Company Reports

Aditya Birla Capital (ABCL), a financial services provider, continued its robust growth in business operation in 4QFY19 as well. The company’s consolidated PBT increased by 59% yoy and PAT jumped by 52% yoy to `259cr for Q4FY19. Growth was supported by lending & AMC business, while health insurance continued to report loss; however management expects …

Outlook & Valuation: We believe that AAL is comfortably placed to tap the upcoming opportunity in the industry owing to improving road infra, BS-VI prebuying and foray into new segment coupled with expansion of capacity by 35- 40%. However, medium term scenario looks tough, but long term prospects seem positive. At the CMP of `1,192, …

Outlook & Valuation: We expect STFC’s AUM to grow at CAGR of 16% over FY2019-21E primarily owing to (1) post election government to increase spending on infra project (macro recovery), and (2) pre-buying of CV before the BS VI will also improve the pricing of older vehicles. We expect STFC to report RoA/RoE to 2.7%/17.6% …

Outlook & Valuation: At the current market price, the bank’s core banking business (after adjusting the value of subsidiaries) is trading at 1.6x FY2021E ABV. We believe strength of liability franchise (CASA – 50%), shift in loan mix towards retail assets & better rated companies, strong capitalization (tier I of 14.73%), steady improvement in stressed …

Given the ongoing global trade concerns, we expect steel prices to remain volatile along with increasing iron ore prices due to Vale incidence. However, we project that domestic demand will continue to remain positive for steel and power sectors on long term basis, and expect JSPL to perform well in coming years along with the …

Outlook and Valuation: Considering the changing dynamics of renewable energy consumption and government’s thrust to auction 10 GW wind capacity by year 2028, we are bullish on the sector, and hence, have a positive outlook on IWL. At the CMP of `60, the stock is available at PE multiple of 5.5x its FY2021E EPS of …

Outlook and Valuation: Near term outlook looks tough for the industry, however considering the long term perspective, LIL is a good bet to play on auto growth and increasing LED penetration, which will help Lumax to grow above the industry rate going forward. At the CMP of `1,402 stock is available at 12x of FY21E …

For 4QFY2019, Blue Star posted results above our expectations on both top-line & bottomline front. The company reported 18.5% yoy top-line growth and PAT was up ~199% yoy due to strong operating performance and one-time deferred tax credit recognized by the Company’s subsidiary Blue Star Engineering & Electronics Ltd. Outlook & Valuation: We forecast …

Outlook & Valuation: Axis Bank currently trades at 2.2x its FY2021E price to book value (after adjusting value of subsidiaries). We expect the stock to get re-rated owing to (1) new leadership, (2) limited stressed loan pool, and (3) improvement in return ratios (ROA/ROE – 1.23%/114.7% by FY2020E). We recommend Buy on the stock with …

Outlook & Valuation: We have neutral view on YES Bank considering (a) low CET of 8.4%, for growth, bank will have to raise capital at current low valuation, (b) uncertainty related to newly identified stressed asset, (c) new MD strategy to move towards building a strong retail franchise and corporate governance/transparency, which will moderate balance …

For 4QFY2019, Maruti Suzuki India (MSIL) posted below expectation results both on top-line and bottom-line fronts. MSIL reported ~1% yoy top-line growth to `21,459cr on the back of price hikes (up ~2% yoy). Moreover, the company’s operating margins contracted by 370bps yoy. On the bottom-line front, MSIL reported de-growth of ~5% yoy to `1,796cr on …

HDFC Bank delivered steady performance for Q4FY2019, with PAT growth of 22.6% yoy. Pre-provision profit grew at healthy rate of 22.7% yoy, however it was lesser than previous quarter (27.6% yoy) largely owing to moderation in fee income. NIM improved 10bps yoy (4.4%), led by change in loan mix. The bank managed to reduce …