In today’s briefing:
- OYO (Oravel Stays) IPO Initiation: Tripped Up
- Beyond 280 #6 | Zomato (Zomato IN) – Conversation with a Restaurant Chain E-Com Manager
- Advanced Enzyme Technologies
- FSN E-Comm (NYKAA IN): Macro, Micro & Marketing Drive Metric Growth
- Escorts: Results In Line with Expectations; Muted Outlook On Tractor Industry
- Mahanagar Gas (MGAS.NS) – U/G To Hold On Valuations
- Bata India: Building Levers for Sustainable Growth
- TVS Motor Co: Q3 Above Expectations, Encouraging Outlook; Maintain Buy
- Bajaj Electricals: High Base, Input Cost Pressure Drags Profit
OYO (Oravel Stays) IPO Initiation: Tripped Up
- Oyo (1698548D IN) is a leading hospitality technology platform. Its DRHP aimed for a $1.2 billion raise although recent reports point to a less than $1 billion raise.
- The fundamentals are mixed as it remains uncertain if it can deliver profits or cash generation with a return to growth (due to gradual lifting of travel restrictions).
- Based on the information in the DRHP, we believe the negatives outweigh the positives and we would give the IPO a pass.
Beyond 280 #6 | Zomato (Zomato IN) – Conversation with a Restaurant Chain E-Com Manager
- We interact with E-Com manager of a large restaurant chain in South India with an objective to understand key demand drivers and current ordering trends for OFD players.
- AOV and Order volumes have seen YoY increase in Q3FY22 for both Zomato (ZOMATO IN) and Swiggy.
- Amazon.com Inc (AMZN US) has seen a jump in Food Delivery orders, but remains a pilot and is not a major threat to either Zomato or Swiggy.
Advanced Enzyme Technologies
- Advanced Enzyme Technologies (AET) is a focused, research driven Indian enzymes company
- The business is divided into three segments – 1) human healthcare, 2) animal healthcare and 3) industrial processing business
- Target Price and Valuation: We value AET at Rs 380 i.e. 24x FY24E EPS of Rs 15.8
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.
FSN E-Comm (NYKAA IN): Macro, Micro & Marketing Drive Metric Growth
- FSN E-Commerce Ventures (Nykaa) (NYKAA IN) announced a steady growth across all key operating metrics in both the Beauty and Fashion verticals for the quarter ending 31st December 2021.
- Steady operating performance was helped by favorable macro (normalization in economic activity) and supportive sector-specific factors (Diwali, wedding season) as well as aggressive marketing (now 14% of revenues).
- Despite an 83% growth in 9MFY22 GMV and a resultant 89% growth in gross profits, EBITDA grew only 11% as increased marketing spend consumed most of the margin upside.
Escorts: Results In Line with Expectations; Muted Outlook On Tractor Industry
- Escorts Q3FY22 results were broadly in line with our expectations, driven by a richer Tractor mix and a recovery in the Railway business in Q3FY22
- The company reported total revenue of Rs 1,957 Cr (our estimate – Rs 1,911 Cr) against Rs 2,017 Cr in Q3FY21, a marginal de-growth of 3% YoY
- We maintain our HOLD rating on the stock keeping our target price unchanged at Rs 1,900, valuing the company at 19x FY24E P/E
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.
Mahanagar Gas (MGAS.NS) – U/G To Hold On Valuations
- Maintain TP and forecasts; HOLD
- Four price hikes in 3Q and once in Jan’21
- Higher input prices impacting profitability
- Negatives priced in; Downside likely capped
Bata India: Building Levers for Sustainable Growth
- Bata India is a major player in the Indian footwear market with a presence across men’s, women’s and kid’s footwear segment
- It has a pan-India presence with the largest network of retail stores in the footwear industry with 1600+ stores
- Target Price and Valuation: We maintain BUY recommendation on the stock and value Bata at Rs 2360 i.e. 50x 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.
TVS Motor Co: Q3 Above Expectations, Encouraging Outlook; Maintain Buy
- TVS Motors Ltd (TVSL) posted a robust set of numbers in Q3FY22 with the performance ahead of our expectations
- The company’s total export of two-wheelers (2W) and three-wheelers (3W) registered a growth of 13% YoY at 2.95 Lc units in Q3FY22, offsetting a decline of 20% in domestic sales (5.8 Lc units)
- We maintain our BUY rating on the stock with a revised target price of Rs 720 (from Rs 670 earlier) valuing the company at 22x FY24 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.
Bajaj Electricals: High Base, Input Cost Pressure Drags Profit
- Bajaj Electricals’ business portfolio spans across consumer products (CP) and EPC (illumination, power transmission and power distribution)
- The company has been reducing exposure in the EPC business with maximum on executing high margin business
- Target Price and Valuation: We value Bajaj Electrical at Rs 1280 using SOTP i.e.40x and 7x PE for CP and EPC respectively on FY24E EPS each
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.
Before it’s here, it’s on Smartkarma
