In today’s briefing:
- Campus Activewear IPO – Peer Comparison-Competitive Market, Firm Has Been Resilient During Pandemic
- Campus Activewear Pre-IPO – Synergistic Business Model, but in a Fragmented Industry
- Larsen and Toubro Infotech: Strong FY23 Outlook, but Valuations Remain Rich
- ACC Ltd: Higher Realization Drives Marginal EBITDA Beat
- ACC Ltd: Reduction in Fuel Cost Remains Key Trigger
- Gland Pharma: Well-Placed to Gain from the Drug Shortages in the US
- ICICI Securities: Near Term Headwinds Exist; Long Term Story Remains Intact
- ICICI Securities: Revenue from Broking Falls, Issuer Services Segment Witnesses Some Pressure
- ACC Ltd: Results Largely in Line; Power & Fuel Costs Controlled
Campus Activewear IPO – Peer Comparison-Competitive Market, Firm Has Been Resilient During Pandemic
- Campus Activewear Ltd (1535013D IN) is looking to raise about US$184m in its India IPO, via a 100% secondary selldown.
- While there are other domestically listed footwear makers, Campus’ competitors generally market a broader product offering, ranging from casual, formal or outdoor shoes etc..
- Campus’ performance was amongst the most resilient during the pandemic, but its margins continues to trail peers.
Campus Activewear Pre-IPO – Synergistic Business Model, but in a Fragmented Industry
- Campus Activewear Ltd (1535013D IN) is looking to raise about US$200m in its India IPO, via a 100% secondary selldown.
- Campus Activewear is a lifestyle-oriented sports and athleisure footwear firm based in India.
- Operating under the “CAMPUS” brand, the firm offers a diverse portfolio of styles, color palettes, and price points.
Larsen and Toubro Infotech: Strong FY23 Outlook, but Valuations Remain Rich
- LTI reported a growth of 3.6% QoQ CC on a high base, below our estimate of 4.2%.
- Growth was broad-based across verticals and service lines.
- EBIT margin moderated by 60bp QoQ to 17.3% in 4QFY22 (inline) due to lower working days and revenue mix
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ACC Ltd: Higher Realization Drives Marginal EBITDA Beat
- Q1CY22 EBITDA declined 26% YoY/increased 14% QoQ to Rs6.3bn, marginally ahead of our estimates, led by better-than-expected realization.
- Blended EBITDA/ton fell 25% YoY/rose 12% QoQ to Rs812 (Emkay est.: Rs780).
- Ongoing expansion projects (2.7mt clinker and 3.2mt cement grinding) are delayed by a quarter.
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ACC Ltd: Reduction in Fuel Cost Remains Key Trigger
- ACC’s Q1CY22 EBITDA of Rs6.35bn (down 26% YoY) was broadly in-line with our / consensus estimates.
- Total cost/te continued its upward trajectory as it rose 1.6% QoQ and 13% YoY primarily due to higher fuel prices, while blended realisations were up 2.7% QoQ and 5.0% YoY, resulting in blended EBITDA/te increasing 12% QoQ but declining 24% YoY to Rs812/te (I-Sec: Rs779/te).
- Volumes including clinker sales were down 2% YoY and up 2% QoQ at 7.8mnte.
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Gland Pharma: Well-Placed to Gain from the Drug Shortages in the US
- GLAND has 11 injectable products in the USFDA shortage list, which have combined sales of ~USD400m over the past 12-months.
- The overall number of drugs under shortage in the US has declined to a 15-year low at present.
- However, the number of injectables facing a shortage is at its 20-year average, but is at a record high as a percentage of total drug shortages.
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ICICI Securities: Near Term Headwinds Exist; Long Term Story Remains Intact
- ICICI Securities Ltd. (ISEC) reported numbers stood below our and consensus estimates, mainly owing to lower brokerage income driven by weak market sentiments arising from the geopolitical tensions.
- While the momentum on the client addition has been strong YoY, it has moderated on a sequential basis
- We maintain our BUY recommendation on the stock with a revised target price of Rs 865/share (17x FY24E EPS), implying an upside of 38% from CMP.
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ICICI Securities: Revenue from Broking Falls, Issuer Services Segment Witnesses Some Pressure
- ISEC witnessed a 6% YoY and 7% QoQ decline in revenue from the Retail Broking segment.
- We have lowered our FY23/FY24 EPS estimate by 10% each, to factor in weaker-than-expected traction in the Broking segment, a slowdown in the Issuer Services segment, the impact of a run-down in the ESOP funding book, and higher costs.
- Revenue from Retail Broking declines; momentum in client addition slows down
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ACC Ltd: Results Largely in Line; Power & Fuel Costs Controlled
- Results largely in line; Power & Fuel costs controlled ACC reported numbers largely in-line with our estimates with reported EBITDA coming in at Rs6.34bn, only 1.8% below our estimate.
- While volume and realisation were lower than our estimates, operating costs were also down, resulting in reduced impact on EBITDA.
- In fact, we were surprised that ACC did not show a bump up in Power & Fuel costs, which were largely controlled…(continued).
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