Daily Brief India: Zomato, Azure Power Global Ltd, Multi Commodity Exchange India, Sun Pharmaceutical Industries and more

• The street is excited about Zomato (ZOMATO IN) ‘s profitability, we are not.
• Zomato’s execution is strong, driving improved profitability despite the margin-dilutive Gold offering.
• Caution warranted due to market dynamics: slow growth, margin pressure, and increased competition.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Azure Power Global Ltd

• Multi Commodity Exchange India (MCX IN) has been having troubles at the bottom-line due to transaction fees, delay of commodity derivatives platform, etc. which is not totally within its control.  
• However what warrants attention is the investment yield that has dropped considerably in FY22, coupled with the non-traceable interest income from the bank deposits, which has affected the margins.
• Other forensic takeaways include no-provisioning of doubtful debts and misstatement of cash flows.

• Sun Pharmaceutical Industries (SUNP IN) recorded 14% YoY revenue growth in Q4FY23, driven by 21% growth in U.S. formulation business. Adjusted net profit for Q4FY23 was INR21.6B, up 36% YoY.
• Global specialty business continues to maintain strong momentum. Adjusted for milestone received, global specialty contributed 18% of Q4FY23 overall sales and grew 28% YoY to $244M.
• Sun Pharma has proposed to acquire the remaining stake in Taro Pharmaceutical for a purchase price of $38 per share in cash. Management expects high single-digit revenue growth in FY24.