In today’s briefing:
- Rainbow Children’s Hospital – Recent Updates and Peer Comp
- ICICI Bank Ltd: Outperformance Continues; Maintain BUY
- HCL Technologies: P&P an Optical Drag but Services Strong
- KNR Constructions: Superior Execution with a Comfortable Balance Sheet
- Larsen and Toubro: Strong Demand and Improving Deal Flow to Drive Growth in FY23
- Angel One (4QFY22 Results Review): Rising and Shining; Maintain BUY
- Rainbow Children’s Hospital IPO – Thoughts on Valuation
- Cyient: Ambitious FY23 Guidance, but Valuations Remains Inexpensive
Rainbow Children’s Hospital – Recent Updates and Peer Comp
- Rainbow Children’s Hospital (RCH) aims to raise around US$200m 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 recent updates and peer comparison.
ICICI Bank Ltd: Outperformance Continues; Maintain BUY
- ICICI Bank (ICICIBC) reported yet another strong performance in Q4FY22 with a 59% YoY earnings growth, driven by 21% YoY growth in PPOP and a sharp decline of 63% YoY in provisions.
- The company’s NII growth was robust at 21% YoY, supported by a healthy loan book growth of 17% YoY and marginal NIM expansion (4% vs 3.96% in Q3FY22).
- We maintain a BUY rating on the stock with a revised target price of Rs 1,000 (SOTP basis core book at 2.8x FY24E ABV and Rs 173 Subsidiary Value), implying an upside of 34% from CMP.
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.
HCL Technologies: P&P an Optical Drag but Services Strong
- While we have underweighted the IT sector (Report) HCL Technologies (HCLT) is a preferred pick due to (1) Significant narrowing of growth differential in FY23 despite disappointment on revenue guidance – vis-à-vis Indian Tier-1 growth leader Infosys.
- We also see modest acceleration in FY23 while most Tier-1 peers will see deceleration
- Our view that underlying growth in Products and Platforms (P&P) business is positive…(continued).
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.
KNR Constructions: Superior Execution with a Comfortable Balance Sheet
- KNRC sits on a strong order book of ~INR100b (excluding recently won projects), which provides clear revenue visibility for the next three years.
- It has received appointed dates (AD) for two HAM projects in Jan’22 and financial closure (FC) in one HAM project in Apr’22, which will support execution in FY23E and FY24E.
- We expect margin to stay elevated, despite inflationary pressures from higher commodity prices, as a sizable portion (~26%) of its order book consists of irrigation projects.
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.
Larsen and Toubro: Strong Demand and Improving Deal Flow to Drive Growth in FY23
- LTTS reported a 3.6% QoQ CC growth in 4QFY22, 90bp below our estimate due to softer growth in Industrial Products (-0.5% QoQ), Medical Devices (flat QoQ), and Telecom and Hi-Tech (+1.1% QoQ), while Transportation grew a robust 7.8% QoQ.
- Despite the large 400bp shift in its on-site revenue mix and lower utilization (-80bp QoQ), operating margin was flat QoQ.
- Attrition spiked to 20.4% (+290bp QoQ) in 4QFY22, indicating continued supply pressures.
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.
Angel One (4QFY22 Results Review): Rising and Shining; Maintain BUY
- ANGELONE printed 15% growth in topline sequentially on a strong base (15% Q3), resulting in an 11% beat, led by better-than-estimated customer activity (higher average revenue-generating orders per customer) and stronger ancillary transactional revenue
- We are comforted by ARGO’s indicators of stabilisation, which include higher quality customer adds and improved activation levels
- Given the flat-fee model, ANGELONE is one of the best plays on the secular growth story in Indian capital markets and our highest-conviction BUY.
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.
Rainbow Children’s Hospital IPO – Thoughts on Valuation
- Rainbow Children’s Hospital (RCH) aims to raise around US$200m 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 our earnings forecast and thoughts on valuation.
Cyient: Ambitious FY23 Guidance, but Valuations Remains Inexpensive
- Revenue fell 0.4% QoQ in USD CC terms in 4QFY22, but was above our estimate of -1.1% QoQ USD CC.
- The beat was led by both Services (+1.6% QoQ USD CC) and DLM (-9.3% QoQ USD).
- Growth in Services was driven by Portfolio (10% QoQ), Aerospace (3.9%), and Communications (3.5%), while growth in Rail Transportation (-9.5%) was weak.
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