{LONGTERMINVESTORS} India Daily: Results; Results, Change in Reco - Sun Pharmaceuticals, Pidilite Industries, City Union Bank; Update

 

 

 

Daily Alerts

Results

Motherson Sumi Systems: Decent results but SMRPBV growth still below par

l Largely in-line consolidated results; standalone business surprises positively on profitability l Building in double-digit revenue growth in both standalone and SMRPBV businesses l Fine-tune our earnings estimates; maintain SELL with revised TP of Rs280

Page Industries: 2Q misses as growth moderates

l 2QFY17 results - reasonable but below expectations l Segmental performance - continues to do well in women's segments l Solid but overvalued; we stay SELLers

Bank of India: Slippages at seven-quarter low; gains support earnings

l Strong treasury and investment income to the rescue l Fresh slippages decline to 4.1%; impaired loans stable at 16.5% l Maintain ADD; waiting for stability of the balance sheet

Apollo Tyres: Weak results

l India business margins better than expected; Europe business surprises negatively l Margins to remain steady on stabilizing input costs, volume growth to improve in 2HFY17 l Slightly cut estimates, but increase TP on rollover to September 2018E EPS; retain BUY

Dhanuka Agritech: Steady ship

l Revenues growth steady, better than industry demand in the quarter l FY2017E revenue growth guidance lowered to 15%; product launch momentum continues l Valuations: Fine-tune estimates, increase TP to Rs820; maintain BUY

Gateway Distriparks: Weak market takes sheen off results

l Rail business - growing share and savings; latter getting passed on in weak market l CFS business - margin stabilizes as loss-making assets move towards breakeven l Snowman business - large cost provision mars results; capacity utilization bottoming out l 2QFY17 results: Expectedly weak quarter; cut estimates

HCG: Healthy quarter; all eyes on ramp-up of new facilities

l Strong growth in existing facilities; EBITDA 4% ahead of estimates l Margin profile improving in existing centers; ramp-up of new facilities promising l BUY with revised target price of Rs270

Speciality Restaurants: Another weak quarter

l 2QFY17 earnings print: Another weak quarter l We drop coverage on SRL, our last published rating was SELL with a TP of Rs75/share

Results, Change in Reco

Sun Pharmaceuticals: Reported PAT strong; modest when adjusted

l Strong beat on reported; modest beat on adjusted l Competitive pressure intensifying in topicals; MK-3222 now critical for long-term growth l Downside limited - upgrade a notch to REDUCE

Pidilite Industries: Modest quarter; risk-reward favorable - upgrade to ADD

l Challenging demand environment and fading RM tailwinds impact performance l International business performance weak; profitability weakens across geographies (ex-Brazil) l Estimates broadly unchanged; we find risk-reward favorable at these levels - upgrade to ADD

City Union Bank: Recent performance limits upside; downgrade a notch

l In-line performance driven by stable growth and improving margins l Fresh slippages increase 40 bps qoq at 2.3%; gross NPLs move ~10bps qoq to 2.7% l Downgrade to REDUCE post recent outperformance; few risks in the horizon

Sector alerts

Banks: Some material relaxations to show corporate banks in better light

l S4A tweaks provide a new lifeline to NPL cases, albeit with higher provisioning requirement l Other tweaks: 5:25 schemes could rise sharply; partly completed projects could get a breather l The benefit to positively affect all public banks and ICICI Bank/Axis Bank amongst private banks l Resolutions needs to improve; lack of external players forces banks to step in to provide equity

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