mar-25E EPS). We recalibrate our FY24/25 EPS estimates higher by 14.5/22.4% to factor in the higher level of execution and better EBITDA margin. Ujjivan Small Finance Bank: Ujjivan SFB reported its highest-ever PAT, led by robust loan growth (+31% YoY) and write-back in provisions. NIM witnessed sharp compression (-30bps QoQ) on the back of strong sequential traction in deposits (+10% QoQ) from the bank's continued investments in franchise building and branch expansion. GNPA clocked in at 2.9%, witnessing a...
Buy
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Buy
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Strong growth momentum to sustain; guiding >25% AUM growth and >22% RoE for FY24
ICICI Securities Limited
Ujjivan Small Finance Bank (Ujjivan) has sustained its improving trajectory in profitability, backed by its revised business strategy post the management change in Sep’21, as reflected in it delivering 3.9% RoA and 30% RoE during Q4FY23.
Accumulate
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HSIE Results Daily: Titan, PGCIL, Britannia Industries, Dabur, Ashok Leyland, APL Apollo, Aditya Birla Capital, Godrej …
HDFC Securities
APL Apollo: APL Apollo Tubes' (APL) Q3FY23 revenue increased 34 % YoY to INR43.2bn, led by strong volume growth (+50.2% YoY). The blended realisation, however, declined 10.8% YoY due to a greater contribution of low-margin general structure products in the mix (44% in Q2FY23 vs 35% YoY). Accordingly, EBITDA/ton, increased 17% QoQ (-10.2% YoY) to INR4,510 as stabilisation in global commodity prices led to a reduction in destocking in China and positive operating leverage in Raipur. EBITDA went up 34.9% YoY to INR2.7bn, led by high volume, but the margin remained constant YoY. PAT increased 46.3% YoY to INR1.6bn, the highest for any quarter to date. Management is contemplating expanding the capacity even beyond 4MT through bottlenecking. APL is expected to benefit from the FY23-24 budget push towards infrastructure and railways. Accordingly, estimated improved sales mix supported by domestic steel price recovery, and enhanced government infrastructure spending should drive both volume and EBITDA/ton. Hence we maintain our TP of INR1,333 and earnings estimates and retain our BUY rating. Aditya Birla Capital: Aditya Birla Capital (ABCL) reported a mixed bag with the lending businesses clocking a strong performance and the non-lending businesses witnessing a soft quarter. Both the lending businesses have been gradually repositioned towards retail and granular loans (two-thirds of NBFC AUM is towards Retail + SME + HNI, 42% of the HFC AUM is towards affordable loans), reflecting in sustained improvement in franchise earnings (NBFC RoA nears FY24 target, HFC RoA is above FY24 target). While the LI business continued to build steady profitability (higher...
Buy
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Stressed asset portfolio subsides to lowest level with SMA pool at 1.5%; return profile to remain …
ICICI Securities Limited
Ujjivan Small Finance Bank’s (Ujjivan) Q3FY23 and 9MFY23 financial performances were an outcome of its successful execution of revised business strategy post the management change in Sep’21. The improved performance is an outcome of the bank’s 100-day action plan implemented in Oct’21 with three key objectives.
Buy
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Accumulate
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