In today’s briefing:
- NIFTY Indices: Quiddity Leaderboard for September 2022
- Japan Airport (9706): Not the Best Proxy for Japan Reopening.
- Conch Environment (587 HK): Don’t Overly Bet on the Blue Sky Scenario
- Ashoka Buildcon Ltd – EPC Business Outlook Robust; Awaiting Further Asset Sale
- Container Corporation of India – No Clarity yet on Land Licence Fees; Higher Ca
- Praj Industries Ltd – Growth Engines Fired, Aided by Strong Execution
NIFTY Indices: Quiddity Leaderboard for September 2022
- The NIFTY Index Family has a series of broad equity indices that represents large, mid and small market capitalisation segments of the Indian public equity market.
- The review of broad market indices will be done on a semi-annual basis and the changes will be implemented at the end of March and September every year.
- Below is a look at the names leading the race to become Adds and Deletes for NIFTY 50, NIFTY 100, and NIFTY 500 in September 2022.
Japan Airport (9706): Not the Best Proxy for Japan Reopening.
- Japan’s reopening has started and pre-departure and on arrival tests for vaccinated tourists have also been abolished.
- The beneficiary of this theme is less obvious for Japan Airport Terminal Co (9706 JP) while it is very obvious for Keisei Electric Railway Co (9009 JP) .
- Japan Airport is trading at a PBR premium to Keisei while the former has a higher debt than the latter.
Conch Environment (587 HK): Don’t Overly Bet on the Blue Sky Scenario
- The sharp plunge in share price of China Conch Environment Protection Holdings (587 HK) has not yet brought its valuations back to more reasonable levels and we see more downside.
- Its 10.1x PER for FY22F is at a significant premium over peer average. Even taking into account the impressive ROE, we still cannot find justifications for its high P/B multiple.
- Negative catalysts include overly aggressive expansion target, slower profit growth than rise in capacity and surge in gearing and finance costs – they will potentially lead to earnings disappointment.
Ashoka Buildcon Ltd – EPC Business Outlook Robust; Awaiting Further Asset Sale
- 4QFY22 performance: ASBL’s revenue grew by 12.4% YoY to Rs15.6bn (4% ahead of our estimate), led by strong order execution while absolute EBITDA at Rs1.56bn declined by 22% YoY (in-line with our estimate). EBITDA margin came in at 10%, which was down 448bps YoY and 50bps lower than our expectation.
- Highest-ever orderbook at Rs137bn: The total OB as on 31st March’22 stood at Rs137.3bn, which included Rs79bn of road projects.
- Update on asset business: The company has already signed SPA for the sale of 5 BOT projects to KKR and 1 BOT project to NIIF, which will be concluded this year.
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Container Corporation of India – No Clarity yet on Land Licence Fees; Higher Ca
- (1) The company has paid LLF of Rs4.65bn in FY22 against expectation of Rs4.50bn (as stated by management).
- (2) Export volume grew marginally by 0.5% QoQ in 4QFY22 due to container shortage amid the Russia- Ukraine crisis and higher freight costs.
- (3) The land policy is still under discussion with the government.
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Praj Industries Ltd – Growth Engines Fired, Aided by Strong Execution
- Strong Demand for Domestic Grain: During Q4FY22,66% of the new orderbook was for Grain-based capacity(starchy feedstock), indicating momentum in Grain-based distilleries.
- Key Business Updates: India has achieved the highest-ever Ethanol blend of ~10% in 2022.
- Strong Execution: The company is witnessing more growth in Grain-based distilleries which has reduced the seasonality of the business which was predominantly based on the sugar cycle.
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.
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