{LONGTERMINVESTORS} India Daily: Results; Results, Change in Reco; Update

 

 

 

Daily Alerts

Results

Sun Pharmaceuticals: Disappointment continues

l Gleevec surprises negatively l Competitive pressure intensifying in topicals; MK-3222 now critical for long-term growth l Pressures remain on the base business, and so does SELL

State Bank of India: An improved performance

l Operating profits grow 20% yoy but earnings decline on the back of high provisions l Watch list unchanged; NPLs increase marginally qoq but partly led by higher write-offs l Maintain BUY; our call on SBI being the best among public banks stays

Shree Cement: North star

l Low fuel cost, sharp reduction in depreciation charge allow earnings outperformance l Pet-coke - the fortunes are reversing, even though price trends for cement remain firm l Maintain SELL with target price of Rs12,000/share

Cipla: Transitioning for a stronger business

l Improving operational parameters, though some pockets continue to disappoint l Management transition takes place with a strong team now in place l Latent technology under-appreciated - Abraxane and ProAir filings should revive faith

NMDC: Karnataka prices aid

l Strong EBITDA led by better realizations from Karnataka and export markets l Global, domestic overcapacity - prices to oscillate in lower ranges with large rebound unlikely l We stay cautious; buy-back, investment in steel plant to stretch balance sheet in 1-2 years

Hindalco Industries: Cost helps, prices don't

l Strong EBITDA led by lower aluminum production costs l Hindalco's fall in aluminum production costs much higher than peers, including Vedanta l We remain cautious on aluminum prices and Hindalco; raise TP to Rs105 (Rs85 earlier)

NHPC: Strong earnings, Subansiri stalemate continues

l Strong earnings growth despite modest decline in generation l Subansiri - hopes of resolution rekindled by changing political landscape in Assam l Maintain REDUCE rating with a target price of Rs24/share

United Breweries: Healthy quarter but a tad below estimates

l 1QFY17 earnings print - volume growth healthy at 6% yoy; EBITDA/PAT miss estimates l Volume growth driven by double-digit growth in East and South markets l Cut estimates a tad; retain SELL with revised TP of Rs730/share as we roll over to June 2018E

Oriental Bank of Commerce: Weakness continues

l Weak quarter on operating and asset quality basis l Slippages remain high at 9%; impaired loans at ~18% of loans l Maintain ADD, TP unchanged at Rs120

J&K Bank: Weak, as expected

l Earnings decline led by weak revenue growth and high provisions l Impairment ratios increase further; technical write-off helps report lower gross NPL ratio l The weak start is on expected lines l Maintain BUY as the revenue profile is strong to manage the crisis

HSIL: Improving the odds?

l Results review: better performance from BPD l Operations stable, but management confident of stronger growth in FY2017

Minda Corp.: Lower profitability impacts 1QFY17 results

l 1QFY17 results below estimates on lower profitability in standalone business and JVs l Expect 17% revenue CAGR over FY2016-20E; lower profitability in Furukawa JV a concern l Lower FY2017-18E EPS estimates by 5-6%; maintain REDUCE with unchanged TP of Rs110

Results, Change in Reco

Rural Electrification Corp.: NIM drives earnings

l Flat loan book, higher provisions even as NIMs support l We factor NIM compression l We continue to provide for high NPL in our adjusted book; revise rating to ADD post the rally

Godrej Industries: A soft start to the year

l GAVL: Organic and inorganic growth l GCPL: Weak revenue print across the board l GPL: Muted start to the year l Other highlights

Speciality Restaurants: 'Grilled' again; downgrade to SELL

l 1QFY17 earnings print - another disappointing quarter l Key takeaways from the earnings call l Cut estimates; downgrade to SELL with unchanged TP of Rs75

Economy

Economy: Inflation continues to soar

l July CPI inflation hits a 23-month high l Core inflation inches higher l IIP growth registers a robust print l RBI likely to ease rates by 25 bps in CY2016; further action dependent on MPC ideology

 

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