In today’s briefing:
- Ahlada Engineers Ltd- Forensic Analysis
- BPCL (Update): Favourable risk-reward. Upgrade to BUY
- Axis Bank (Update): Citibank consumer business calls for upping the game. Maintain BUY
Ahlada Engineers Ltd- Forensic Analysis
- Located near Hyderabad, Ahlada Engineers (AHLADA IN) manufactures and sells steel doors and windows in India. It also produces school furniture, drinking water systems and allied products across numerous industries.
- The facilities are spread across 3 manufacturing units in addition to one assembling unit and stock yard, with an area admeasuring 27,153 square yards on the outskirts of Hyderabad.
- Ahlada however suffers from some balance sheet and financial issues which are highlighted in our report.
BPCL (Update): Favourable risk-reward. Upgrade to BUY
- We upgrade Bharat Petroleum Corporation (BPCL) to BUY, with a target price of INR 420, given it has corrected ~30% from its peak over the last six months, owing to pressure on auto-fuel marketing margins and an increase in LPG under-recoveries
- We believe the recent correction is overdone, and see limited downside from current levels, led by: (1) improvements in refining margins, (2) resumption of daily auto-fuel price changes, and (3) a gradual reduction in LPG under-recoveries.
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Axis Bank (Update): Citibank consumer business calls for upping the game. Maintain BUY
- Axis Bank announced the acquisition of Citibank’s cards, consumer lending, and wealth businesses in a transaction that is likely to be closed over the next 9-12 months
- At an acquisition cost of US$1.6bn, while the deal appears to be a bargain for Axis Bank, the value accretion from Citi’s portfolio over the medium term is contingent on a host of factors including retention of existing customers, Axis Bank’s ability to continually add customers of such profile and its ability to up-sell and cross-sell
- Although the Citibank transaction adds significant heft to Axis Bank’s competitive positioning across cards and wealth management businesses, we believe that Axis Bank will need to up its game in order to create sustainable value from the Citibank portfolio.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
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