Disclamer: These views have been done by an anylast
LIC: The company reported embedded value at Rs. 5,41,492 as compared to Rs. 95,605 crore as on March 31, 2021. Its embedded value as on September ’21 was at Rs. Rs 5,39,686. For FY22, the value of its new business (VNB) margin improved to 15.1% as compared to 9.9% in FY21. The company’s annualised premium equivalent (APE) for FY22 is at Rs 50,390 crore versus Rs 45,588 crore in FY2, up by 11% y-o-y. The APE of individual business and group business was Rs 35,572 crore and Rs 14,818 crore, respectively. Therefore, the individual business accounted for 70.59% of APE and group business accounted for 29.41% of APE. Also, within the individual business, the par business share on the APE basis was 92.88%, while the remaining 7.12% was from the non-par business. The ROEV (return on embedded value) for March 21, 2022, stood at 11.9% to 36.9% for March 2021. Positive read through. Its VNB margins was up by 53% y-o-y to 15.1% in FY22.
Adani Ports and SEZ: As per media reports, the company won the tender for privatisation of port of Haifa in Israel with its partner Gadot at a bid price of 4.1 billion shekels ($ 1.18 billion). As per the deal, Adani will hold 70% stake and balance 30% will be held by Gadot. Both the companies would operate the port until 2054. Positive for the stock.
Cipla: wholly owned subsidiary and consumer healthcare arm – Cipla Health Limited (CHL), definitive agreements for acquisition of Endura Mass, a renowned nutritional supplement brand in the category of weight gain from Medinnbelle Herbalcare Private Limited. The acquisition includes “Endura” and all other associated trademarks. This acquisition is in line with Cipla's strategic imperative to augment the Company's wellness portfolio. Positive
Syngene: Signs a 10 year agreement with leading animal health company, Zoetis, to manufacture the drug substance for Librela, a first in class monoclonal antibody used for treating osteoarthritis in dogs. This agreement, initially centred on Librela®, paves the way for development and manufacturing of other molecules in the coming years and is expected to be worth up to US$ 500 Mn to Syngene over 10 years. This agreement makes syngene a leading CDMO in the animal health globally - positive
Result on Saturday
U.S. weekly jobless claims hit 8-month high. Initial unemployment claims increased by 9,000 to 244,000 in the week ended July, 9. The figure stands a bit above the 2019 pre pandemic weekly average of 218,000, when the U.S. labor market was also strong. Other data suggest that U.S. labor market remains solid, but is starting to soften slightly. Employers added 372,000 jobs in June, a robust gain but lower than the May increase. The unemployment rate held at a low 3.6% in June for the fourth consecutive month.
§ China Q2 GDP up 0.4% yoy vs estimates of 1.2% growth. Industrial production in June also missed expectations, rising by 3.9% from a year ago, versus the 4.1% forecast. However, June retail sales up 3.1% yoy vs estimates of 0.3% growth.
§ India's merchandise trade deficit in the month of June widened to $26.18 billion from $9.60 billion in June 2021. While the overall trade deficit widened to $17.52 billion in June this year from $0.14 billion in June 2021. Exports rose by 23% yoy, imports up 55%yoy. In the first quarter of the ongoing fiscal, the merchandise trade deficit widened from $31.42 billion in Q1FY22 to $70.80 billion in Q1FY23. The overall trade deficit in the same period swelled from $5.61 billion to $45.18 billion.
First cut: Tata Elxsi Q1FY2023 results highlight: A strong start
· Tata Elxsi (TEL) reported strong revenue growth of 6.5% q-o-q on CC, in-line with our estimates, led by strong volume growth, while EBIT margin beat our expectations. Net profit was 12% ahead of our estimates, led by margin beat and lower tax provision (19% in Q1FY23 vs 27.4% in Q4FY22).
· The company reported constant currency revenue growth of 6.5% q-o-q and 30.9% y-o-y, led by broad-based growth across segments.
· EBITDA margin improved by 36bps q-o-q to 32.8%, led by strong growth and lower other expenses to total revenues.
· Net profit of Rs. 184.7 crore (up 15.4% q-o-q and 62.9% y-o-y) was 12% ahead of our estimates aided by beat in operating profitability and lower tax provision. The company added 771 employees on a net basis in the quarter, which is more than 2x on q-o-q.
· View: TEL delivered another quarter of strong revenue growth with industry leading margin performance. Strong deal inflow, robust net headcount addition, healthy deal pipeline and higher client mining provides visibility of strong growth for FY2023E, especially in an environment where headwinds could emanate from a deteriorating macro. Further, the company won strategic multi-year large deals across all its three verticals. We have Buy rating on the stock.
Stock Update: L&T Infotech- Q1FY23 results review: Steady quarter; poised to ace growth race
Rating: Buy Reco Price: Rs. 3,874 Target price: Rs. 4,750
· LTI reported in-line revenue growth, while EBIT margin beat our expectations despite wage revision and rising travel expenses. Deal TCV and pipeline continued to stay strong. Q1 also saw strong F-500 logo additions and heathy net hiring.
· LTI remains confident of delivering industry-leading growth in FY2023E with stable net profit margin of 14-15%. The deal win momentum is expected to remain strong in Q2FY2023E.
· Robust deal wins, good client mining strategies, healthy net hiring and a strong demand outlook in its key verticals provide visibility of strong revenue growth in FY2023E. Further, its EBIT margin to improve sequentially in the remaining quarters of FY2023 because of the absence of wage revision, stabilisation of attrition, and operating leverage.
· We maintain a Buy on LTI with a revised PT of Rs. 4,750 given its strong deal wins, consistent logo additions in its Fortune 500 client base, and healthy demand outlook in its key verticals.
Viewpoint – PCBL Limited: Set to gain from CB margin cycle, capacity expansion
View: Positive Reco Price: Rs111 Upside potential: 21%
We stay Positive on PCBL Limited and expect a 21% upside as favourable carbon black (CB) cycle bodes well for margins and valuation of 8.3x FY24E EPS is attractive, as it is at discount to historical average multiple.
Sanctions on Russia could affect its 1.1 mt CB capacity (mainly export-oriented) and disrupt supply. This would drive up CB margins and thus we expect PCBL’s Q1FY23 margins to improve sequentially.
PCBL’s CB capacity expansion of 1.5 lakh tonnes (by December 2022) is rightly timed as global supply shortages could aid faster ramp-up of new capacity (India’s share in global CB market likely to rise to 15% by FY25E versus 12% in FY22E). Thus, we see an upside to our volume CAGR of 10% over FY22-24E.
A strong CB margin cycle and likely faster than expected volume ramp-up for new capacity provides upside to our FY23-24 earnings estimates, which we would review post Q1FY23 results. Also, low net D/E ratio of 0.2x and healthy dividend yield of 4% provides comfort.
Marico: Annual Report highlights – maintain medium aspiration of high single digit volume growth; margins to improve in FY2023
· Marico expects demand and margin trends to improve towards second half of FY23 on likely easing of crude and edible oil prices in next few months.
· The consolidated operating margins (OPM) should be at around 18-19% in FY2023 (stood at 17.7% in FY2022).
· Market share gains, penetration improvement in the key categories and distribution expansion will help to post growth ahead of the industry growth.
· In rural India, the company’s main focus is on extending its footprints and expanding its stockist network to expand the direct reach. In urban market the company maintain focus on augmenting reach in chemist and cosmetic outlets.
· International business has maintained a steady momentum and is confident of maintaining the double-digit constant currency growth momentum in the coming quarters.
· The company holds its medium term aspiration of delivering 13-15% revenue growth on back of 8-10% volume growth in the domestic market and high double digit constant currency growth in the international market.
View: Marico’s earning performance in FY2023 is expected to be much better compared with other FMCG companies due to better margin picture on back of benign copra prices, which are likely to remain soft in the current fiscal. Hence we maintain it as one of the top picks in the FMCG space. We have a Buy rating on the stock.
Bharti Airtel: The company said it has allotted over 7.1 crore equity shares to Google for Rs 734 apiece. The allotment is part of Google's commitment to invest $1 billion with Airtel, which included equity investment in the company worth $700 million, about Rs 5,224 crore – neutral read-thru
BEML (Bharat Earth Movers Limited): BEML has received orders worth RS 261 cr for supply of motor coaches and trailer coaches from the Indian Railways for 3 phase Mainline Electric Multiple Unit (EMU) trains. The order is expected to be executed by July 2023. Positive read thru for the stock
Source : Sharekhan