Daily BriefsIndia

India: ICICI Bank Ltd, Bajaj Auto Ltd, Asian Paints, Mastek Ltd, VST Industries, Havells India, Hindustan Unilever, Biocon Ltd and more

In today’s briefing:

  • ICICI Bank – Continued Improvement
  • Asian Paints: Near Term Volume Sustenance Key Amid RM Inflationary Pressure
  • Bajaj Auto: Strong Exports, Premiumisation & EVs to Drive Growth; Outlook Stable
  • Asian Paints: Strong Volume Growth Continues
  • Mastek Ltd: Deal Wins to Drive Momentum
  • VST Industries: Cigarettes Volume Nearly Back to Pre-Covid Levels
  • Havells India: Slower Price Hikes Delay Margin Recovery
  • Hindustan Unilever: Decelerating Rural Demand A Near Term Concern; Long Term Well Placed
  • Biocon: Biosimilar Traction Buoys up Q3, Momentum to Be Key
  • ICICI Bank Ltd | Q3FY22 Result Update

ICICI Bank – Continued Improvement

By Thomas J. Monaco

  • ICICI reported FY 3Q22 earnings of INR 61.9 bn, increasing INR 6.8 bn (12.4%) linked quarter, driven by net interest and fee improvement and a provision cut;  
  • Net new NPLs continued to increase 11.4% on an annualized basis at FY 3Q22 versus INR 44.1 bn 43.7% at FY 3Q21; and   
  • We find that ICICI is short on reserves to the tune of INR 116 bn or just over a half year of ICICI’s core operating result.

Asian Paints: Near Term Volume Sustenance Key Amid RM Inflationary Pressure

By Axis Direct

  • Asian Paints delivered topline for Q3FY22 a shade above our and street estimates
  • However, on profitability front it was a mixed bag performacne with Gross Margins continuing to witnesse inflationary headwinds
  • We revise our rating to HOLD (BUY earlier) with a revised TP of Rs. 3,200 (Rs. 3,300 earlier) we continue to value the stock at 57x FY24E EPS.
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Bajaj Auto: Strong Exports, Premiumisation & EVs to Drive Growth; Outlook Stable

By Axis Direct

  • Bajaj Auto (BAL) Q3FY22 results stood slightly ahead of our expectations, particularly on the margin front.
  • The company reported net revenues of Rs 9,022 Cr (our estimate – Rs 8,928 Cr) v/s Rs 8,910 Cr in Q3FY21, posting a flattish growth YoY
  • We maintain our BUY rating on the stock with a revised TP of Rs 4,250/share (Rs 4,500 earlier) (which includes Rs 320/share for the company’s stake in PMAG) as we value the stock at 17x its FY24E EPS.
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.

Asian Paints: Strong Volume Growth Continues

By ICICI Securities Limited

  • Asian Paints (APL) is India’s largest decorative paint company. The company derives ~98% revenue from the paints business
  • Strong distribution network of 70,000 dealers, 2x more than the No. 2 player
  • We revise our target price to Rs 3870/share and value APL at 66x P/E FY24E EPS
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.

Mastek Ltd: Deal Wins to Drive Momentum

By ICICI Securities Limited

  • Mastek Ltd (Mastek) offers data, apps, cloud services to public & private enterprise in the UK, US, Middle East, Asia Pacific and India
  • The company’s recent acquisition of Evosys has enabled Mastek to provide end-to-end solutions and improves margins from ~14% to 21%
  • We now assign BUY rating to the stock (from HOLD earlier). We value Mastek at Rs 3,360 i.e. 26x P/E on FY24E EPS
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.

VST Industries: Cigarettes Volume Nearly Back to Pre-Covid Levels

By ICICI Securities Limited

  • VST Industries (VST) is among the oldest cigarette players in India, involved in manufacturing and marketing cigarettes as also trading unmanufactured tobacco
  • The company has two cigarettes manufacturing facilities in Hyderabad, AP. 
  • Target Price and Valuation: We arrive at a revised target price of Rs 3425, valuing the business at 14x FY24 earnings.
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.

Havells India: Slower Price Hikes Delay Margin Recovery

By ICICI Securities Limited

  • Havells India (HIL) is India’s leading electrical appliances & equipment manufacturer with a diversified product portfolio
  • In all its business segments, Havells has a strong presence in the organised product category with market share ranging between 6% and 20%
  • We value the stock at 53x FY24 EPS and revise the target price to Rs 1515/share
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Hindustan Unilever: Decelerating Rural Demand A Near Term Concern; Long Term Well Placed

By Axis Direct

  • Hindustan Unilever (HUVR IN) performance was in-line with our and street expectations on key performance metrics.
  • Reported sales grew by 10.4% yoy at Rs. 13,092Cr with underlying domestic consumer sales growth (USG) of 11% on the back of a 2% UVG (our estimate 2%)
  • Maintain BUY with revised TP of Rs. 2,700 (earlier Rs. 2,900) valuing the stock at 56x FY24E EPS. At CMP, risk-reward appears fair from a long-term perspective.
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Biocon: Biosimilar Traction Buoys up Q3, Momentum to Be Key

By ICICI Securities Limited

  • Biocon mainly operates in biologics (biosimilars), small molecules (generics), branded formulations and contract research (Syngene)
  • Robust biosimilar portfolio with partners like Viatris, Sandoz (for future launches), Adagio among others
  • Target Price and Valuation: We value Biocon at Rs 410 on SOTP basis
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ICICI Bank Ltd | Q3FY22 Result Update

By Edelweiss

Yet another quarter of superior credit growth

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