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ICICIdirect Research Posted on 08:58am 03-Jun-2021

Bharti Airtel informed the stock exchanges that it has divested tower portfolio belonging to Airtel Tanzania...

* Market Outlook

Indian markets are likely to open gap up and remain at record highs tracking mixed global cues on continued optimism around reducing Covid related restrictions in a phased manner in a few Indian states.

* Markets Yesterday

• Domestic markets ended mixed tracking gains mainly in metal and index heavyweights and losses in FMCG and IT stocks

• US markets ended slightly higher amid optimism about economic reopening offset by inflation concerns ahead of release of macroeconomic data


* Key Developments  

• Motherson Sumi Systems (MSSL) reported a healthy operational performance in Q4FY21. Key highlight for the quarter was sustained profitability at its overseas operations SMR & SMP. Consolidated revenues (including DWH) for the quarter were at | 18,482 crore, up 22% YoY. Consolidated EBITDA for Q4FY21 was at | 1959 crore with associated EBITDA margins at 10.6%, down 20 bps QoQ. Consolidated PAT for the quarter was at | 714 crore vs. | 183 crore in Q4FY20 and | 799 crore in Q3FY21

• PVR reported a weak performance (albeit marked improvement QoQ) led by the resilient performance of regional content. Reported revenue declined 71.9% YoY due to 73.9% YoY, 67.7% YoY decline in box office revenues and F&B revenues, respectively. EBITDA loss (ex-Ind-AS) was at | 127.5 crore. During FY21, PVR raised | 1600 crore through equity and debt, which will support near term opex

• NRB's Q4 performance was a beat on our estimates on all parameters. Revenue for the quarter came in at | 257.2 crore, up 37.2% YoY & 5.1% QoQ. NRB’s Q4 EBIDTA margins came in at 18.2% vs. 8.2% YoY & 17.6% QoQ. Absolute EBIDTA came in at | 46.8 crore, up 203% YoY & 8% QoQ. Ensuing PAT came in at | 34.6 crore vs. | 4.2 in Q4FY20. Tax rate for the quarter was at 11.9%

• Muthoot Finance reported a good set of Q4FY21 numbers with healthy business growth and improved asset quality. AUM for the quarter was up 26.5% YoY and 4.5% QoQ to | 52622 crore, which was driven by gold AUM, up 27% YoY and 4.6% QoQ. Gold kept as security was up 3% QoQ to 171 tonnes. Asset quality improved as GNPA ratio was down to 0.88% vs. 1.3% QoQ. NII was up 18% YoY and 3.7% QoQ to | 1837 crore aided by healthy AUM growth. NIM was down 27 bps QoQ to 14.2% partly due to reversals. Net profit for the quarter was up 22% YoY to | 995 crore

• MTAR reported a decent set of Q4 numbers. Revenue grew 12% YoY to | 69.16 crore whereas EBIDTA grew 107% YoY to | 30 crore. EBIDTA margins expanded ~ 2000 bps YoY from 23.6% to | 43.5%. Consequently, PAT came in at | 18 crore with a tax rate of 28% for the quarter

• Public sector banks have shortlisted 28 loan accounts to be transferred to NARCL. Of these, lead banks have completed the process of obtaining approval from co-lenders in 22 accounts with | 82500 crore worth loans due as per Times of India

• According to The Economic Times, State Bank of India-led consortium can now move to sell certain real estate properties and securities worth | 5646 crore that belonged to Vijay Mallya to recover unpaid loans, after PMLA court lifted the claim of the Enforcement Directorate on the assets it had seized

• In March 2018, Wipro acquired 33.33% stake in Denim Group, and Denim Group Management, LLC (Denim Group), a leading independent application security firm, for a consideration of US$8.83 million (~| 64 crore).As part of recently announced acquisition of Denim Group by Coalfire, Wipro has sold its entire stake in Denim Group for a consideration of US$22.42 million (~| 163 crore)

• The real estate industry again sought a reduction in stamp duty, blaming the second Covid wave for subdued sales. Enquiries and sales in the last few months have seen a steep downward trend. In letters to Maharashtra’s ministers, CREDAI-MCHI sought reversal of stamp duty to 2% till March 2022. The State Government introduced again 5% stamp responsibility for property registrations on April 1, 2021

• Bharti Airtel informed the stock exchanges that it has divested tower portfolio belonging to Airtel Tanzania to a JV owned by independent tower company SBA communications. The transaction value was US$175 million for portfolio of 1400 towers

• Sun Pharma has entered into a license agreement with Ferring Pharmaceuticals, for co-marketing of CARITEC (Carbetocin RTS) in India. CARITEC is a room temperature stable formulation of obstetric drug, indicated for prevention of post-partum haemorrhage (PPH)

• Wipro Ltd and Finastra, software vendor that serves the financial services industry, announced a partnership to help corporate banks across Asia-Pacific accelerate their digital transformation. The companies will create a unique offering that combines Wipro’s comprehensive services catalogue with Finastra’s front-to-back trade finance and cash-management solutions

• The Andhra Pradesh government will launch construction of ~15.6 lakh houses for the poor under YSR Jagananna Housing Scheme. The state government will spend ~ | 28,000 crore for the housing scheme which is considered to be the biggest to be launched in one-go. The state government is planning to construct another 12.70 lakh houses in the second phase of the with a cost of | 22,860 crore after completing the first phase programme by 2022

• Wipro has taken a minority stake in Squadcast, Inc. for US$1.2 million (~| 9 crore). Squadcast offers an incident response platform that help Software engineers do on-call scheduling and incident management

• Persistent Systems has announced plans to expand its relationship with IBM to help fuel open hybrid cloud adoption, core IT modernisation and digital transformation for customers across the enterprise

• US has introduced a bill to remove 7% country cap on employment based green cards

• MRPL will consider and approve the amalgamation of ONGC Mangalore Petrochemicals (OMPL) with the company in its board meeting on June 10

• According to The Economic Times, mobile hand set maker Lava International is planning to raise up to | 1500 crore via public issue. The company has received PLI license in FY20 for the manufacturing of mobile phones in India. It has reported revenue growth of 3% YoY in FY20 to | 5269 crore while PAT was up 47% to | 107 crore

• Top banks and asset managers have sought RBI’s approval to allow the sale of fraud accounts to asset reconstruction companies (ARCs), something the banking regulator currently prohibits. These stakeholders also want ARCs to be granted indemnity from any prosecution arising out of a fraudulent account as per The Economic Times


* Today's Highlights

Results: GSPL, Quess Corp, Arvind Fashions, Nucleus

Events: EU services PMI, US service PMI, US initial jobless claims, US crude oil inventories