In today’s briefing:
- Rainbow Children’s Hospital Pre-IPO – Still Growing but Not All Regions Have Been Performing
- India Channel Insight #32 | BYJU’S, Cars24, Udaan
- Mindtree: Reassuring Performance, Valuations Full
- Mindtree: 4Q in Line; Demand Visibility and Margin- Challenges in FY23
- ACC Ltd: Cost Inflation Drags Margin; Upcoming Capacity to Drive Growth
- Dalmia Bharat: Growth Insights Are in Place; Valuations Attractive
- PB Fintech: Leading Insurance Intermediary; Growth Trajectory Should Stand Out
- NHPC: Subansiri Project Progressing Well
- Tata Power: RE Business Stake Divestment to Bring in Growth Capital
- Aurobindo Pharma- Company Update- A strong rerating candidate
Rainbow Children’s Hospital Pre-IPO – Still Growing but Not All Regions Have Been Performing
- 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.
India Channel Insight #32 | BYJU’S, Cars24, Udaan
- 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.
Mindtree: Reassuring Performance, Valuations Full
- 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: 4Q in Line; Demand Visibility and Margin- Challenges in FY23
- 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 Ltd: Cost Inflation Drags Margin; Upcoming Capacity to Drive Growth
- 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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Dalmia Bharat: Growth Insights Are in Place; Valuations Attractive
- 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: Leading Insurance Intermediary; Growth Trajectory Should Stand Out
- 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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NHPC: Subansiri Project Progressing Well
- 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: RE Business Stake Divestment to Bring in Growth Capital
- 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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Aurobindo Pharma- Company Update- A strong rerating candidate
- 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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