India: Rainbow Children’s Hospital, BYJU’S, Mindtree Ltd, ACC Ltd, Dalmia Bharat, Policybazaar, NHPC, Tata Power, Aurobindo Pharma and more

• Rainbow Children’s Hospital (RCH) aims to raise around US$250m via issuing a mix of primary and secondary shares in its India IPO.
• RCH is a multi-specialty pediatric and obstetrics and gynecology hospital chain in India, operating 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds.
• In this note, we will talk about the company’s past performance.

• This channel insight focuses on private unicorns backed by Blackrock Inc (BLK US), Tencent (700 HK), Alibaba Group (9988 HK).
• There are indications of organic growth slowing down. Cash burn is probably the only possible way to cross the high operating performance seen during COVID.  
• Investor pressure is mounting, leading to mass hiring or firing in the Industry. 

• MTCL reported a revenue of USD384m (+5.2% QoQ CC) in 4QFY22.
• Reported revenue grew 4.8% (inline), driven by broad-based growth across verticals and regions.
• Deal TCV rose 9% QoQ to USD390m in 4QFY22.

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• Mindtree’s (MTCL) 4QFY22 revenue at US$383.8mn, grew by 5.2% QoQ in CC terms, marking 6th consecutive quarter of 5%+ growth, but was tad lower than our estimate of 6%.
• EBIT margin of ~18.9% was in line, contracting by 30bps QoQ.
• TCV of ~US$390mn (US$375mn in 4QFY21) reflects the need for pick-up in order inflow…(continued).

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• ACC reported revenue growth of 3% YoY and Volume/EBITDA/APAT de-growth of 3%/26%/30% respectively YoY, attributable to lower volume growth and higher cost during the quarter.
• The company recorded an EBITDA Margin of 14.3% against 20% YoY, which was below our expectation of 17.6%, primarily owing to the elevated input costs
• We value ACC at 10x its CY23E EV/EBITDA to arrive at a TP of Rs 2,300/share, implying an upside of 12% from the CMP

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• DALBHARA is a dominant player in East India with a clinker/grinding capacity share of 18%/17%.
• The company will be a beneficiary of: 1) improved consolidation in the region, which should aid an improvement in Cement prices and 2) recent increase in Cement prices in East India.
• The management has set yet another aggressive capacity addition target to emerge a pan-India player and achieve a grinding capacity of 110-130mtpa by CY31 (at a 14-15% CAGR)

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• PB Fintech (PBF) is among the leading insurance and lending intermediaries in India.
• It operates principally through its platforms PolicyBazaar/PaisaBazaar, and has also entered into newer businesses.
• PBF is well placed to benefit from the rising insurance penetration in India, especially through digital distribution.

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• We visited NHPC’s Subansiri Lower hydroelectric project, India’s largest hydro plant under construction with a generation capacity of 2,000MW situated at the Arunachal Pradesh – Assam border in the North-East.
• With both the states completely on board and strict monitoring with monthly visits by board level officials of NHPC and senior power ministry officials, the project is progressing at a rapid pace.
• Another positive outcome of the progress at Subansiri is that GoI is now working to fast-track other large hydro projects including Dibang (2,880MW), and revive Upper Subansiri (2,000MW) and Middle Subansiri (1,800MW).

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• Tata Power (TPWR) has concluded the long-awaited divestment of stake in its renewables (RE) businesses.
• It has consolidated all its RE businesses under one holdco – TPREL – and will be raising Rs40bn by offloading 10.53% stake in the same to GreenForest New Energies Bidco Limited (UK), a consortium of BlackRock and Mubadala, all of which will be used as growth capital for TPREL.
• As per our calculations, the transaction will be at an EV of ~Rs520bn-530bn, with pre-money equity valuation of Rs340bn.

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• We maintain our earnings estimates on Aurobindo Pharma Limited (APL) and reiterate our Buy rating on the stock with a target price (TP) of Rs864, valuing it at 16x March EPS.
• APL may be on a rerating journey over the next two years, led by multiple events.
• Potential demerger/divestment of Injectables business Approval and ramp-up of biosimilar drugs in the US and Europe Gradual ramp-up of domestic formulations business…(continued).

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