Bull-run halts as auto, metal stks dip; Sensex ends flat, Nifty holds 15100
The Nifty Auto, Metal, and Pharma indices settled over 1 per cent lower each
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9:26 AM
Vodafone Idea trades flat
>> The Indian government has challenged in the Singapore High Court an international arbitration tribunal's verdict that overturned its demand for Rs 22,100 crore in back taxes from Vodafone Group Plc.
9:24 AM
Tata Steel trades marginally higher ahead of Q3 nos
9:22 AM
Sectoral trends on NSE :: Media, PSB stocks underperform
9:20 AM
Sensex Heatmap :: M&M slips on profit booking, banks on back-foot
9:19 AM
FIRST TRADE :: Nifty at all-time-high
9:18 AM
FIRST TRADE :: Sensex hits fresh record of 51,542 at open
9:11 AM
Commodity Heatmap
9:06 AM
Top gainers and losers on S&P BSE Sensex at Pre-open
9:04 AM
Markets at Pre-open
9:03 AM
Markets at Pre-open
8:58 AM
BROKERAGE VIEW :: MOFSL on Ashoka Buildcon
CMP: Rs 104 | TP: Rs 145 (+38%) | Reco: Buy
>> ASBL’s 3QFY21 revenue came in flat YoY, in line with our estimate. Revenue would have been higher as execution of three projects was delayed and shifted to 4QFY21. EBITDA stood 15% below our estimate as an adverse revenue mix led to 180bp YoY decline in EBITDA margin (120bp below our expectation). As a result of lower depreciation and interest cost, coupled with higher other income, adjusted PAT stood flat YoY at INR856m and was 19% above our estimate.
>> ASBL received a large EPC order worth INR5b in the solar segment. Execution will be completed in 3-4 years, with EBITDA margin expected to be in 10-11% range. Order book stood strong at INR91.5b, up 13% YoY, with an OBto-revenue ratio at 2.6x.
>> Strong execution over the past two years is commendable. However, the pending PE exit in the asset portfolio is an overhang on the stock. We have increased our FY21E EPS by 7% on higher other income. Strong order book and continuous improvement in the Balance Sheet augurs well for ASBL. Maintain Buy with a revised TP of INR145/share (v/s INR125/share earlier).
>> ASBL’s 3QFY21 revenue came in flat YoY, in line with our estimate. Revenue would have been higher as execution of three projects was delayed and shifted to 4QFY21. EBITDA stood 15% below our estimate as an adverse revenue mix led to 180bp YoY decline in EBITDA margin (120bp below our expectation). As a result of lower depreciation and interest cost, coupled with higher other income, adjusted PAT stood flat YoY at INR856m and was 19% above our estimate.
>> ASBL received a large EPC order worth INR5b in the solar segment. Execution will be completed in 3-4 years, with EBITDA margin expected to be in 10-11% range. Order book stood strong at INR91.5b, up 13% YoY, with an OBto-revenue ratio at 2.6x.
>> Strong execution over the past two years is commendable. However, the pending PE exit in the asset portfolio is an overhang on the stock. We have increased our FY21E EPS by 7% on higher other income. Strong order book and continuous improvement in the Balance Sheet augurs well for ASBL. Maintain Buy with a revised TP of INR145/share (v/s INR125/share earlier).
8:56 AM
BROKERAGE VIEW :: MOFSL on Aditya Birla Fashion
CMP: Rs 165 | TP: Rs 220 (+34% ) | Reco: Buy
>> Aditya Birla Fashion and Retail (ABFRL)’s 3QFY21 EBITDA (down 10% YoY) posted a massive 21% beat on better-than-expected revenue trends. This was coupled with lower inventory markdown and strong cost measures, reflected in healthy gross margin recovery.
>> We revise our FY22E EBITDA by 17% on stronger recovery (estimated to recover to FY20 levels), coupled with better gross margins. ABFRL’s strong deleveraging (FY21 net debt estimated at ~one-fourth of previous expectation) and high FCF should aid in renewing its aggressive growth as well as reduce the steep 2.5x valuation gap v/s peers. Maintain Buy
>> Aditya Birla Fashion and Retail (ABFRL)’s 3QFY21 EBITDA (down 10% YoY) posted a massive 21% beat on better-than-expected revenue trends. This was coupled with lower inventory markdown and strong cost measures, reflected in healthy gross margin recovery.
>> We revise our FY22E EBITDA by 17% on stronger recovery (estimated to recover to FY20 levels), coupled with better gross margins. ABFRL’s strong deleveraging (FY21 net debt estimated at ~one-fourth of previous expectation) and high FCF should aid in renewing its aggressive growth as well as reduce the steep 2.5x valuation gap v/s peers. Maintain Buy
8:54 AM
BROKERAGE VIEW :: MOFSL on Sun TV
CMP: Rs 552 | TP: Rs 640 (+16% ) | Reco: Buy
>> Subscription growth has slowed –it had remained steady in the last few quarters on the back of OTT subscriptions and digitization in Tamil Nadu. We expect subscription revenue to grow in the double digits in FY22E. Furthermore, viewership trends are yet to see a steady uptick.
>> It plans to launch new TV shows/movies and a Marathi channel in FY22, which offers a silver lining to ad and subscription growth.
>> SUNTV’s healthy liquidity, with INR36b net cash (1HFY21), offers room to intensify investments in the linear as well as OTT space. This, along with high dividend payout potential and low valuations, offers support.
>> We expect FY20–23E revenue/EBITDA/PAT of 5%/4%/5% on the back of an improving macro environment, coupled with the revamping of content aiding.
>> SUNTV trades at FY22E/FY23E P/E of 14x/14x. We roll forward our valuation to FY23E, valuing it at FY23E P/E of 16x, to arrive at Target Price of INR640. Maintain Buy.
>> Subscription growth has slowed –it had remained steady in the last few quarters on the back of OTT subscriptions and digitization in Tamil Nadu. We expect subscription revenue to grow in the double digits in FY22E. Furthermore, viewership trends are yet to see a steady uptick.
>> It plans to launch new TV shows/movies and a Marathi channel in FY22, which offers a silver lining to ad and subscription growth.
>> SUNTV’s healthy liquidity, with INR36b net cash (1HFY21), offers room to intensify investments in the linear as well as OTT space. This, along with high dividend payout potential and low valuations, offers support.
>> We expect FY20–23E revenue/EBITDA/PAT of 5%/4%/5% on the back of an improving macro environment, coupled with the revamping of content aiding.
>> SUNTV trades at FY22E/FY23E P/E of 14x/14x. We roll forward our valuation to FY23E, valuing it at FY23E P/E of 16x, to arrive at Target Price of INR640. Maintain Buy.
8:52 AM
Stocks to watch: Tata Steel, RIL, Voda Idea, BPCL, Wipro, Crompton Greaves
RIL, Future Retail: The Delhi High Court, on Monday, overturned an order that had stalled Future Group's $3.4 billion deal to sell its retail assets to Reliance in a setback for Future's partner Amazon.com Inc, which has challenged the sale.
Vodafone Idea: The Indian government has challenged in the Singapore High Court an international arbitration tribunal's verdict that overturned its demand for Rs 22,100 crore in back taxes from Vodafone Group Plc. READ MORE
8:50 AM
BROKERAGE VIEW :: MOFSL on NMDC
CMP: Rs 118 | TP: Rs 140 (+19%) | Reco: Buy
>> NMDC is a play on strong iron ore prices and volumes. We expect margin to rise in 4QFY21 as the spot price is ~17% higher than its 3QFY21 average. We expect margin to peak out in 4QFY21, but still stay robust.
>> We expect volume growth to be strong at 10% CAGR over FY21-23E, aided by the restart of Donimalai mines, which should start contributing soon. We have factored in 4mt (13% of total) volume from Donimalai mines in FY22E.
>> The government’s proposal to levy an additional premium on NMDC’s renewed mining leases has emerged as a key overhang on the stock. If a premium of 22.5% of revenue is levied on all mines of NMDC, it poses a downside risk of ~30% to our FY22E EBITDA.
>> We value the stock at INR140 on a SoTP basis, valuing the iron ore business at 4x FY22E EV/EBITDA, amid uncertainty over the levy an additional premium on Chhattisgarh (renewed in FY20) and Kumaraswamy mines (renewal due in Oct’22), and the steel plant (~25% of book value). At the CMP, the stock is trading at 3.4x its core iron ore mining business and provides an attractive dividend yield of ~8.5%. Reiterate Buy
>> NMDC is a play on strong iron ore prices and volumes. We expect margin to rise in 4QFY21 as the spot price is ~17% higher than its 3QFY21 average. We expect margin to peak out in 4QFY21, but still stay robust.
>> We expect volume growth to be strong at 10% CAGR over FY21-23E, aided by the restart of Donimalai mines, which should start contributing soon. We have factored in 4mt (13% of total) volume from Donimalai mines in FY22E.
>> The government’s proposal to levy an additional premium on NMDC’s renewed mining leases has emerged as a key overhang on the stock. If a premium of 22.5% of revenue is levied on all mines of NMDC, it poses a downside risk of ~30% to our FY22E EBITDA.
>> We value the stock at INR140 on a SoTP basis, valuing the iron ore business at 4x FY22E EV/EBITDA, amid uncertainty over the levy an additional premium on Chhattisgarh (renewed in FY20) and Kumaraswamy mines (renewal due in Oct’22), and the steel plant (~25% of book value). At the CMP, the stock is trading at 3.4x its core iron ore mining business and provides an attractive dividend yield of ~8.5%. Reiterate Buy
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First Published: Feb 09 2021 | 7:57 AM IST
