In today’s briefing:
- India Channel Insight #25 | Mahindra and Mahindra, Escorts
- Affle India: Strong Growth in Converted Users
- HSIE Results Daily: Astral, Aarti Industries , Aditya Birla Capital, Narayana Health, Radico…
- Minda Corp: Stable Performance; Long Term Outlook Positive
- Shree Cement: Stable Outlook; Trading at Premium Valuations
- Tata Steel: Capex to Rise with Delayed Returns
- HG Infra Engineering: Growth Momentum Continues; Retain BUY
- Affle India: Growth Led by Robust Device Addition; Margin Profile to Improve
- St Bk of India: Performance On-Track with Strong Visibility; Maintain BUY
- Minda Industries: Robust Performance; Outlook Remains Positive
India Channel Insight #25 | Mahindra and Mahindra, Escorts
- We interact with two dealers of Mahindra & Mahindra (MM IN) & Escorts Ltd (ESC IN)
- High pressure on billing is denting dealer profitability leading to dealership closures
- Weddings and changing spending patterns suggest a weak demand environment likely to continue.
Affle India: Strong Growth in Converted Users
- Affle India (Affle) is a technology platform that enables advertisers to do targeted advertising.
- It helps advertisers to measure the effectiveness of advertisement as it charges only when a user downloads an app or completes a transaction
- Target Price and Valuation: We value Affle at Rs 1,500 i.e. 67x P/E on FY24E EPS
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HSIE Results Daily: Astral, Aarti Industries , Aditya Birla Capital, Narayana Health, Radico…
- Astral: We maintain our REDUCE rating on Astral with a revised TP of INR 2,180/sh (34x its Dec-23E consolidated EBITDA, implying 53x P/E)
- Aarti Industries: We maintain our BUY recommendation on Aarti Industries (AIL) with a target price of INR 1,380/share
- Aditya Birla Capital: We maintain BUY on ABCL with a revised SOTP-based TP of INR157 and initiate coverage on ABSLAMC with a target price of INR720
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Minda Corp: Stable Performance; Long Term Outlook Positive
- Minda Corporation (Minda Corp) Q3FY22 performance was stable but marginally below of our estimates.
- The company reported revenue of 738 Cr (our estimate – Rs 766 Cr), remaining flat QoQ
- We revise our rating from HOLD to BUY and value the stock at 17x FY24E EPS to arrive at a target price of Rs 230/share.
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Shree Cement: Stable Outlook; Trading at Premium Valuations
- Shree Cement is the third largest cement group in India with domestic cement capacity of 43.4 MT as of FY21.
- In the past four years, it has diversified itself from a 100% north player to one with capacities now in Rajasthan, Uttarakhand, Bihar, Chhattisgarh, Haryana, Uttar Pradesh, Karnataka and Odisha
- Target Price & Valuation: We value Shree at Rs 28,700 i.e. 21.5x FY23E EV/EBITDA
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Tata Steel: Capex to Rise with Delayed Returns
- Tata Steel reported strong result on a standalone basis. Europe, however, disappointed due to a surge in energy and coal costs.
- Consolidated EBITDA was 66% higher on a YoY basis, but 3% lower sequentially
- EBITDA rose 82% YoY to INR121.7b (10% ahead of our estimate), despite a 9% QoQ drop fueled by rising coking coal prices that was not fully offset by a marginal increase in ASP
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HG Infra Engineering: Growth Momentum Continues; Retain BUY
- HG Infra Engineering Ltd (HGIEL) reported a healthy set of Q3FY22 numbers
- The company reported APAT margins of 9.7% against 8.9% in Q3FY21 while also maintaining its growth momentum.
- We retain a BUY rating on the stock with a target price of Rs 890/share, implying an upside of 41% from the CMP.
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Affle India: Growth Led by Robust Device Addition; Margin Profile to Improve
- Affle Ltd. (Affle) reported a strong growth backed by robust device addition
- The company’s Q3FY21 revenue stood at Rs 339 Cr, up 23.6% QoQ and 125.5% YoY
- We recommend a BUY on the stock and assign 49x P/E multiple to its FY24E earnings of Rs 29.46/share which gives a TP of Rs 1,450/share, implying an upside potential of 15% from CMP.
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St Bk of India: Performance On-Track with Strong Visibility; Maintain BUY
- SBI’s earnings traction continued in Q3FY22 and was up 62% YoY, led by a 33% YoY decline in provisions and 7% YoY growth in PPOP
- The bank continues to positively surprise on the asset quality front with slippages of 0.4%, restructured book at 1.2%, and lower SMA book (~16bps) during Q3FY22
- We maintain a BUY on the stock with a revised target price of Rs 720/share (SOTP basis core book at 1.3x FY24E and subsidiaries at Rs 211).
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Minda Industries: Robust Performance; Outlook Remains Positive
- Minda Industries Ltd. (MIL) reported a decent set of results in a tough environment and the same was in line with our estimates
- Despite a decline in automotive production due to semi-conductor shortages
- We upgrade our rating from HOLD to BUY with a revised target price of Rs 1,250 (Rs 1,000 earlier), valuing the stock at 32x FY24E EPS, indicating an upside of 12% from the CMP.
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