In today’s briefing:
- Paradeep Phosphates IPO – Smallest of the Lot and Fairly Valued as Well
- India Channel Insight #34 | Eicher (Royal Enfield), TVS Motors, Hero MotoCorp
- Morning Views Asia: Bharat Petroleum Corp
- Kajaria Ceramics – Soaring Gas Prices Dent Margins
- Minda Corporation – Sustains Healthy Growth; Maintain Accumulate
- 4QFY22 Result Update – Bajaj Electricals
- Steel Strips Wheels: Well-Placed to Capitalize on Auto Revival; Outlook Remains Positive
- IOC- Refining Gain Offset by Marketing Pain
- Indoco Remedies – Strong Growth in Regulated Markets
Paradeep Phosphates IPO – Smallest of the Lot and Fairly Valued as Well
- Paradeep Phosphates (75690Z IN) is looking to raise up to US$194m in its India IPO. The IPO will consist of a mix of primary and secondary shares.
- Paradeep Phosphates (PP) is a fertilizer manufacturing company based in India. The firm engages in manufacturing, trading, distribution and sales of a variety of complex fertilizers.
- At listing, while PP would be the smallest peer on the revenue and mcap fronts, it trails our identified peer set on the margin front as well.
India Channel Insight #34 | Eicher (Royal Enfield), TVS Motors, Hero MotoCorp
- We speak to channels across West, North and South to understand the 2W demand environment
- Mid segment is still not seeing recovery, premium and lower end segment is stabilising / doing relatively better.
- Restoration of supplies and aggressive marketing strategies can aid volume recovery for TVS Motor (TVSL IN) and Eicher Motors (EIM IN)
Morning Views Asia: Bharat Petroleum Corp
Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.
Kajaria Ceramics – Soaring Gas Prices Dent Margins
- Q4FY22 performance: Kajaria posted lower-than-estimated margin (~200bps miss) in Q4FY22, as margin compressed QoQ on rising gas prices (crude linked).
- Outlook: For FY23, KJC targets volume/revenue growth of ~15-20%/20-25%.
- It expects India’s tiles export to increase by ~35% YoY, as sharp spikes in gas and electricity prices in European countries have increased Indian tile’s competitiveness.
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Minda Corporation – Sustains Healthy Growth; Maintain Accumulate
- Revenue ahead of estimate; decent operating margin: Revenue for 4QFY22 stood at Rs9.48bn (our est. Rs7.6bn) and was up by 19.4% YoY and 28.4% QoQ, mainly due to consolidation of MIL figures in this quarter (MIL revenue stood at Rs1.38bn).
- Revenue share from the 2W segment declined slightly, which was in line with the decline in the 2W industry as a whole.
- Mechatronics, AM & others revenue grew by 6% YoY with 13.4% margin while margin in the ICS segment came in flattish at 7.4%. EBITDA grew by 36.9% QoQ to Rs1,077mn.
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4QFY22 Result Update – Bajaj Electricals
- Consumer Product segment update: For 4QFY22, Appliance revenue declined by 5.3% YoY due to a high base.
- EPC Segment Update: EPC sales grew by 5% YoY, mainly due to calibrated and value-accretive scaling.
- OCF and debt position: BJE generated positive cash flow from operations (CFO) of Rs2.6bn in FY22, making it 12th consecutive quarter of positive CFO.
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Steel Strips Wheels: Well-Placed to Capitalize on Auto Revival; Outlook Remains Positive
- We retain our BUY rating on the stock valuing it at 5.5x FY24E EV/EBIDTA arriving at a target price of Rs 1,000/share, (Rs 1,075/ share earlier) implying an upside of 30% from CMP.
- Steel Strip Wheels Ltd (SSWL) reported a mixed set of numbers in Q4FY22 supported by the improvement in alloy wheels and the PV segment.
- Revenue for the quarter improved by 24% QoQ to Rs 1,063 Cr (our estimate – Rs 990 Cr).
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IOC- Refining Gain Offset by Marketing Pain
- Net revenue came in at Rs1,772.9bn vs NBIE estimate of Rs2,071.6bn and a 9% miss vs street; it was up 43.3% YoY.
- EBITDA stood at Rs116.3bn vs. NBIE estimate of Rs121.8bn and 2.9% miss vs street; it was down 13.8% YoY.
- 4QFY22 Petchem segment performance was also under pressure – segment revenue was up from Rs63.82bn in 4QFY21 to Rs80
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Indoco Remedies – Strong Growth in Regulated Markets
- The company expects to launch 6-7 ophthalmic products in the US. We expect IRL to be the third generic player to launch gCombigan, which has a market size of ~US$400mn in the US market.
- IRL has enough API and excipients inventory to last for the next two month.
- Launched 6 new products in the Indian market in FY22, including Subitral, which was the fastest brand to reach Rs10mn sales within just 40 days of its launch
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