In today’s briefing:
- LG Energy/LG Chem Flow Trading on Solactive Lithium Index Rebalancing
- Gillette India – Mixed Bag; Limited Upside Leads to Rating Downgrade
- Maruti Suzuki – Beat on EBITDA; Growth Outlook Remains Strong
LG Energy/LG Chem Flow Trading on Solactive Lithium Index Rebalancing
- We cannot completely rule out the possibility that Solactive will announce a correction disclosure for the LG Energy Inclusion/LG Chem Exclusion 2 to 3 trading days before May 11th.
- LG Energy can expect an inflow of 0.85x ADTV (0.16% of SO). On the other hand, LG Chem will face an outflow of -1.76x ADTV (0.52% of SO).
- Considering the correction disclosure uncertainty and the passive flow size, we should approach this as a day trading event after watching the results by this Friday (or the following Monday).
Gillette India – Mixed Bag; Limited Upside Leads to Rating Downgrade
- 3QFY22 performance: GILL’s 3QFY22 revenue grew by 5.6% YoY to Rs5.7bn (vs our est. of Rs5.9bn).
- 3QFY22 segmental performance: In terms of revenue, while the Grooming segment (76.1% of sales in 9MFY22) grew by 8.9% YoY (largely in line with our estimate; 3-year CAGR of 5.5%), Oral Care disappointed with a decline of 5.1% YoY (a drop of 12% even on QoQ basis; 3-year CAGR of 12.2%).
- 9MFY22 performance: Revenue was up by 8.3% YoY while EBITDA & PAT were down by 9.2% YoY & 16.8% YoY, respectively.
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Maruti Suzuki – Beat on EBITDA; Growth Outlook Remains Strong
- Demand Outlook: Demand momentum remains stable with a current order book of 320k units vs 264k units in Dec’21.
- Semiconductor Shortages: The production during FY22 was constrained by a global shortage in the supply of electronic components because of which an estimated ~2.7 Lc units could not be produced.
- Input costs: The management noted that while precious metal prices have cooled off, base metal prices have increased (steel in particular) and will lead to margin pressures in H1FY23E.
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