ICICIdirect Research Fundamental view on ITC: Our research analysts have a BUY rating on the stock with a target price of Rs. 250 from a 12 months perspective.
The 75% of FMCG business products (ex-stationary) consists of staples, packaged foods, hygiene products that witnessed impressive growth of 34%. On the other hand, 25% of products (discretionary categories) like snacks (Bingo), deodorants & juices saw de-growth of 25%. Education & stationary revenue was worst hit with a decline of 65% as education institutions remained closed. FMCG business margins (EBITDA) saw 170 bps improvement to 7.6%. We believe the company’s strong packaged foods portfolio would continue to benefit from increased ‘in-home’ consumption in the medium term. Further, we believe growth in hygiene category would be structural with increase in per capita spends. The expansion of Savlon brand in home & personal hygiene products coupled with its proposition as antiseptic is likely to lead in market share gains. Juices & deodorants are unlikely to impact growth in the next two quarters given peak summer season sales have already been lost. However, education & stationary would continue to suffer until educational institutes reopen. With strong growth in large part of the portfolio, we expect the FMCG business to grow at 13.5% CAGR (FY20-22) with double digit margins by FY22E.
ICICIdirect Research Technical view on ITC: Our research analysts would suggest WAIT for fresh entry in the stock with support placed at 157 levels and immediate resistance placed at 200 levels. If the stock closes above 200 levels, then further upside can be seen towards 250 levels from a medium-term perspective.
Community User I love this stock and hence my view will be biased. There has been a lot of criticism of this company, the last few months. There was one blogger who wrote a paper on ITC and it went viral. The points he raised was valid and even experts from business channel started talking about it. I sent this to the company and to my surprise, I got a reply from the company secretary clarifying few points. ITC has cigaratte as their main contributor. Nowadays everyone acts like [protected] and hence smoking is considered a sin and government use this as a scape goat to keep increasing cess and taxes. The second issue is nowadays there is a concept of ESG going on Environment friendly, social responsibility and governance. This fad is taking over and unfortunately ITC gets hit even in this. I fully agree that there has been value destruction for shareholders in the last few years but this is a MNC and well managed. They are trying to diversify into consumables and hotels. Nearly 50% of the revenue is through this.
Hence in my view, this a beaten down stock at the current value and great time for new investors and for existing shareholders to average. Their dividends payment is also handsome. The only thing you need if you invest in this company is have patience. If you do not have patience, do not invest in this company. One day I fully believe this company will be like HUL. Cash cow company and strong balance sheet and well managed.
All these criticism would have woken up the management and I am sure they are now aware that they cannot sleep talk in meetings. I repeat i love this stock and wont sell it - but you guys do research and then buy.
ICICIdirect Research @SANDHYA NAGESH KINI - Fundamental view on Larsen & Toubro: Our research analysts have a HOLD rating on the stock with a target price of Rs. 1045 from a 12 to 15 months perspective.
For Q2FY21, the cash flow from operations (CFO) came in robust at | 2770 crore for Q2FY21 (Vs. | 1410 crore in Q2FY20). The company also declared special dividend of | 18 per share. Working capital to sale ratio stood at 26.7% for H1FY21 (Vs. 26.8% in Q1FY21) on account of lower revenue booking and company’s intent to support vendors amid challenging business environment.
L&T received net of tax cash proceeds of ~11000 crore from transfer of its Electrical & Automation (E&A) business which is likely to be utilised towards
a) | 2500 crore for dividends,
b) ~| 5000 crore towards retirement of debt taken as liquidity buffer during pandemic,
c) | 2000 crore towards investment in services business (incl. financial services),
d) | 2000 crore allocated towards Hyderabad metro restructuring.
L&T reported reasonable order inflows while execution is seeing green shoots of a revival despite productivity challenges that could improve over next few months. Also, preservation of working capital and cash proceeds from E&A has provided much needed comfort on the balance sheet front.
Community User I think Airtel yes. On Vodafone indication is that Govt will not honour the arbitration outcome. But better to wait and watch.
ICICIdirect Research Our fundamental research analysts expect both subscriber and ARPUs to remain firm in an otherwise seasonally weak quarter given a) return of migrants to cities, b) continued higher data usage and thereby pack upgrades and c) improved availability of recharges both digitally/physically as cities/towns have largely restarted post lockdowns. For Bharti Airtel (Airtel), we bake in subscriber addition of ~3 million (mn), while for Vodafone Idea (VIL), we expect sub loss of ~3 mn (much lower than average churn of ~10 mn seen in the last four quarters). For Airtel, reported ARPU is likely to see ~2% QoQ growth at | 160. Indian wireless revenues are expected to see 2.6% QoQ growth at | 13,213 crore. For Vodafone Idea, with ARPU growth of ~3% QoQ at | 117, we expect overall revenues to grow 0.9% QoQ at | 10,753 crore.
Company-Specific view - Vodafone Idea: We expect churn for V Vodafone Idea to continue, albeit reverse migration of laborers to cities to arrest the same. We consequently bake in ~3 million customer exits on a QoQ basis, much low er than the average churn of ~10 mn seen in the last four quarters. We build in A RPU growth of ~3% Q oQ a t |117, aided by higher data-based usage upgrades. We expect overall revenues to grow 0.9% Q oQ a t |10,753 crore. Reported margins are expected at 36.4% , down 200 bps QoQ as Q 1 had one-off benefits of |300 crore in licence fee and network & IT cost. The company is expected to post a net loss o f |5892 crore. Ke y monitorable: Fund raising plans and ARPU trajectory ahead.