In today’s briefing:
- Life Insurance Corporation of India IPO – The Positives – Operates on a Grand Scale
- Natco Pharma Limited: One-Off Drives Revenues; All Eyes on Future Launches
- Ambuja Cement: Expansion to Drive Growth Momentum
- Pick of the Week – Hindustan Unilever Limited
- IPCA Laboratories: Domestic Outperformance Offset by Drag in Exports
- Life Insurance Corporation of India IPO – The Negatives – Has Been Lagging the Sector
- Mahindra Logistics Ltd: New Customers, Seasonality Impacts Margins
- Nestle India: RM Headwinds Persist; Await Better Entry Points
- Nestle India: Staring at High Inflation in Multiple Commodities
- Optimising and monetising user funnel to drive customer lifetime value
Life Insurance Corporation of India IPO – The Positives – Operates on a Grand Scale
- Government of India (GoI) is looking to raise around US$5-10bn via selling a 5% stake in Life Insurance Corporation of India (LIC) in its upcoming India IPO.
- As of FY21, LIC was the largest life insurer in India with a 64.1% market share in terms of GWP, a 66.2% market share in terms of NBP.
- In this note, we talk about the positive aspects of the deal.
Natco Pharma Limited: One-Off Drives Revenues; All Eyes on Future Launches
- Natco has, over the years, developed a knack for manufacturing complex generic products with few competitors, especially for the US market
- India formulations mainly comprise oncology products (+33 launches).
- FY21 revenue break-up – Domestic Business: 19%, International Business: 50% (mainly from the US), APIs: 24%
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.
Ambuja Cement: Expansion to Drive Growth Momentum
- Ambuja Cement (Holcim group company) is a large cement player with capacity of 31.5 MT
- Upcoming new capacity in Punjab (1.5 MT) and eastern region (7.0 MT including clinker 3.2 MT) will enhance its cement capacity by ~8.5 MT to 40.0 MT
- In the phase II, the company plans to reach over ~50 MT capacity through capacity expansion in western region along with significant de-bottlenecking
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.
Pick of the Week – Hindustan Unilever Limited
- Hindustan Unilever Limited (HUL), the largest FMCG player in India, was formed by merging three subsidiaries of Unilever in 1956.
- HUL’s portfolio of products covers a wide spectrum
- Powerful brands and an envious distribution network are its primary strength
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.
IPCA Laboratories: Domestic Outperformance Offset by Drag in Exports
- Ipca is a fully integrated pharma company manufacturing over 350 formulations and 80 APIs with exports contributing 50% of revenues in FY21
- Major therapeutic segments include pain management, cardiovascular and anti-diabetics, anti-infectives, anti-malarials, which together account for 75% of revenues
- Target Price and Valuation: Valued at Rs 1175 i.e. 24x P/E on FY24E EPS of Rs 48.9
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.
Life Insurance Corporation of India IPO – The Negatives – Has Been Lagging the Sector
- Government of India (GoI) is looking to raise around US$5-10bn via selling a 5% stake in Life Insurance Corporation of India (LIC) in its upcoming India IPO.
- As of FY21, LIC was the largest life insurer in India with a 64.1% market share in terms of GWP, a 66.2% market share in terms of NBP.
- In this note, we will talk about the not so positive aspects of the deal.
Mahindra Logistics Ltd: New Customers, Seasonality Impacts Margins
- Mahindra Logistics is an end-to-end 3PL logistics solution provider, from performing milk run to in-factory logistics, warehousing to first mile and last mile logistics
- Serves over 400 customers via its two business segment: supply chain management [(SCM), 96% of revenues] and enterprise mobility
- Revenues from Mahindra comprise 52% of SCM revenues (FY21) while the rest is contributed by non-Mahindra
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.
Nestle India: RM Headwinds Persist; Await Better Entry Points
- Nestle India (NEST) reported Revenues for Q4CY21 in-line with our estimates;EBITDA & PAT were however a miss
- Clear signs of pressure have been noted on Gross Margins owing to inflationary RM
- We Maintain HOLD with unchanged TP of Rs18,600 as at CMP the risk-reward is unfavourable even as the long term growth trajectory appears fair (20+ projects in pipeline).
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Nestle India: Staring at High Inflation in Multiple Commodities
- Nestlé India (NIL) is the largest food company in India with over Rs 14000 crore of sales
- It is broadly present in infant & baby food products, noodles, chocolates & beverage categories.
- In the last five years, the company has forayed into newer categories and launched more than 100 new products.
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.
Optimising and monetising user funnel to drive customer lifetime value
- One 97 Communications’ (OCL or Paytm used interchangeably in the report) two-sided digital ecosystem of 64.4mn average monthly transacting users (MTUs) (as at Dec’21) from >350mn consumer base and over 24.9mn merchants is core to its unit economics.
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