In today’s briefing:
- Delhivery Pre-IPO – The Positives – Riding the E-Commerce Boom
- Delhivery Pre-IPO – The Negatives – Not Showing Clear Signs of Delivering Profits
- Easing supply chain, ramp-up in exports to drive growth
- Elgi Equipments: Decent Numbers Amid Challenges
- Operating performance misses our estimate
- Greenply Industries: Margins Decline Owing to Higher Input Prices
- Lumax Industries: Near-Term Headwinds Persist; Long-Term Outlook Intact
- Below estimates led by higher opex and lower spreads
- Max Healthcare Institute Ltd | Q3FY22 Result Update
- Gold loan growth flat QoQ; auctions to stay elevated in 4QFY22
Delhivery Pre-IPO – The Positives – Riding the E-Commerce Boom
- Delhivery is looking to raise US$1bn in its upcoming India IPO, the company is backed by a host of financial investors, the largest being Softbank.
- Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
- In this note, we talk about the positive aspects of the deal.
Delhivery Pre-IPO – The Negatives – Not Showing Clear Signs of Delivering Profits
- Delhivery is looking to raise US$1bn in its upcoming India IPO, the company is backed by a host of financial investors, the largest being Softbank.
- Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
- In this note, we talk about the not so positive aspects of the deal.
Easing supply chain, ramp-up in exports to drive growth
- The performance miss in EIM was led by lower realization and launch/event related marketing spends.
- With supply chain issues showing some signs of improvement, the management expects volume performance to be better.
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Elgi Equipments: Decent Numbers Amid Challenges
- Elgi Equipments (Elgi) manufactures wide range of air compressors (~90% of revenue) and automotive equipment (~10%).
- Elgi is the second largest player in the Indian air compressor market (~22% market share) and among the top eight players globally
- Target Price and Valuation: We value Elgi at Rs 410 i.e. 50x P/E on FY24E EPS
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Operating performance misses our estimate
- ENGR’s 3QFY22 revenue was 25% below our estimate, with the miss led by a 25%/26% miss in the Consultancy/Turnkey segment.
- Operating profit stood at INR625m, 48% below our estimate.
- This was on account of an unfavorable revenue mix, with 47% revenue from Turnkey projects.
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Greenply Industries: Margins Decline Owing to Higher Input Prices
- Greenply Industries (GIL) is one the leading players in the plywood business in India
- It has a distribution network of 2,300+dealers/authorised stockists pan-India
- It is foraying into the MDF boards business with greenfield manufacturing set-up at Vadodara, Gujarat of 800 CBM/day (capex of ~Rs 555 crore)
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Lumax Industries: Near-Term Headwinds Persist; Long-Term Outlook Intact
- Lumax Industries (Lumax Inds) reported a weak set of results in Q3FY22 which stood below our estimates
- It reported revenue for the quarter at Rs 435 Cr (our estimate – Rs 467 Cr), registering a de-growth of 4% QoQ
- We retain our BUY rating on the stock with a revised target price of Rs 1,350/share (earlier Rs 1,600/share), implying an upside of 26% from the CMP.
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Below estimates led by higher opex and lower spreads
- In the last two quarters, MGFL traded off margin/spreads for Gold loan growth.
- This new business strategy helped it cover a lot of lost ground in terms of market share, with a cumulative Gold loan growth of ~24% over 2Q and 3QFY22. This new strategy also meant: elevated advertising/promotion costs and incentives for employees translating in higher operating expenses, and compression in spreads to ~11.5% v/s 14.5-15% under its earlier high yielding business model.
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Max Healthcare Institute Ltd | Q3FY22 Result Update
- In-line performance with robust pickup in non-covid business.
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.
Gold loan growth flat QoQ; auctions to stay elevated in 4QFY22
- For MUTH, 3QFY22 was characterized by: interest cost savings, which led to an in line PPOP/PAT performance; elevated Gold loan auctions of INR28b, which resulted in gold AUM remaining largely flat QoQ, stable spreads of 13%, despite an aggressive competitive landscape; GS3 increasing by ~200bp QoQ to 3.8%, suggesting that auctions will remain elevated in 4QFY22 as well to pare down GS3 to the management’s guided level of 2-3%.
- We estimate MUTH to deliver a gold loan growth of ~10% in FY22E.
- However, this incremental growth in 4Q will come at the cost of a minor compression in spreads/margin,.
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