In today’s briefing:
- India Channel Insight #36 | Daikin, Havells, Voltas
- Life Insurance Corporation of India: Time to Think About Scope 3 “Financed Emissions”
- Clean Science & Technology – 4Q Ahead of Estimates; Continues to Gain Customer
- G R Infraprojects: Efficient Execution to Drive Growth; Maintain BUY
- United Spirits Update: All Round Progress
- PNC Infratech – Monetization of HAM Portfolio a Key Monitorable
- Sun Pharma Industries – One-Time Costs Hit Earnings
- Aarti Industries – In-Line Quarter
- United Spirits (4QFY22): Uptrend Story Continues; Uninspiring Brand Sale. Maintain ADD
- Apar Industries – Strong Quarter; Outlook Mixed
India Channel Insight #36 | Daikin, Havells, Voltas
- The overall Air Condition (AC) season has been good, with volumes up by more than +20% compared to the last two years.
- Daikin Industries (6367 JP) & Voltas Ltd (VOLT IN) have performed below expectations with stiff pricing and poor dealer support.
- Havells India (HAVL IN) (Lloyd) market share gain is on the back of lower prices. The focus has moved from premiumizing brand & expanding margins to gaining market share.
Life Insurance Corporation of India: Time to Think About Scope 3 “Financed Emissions”
- For better or for worse, the Life Insurance Corporation of India (LICI IN) IPO is done. Maybe we should start thinking about LIC’s Scope 3 “financed emissions” (aka “portfolio emissions”).
- Financed emissions are investors’ “shares” of investees’ Scopes 1 and 2. A bit like someone else pulling the trigger, but being sent to the gallows for selling them the gun.
- Portfolio emissions are major source of climate-related financial risks, often “hidden” because financed emissions are grossly under-reported (or, quite commonly, un-reported).
Clean Science & Technology – 4Q Ahead of Estimates; Continues to Gain Customer
- We are comfortable with everything but valuation: Implementation of sustainable chemistry practices and ongoing process improvement (to cut down or eliminate the use of toxic materials such as KSMs, Efflux) is the need of the hour.
- While many companies are increasingly taking initiatives on that front, CLEAN is the pioneer in the same and is the classic example of why the chemical industry should shift to these practices in order to protect the environment without compromising their operational performance.
- Hence, valuation premium vis-à-vis like-to-like peers as well as chemicals industry should persist, in our view.
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G R Infraprojects: Efficient Execution to Drive Growth; Maintain BUY
- GR Infraprojects Ltd (GRIL) reported a decent set of numbers in Q4FY22. The company reported revenue of Rs 2,268 Cr, better than our estimate of Rs 2,103 Cr, down 13.7% YoY
- It registered EBITDA Margins of 17.8% in Q4FY22 (our estimate: 14.9%) as against 15.6% in Q4FY21
- We maintain a BUY on GRIL and value the EPC business at 15x FY24E EPS and HAM portfolio at 1x Book Value to arrive at a target price of Rs 1,765/share, implying an upside of 26% from the CMP.
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.
United Spirits Update: All Round Progress
- United Spirits (UNSP IN) Q4F22 results have shown some good improvement.
- There is all round progress witnessed, including debt reduction, focus on gaining market share, better scope of working capital management. There is an intent of supporting premiumization as well.
- The results and strategic decision making reinforces our bullish stance on United Spirits; the cherry on top is that there is further room for improvement in the short-mid term.
PNC Infratech – Monetization of HAM Portfolio a Key Monitorable
- Comfortable order book position: As on 31st March’22, the unexecuted orderbook stood at Rs146bn.
- FY23 guidance: The management has given guidance of 15% revenue growth for FY23 and 13-13.5% EBITDA margin.
- Asset monetization update: PNC has concluded the deal to sell the Ghaziabad-Aligarh project to Cube Highways on 29th May, 2022.
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.
Sun Pharma Industries – One-Time Costs Hit Earnings
- Sun Pharma reported revenue at Rs94,468mn, up 10.8% YoY but the same was down 4.2% QoQ.
- India Branded Generics business reported sales at Rs30,956mn, up 15.9% YoY, but down 2.3% QoQ
- US Formulations business reported sales at Rs29,246mn, up 8.5% YoY but down 1.6% QoQ.
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.
Aarti Industries – In-Line Quarter
- 4QFY22 performance highlights: ARTO’s consolidated adjusted revenue grew by ~45% YoY in 3QFY22 wherein Specialty Chemicals and Pharma segments grew by ~45% YoY and ~73% YoY, respectively.
- Growth guidance: ARTO incurred ~Rs13bn capex in FY22 and management has guided for >Rs30bn capex over the next 2 years.
- Update on long term contracts, Pharma demerger: Capacity for 1st long term contract, which got terminated, is expected to ramp up over the next 2 years and management is mulling a fresh capex of ~Rs10bn in order to offer the complete Dicamba chain.
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.
United Spirits (4QFY22): Uptrend Story Continues; Uninspiring Brand Sale. Maintain ADD
- P&A continues its growth momentum: Net revenue was up by 9% YoY (+12% in Q4FY21 and +16% in Q3FY22) vs. HSIE’s 13%.
- Total volume was up by 5% to 20.7mn cases (+8% in Q4FY21, +4% in Q3FY22) vs. HSIE 20.6mn cases. P&A revenue up by 15% YoY (+26% in Q4FY21, +20% in Q3FY22, HSIE 17%).
- P&A realisation was up 6% YoY (+5% in Q4FY21 and +11% in Q3FY22) to INR 1,617/case.
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.
Apar Industries – Strong Quarter; Outlook Mixed
- Conductors segment update: The Conductors segment’s revenue increased by 28% YoY to Rs15.03bn (48.3% of total sales)
- Oil segment update: Oil segment’s revenue grew by 29.2% YoY to Rs9.28bn (29.8% of total sales).
- Outlook: We expect 8.1%/2.6% revenue/earnings CAGR over FY22-FY24E.
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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