Latest Updates iCommunity

Latest Updates

ICICIdirect Research Posted on 08:58am 18-Jun-2020

The matter of adjusted gross revenue (AGR) will be heard by the Supreme Court on June 18 (today)...

* Market Outlook

Indian markets are likely to open with a negative bias on the back of weak global cues due to a spike in Coronavirus cases & continued India-China geopolitical tensions. Global news flows and domestic earnings outcomes will be key monitorables.

 

* Markets Yesterday

• Domestic markets ended slightly negative tracking IndoChina border tensions and rise in Covid-19 cases •

• US markets ended lower on the back of Fed comments about economic outlook uncertaint

 

* Key Developments  

• The Supreme Court has clarified that complete waiver of interest on moratorium is not under consideration. However, the apex court has indicated “no merit” on charging interest on unpaid interest for deferred payment during moratorium period. The centre and RBI have been asked to review the matter until next hearing scheduled in first week of August 2020

• The matter of adjusted gross revenue (AGR) will be heard by the Supreme Court on June 18 (today). The hearing is likely to decide on the government's application that telecom companies be allowed to spread the payment of their dues over 20 years or less. The hearing will be crucial for Vodafone Idea as an adverse judgment may mean immediate payouts forcing it to file for bankruptcy while a favourable judgment coupled with some capitalisation would imply its survival

• Brigade Enterprises (BEL) had launched several big ticket projects in the affordable and mid premium category in 9MFY20. Hence, we expect its sales volume to be less impacted in Q4FY20E. We expect BEL's sales volumes to grow 1.3% YoY to 9.7 lakh s q ft in Q4FY20E despite the challenging environment. On the financial front, we expect the topline to de-grow 16.2% YoY to | 636.5 crore in Q4FY20E. Overall, we expect BEL's net income to decline 75.4% YoY to | 14.7 crore. Key Monitorable: Covid impact: Pre-leasing and construction progress on Brigade Tech Garden and WTC, Chennai

• For Q4FY20E, we expect Thermax' revenues to decline 31.2% to | 1300.1 crore as | 250-300 crore dispatches are already delayed and more are expected amid lockdowns while muted order backlog remains a key concern. We expect EBITDA to decline 47.5% to |92.3 crore with EBITDA margins expected to decline to 7.1% YoY. Adjusted PAT is expected to decline 37.7% to | 78.3 crore with PAT margin of 6.0% with some respite from corporate tax cut benefit. For Q4FY20E, order inflows are expected to remain weak as supply chain and operational disruption due to Covid-19 outbreak across major economies of the world along with India are expected to lead to drying up of private capex as customer inquiries have significantly fallen

• JK Cement’s revenues for Q4FY20 largely remained flat, declining 1% YoY to | 1,477 crore (vs. I-direct estimate of | 1,433 crore). Volumes dropped 7% YoY to 2.66 MT while realisations saw a strong growth of 6.9% YoY led by healthy pricing in its key markets of North. EBITDA margins for the quarter improved by 470bps YoY to 23.4% (vs. I-direct estimate of 21.3%). EBITDA/t came in 33.7% higher at almost | 1,300/t (vs. I-direct estimate of | 1,148/t). Absolute EBITDA saw a 24% YoY growth to | 346.3 crore (vs. I-direct estimate of | 305.5 crore), while PAT plunged almost 100% to | 0.2 crore owing to a | 178 crore impairment provision made for its investments in UAE

• Mangalam Cement reported operationally good set of numbers with EBITDA margins expanding by 931bps YoY to 15.5% during the quarter despite fall in the revenues. Revenues for the quarter declined by 6.7% YoY to |296.8 crore (down 4% QoQ). We believe the drop in the revenues is mainly led by lower sales volume due to imposition of lockdown from March onwards. However, in the northern regions which is key operating area of company saw healthy growth in the realisations on YoY basis. With healthy growth in EBITDA (up 134% YoY, 13% QoQ) to |46 crore, the company reported PAT of |15.5 crore as against |1.7 crore last year

• Fortis Healthcare's Q4FY20 revenues were down 6% YoY at | 1113 crore due to a significant drop in occupancy levels in later half of March due to Covid-19. EBITDA margins were up 159 bps to 11.3% mainly due to lower other expenses partially offset by higher employee cost. EBITDA grew 9.4% YoY to | 126 crore. Net loss came in at | 41.2 crore vs profit of | 151.2 crore in Q4FY19. On a full year basis, Revenues grew 3.6% to | 4632 crore with EBITDA margins coming in at 13.2%

• Airtel has acquired a strategic stake (10%) in Edtech startup Lattu Media Pvt Ltd (“Lattu Kids”) as part of the Airtel Startup Accelerator Program. The investment will enable Airtel to add Edtech to its premium digital content portfolio and give distribution scale to quality learning material from Lattu Kids. Valuations details were not shared by the company

• Tata Consultancy Services (TCS) and US based Freshworks Inc. (a customer engagement software firm) has announced a partnership to jointly build and market new age marketing, sales support, customer success and IT service management on top of its cloud software offerings

• Ashok Leyland's board of directors would meet later this week to discuss fund raising of | 200 crore via NCDs

• The government of Uttar Pradesh would be providing 100% road tax exemption to the first 1 lakh electric 2-Ws manufactured in the state and 75% road tax exemption to electric PVs

• NTPC's Unit-1 of 150 MW of Kameng Hydro-Electric Project (4x150 MW) of Neepco has started commercial operation with effect from 17/6/2020. With this, commercial capacity of NTPC group has become 61,936 MW

• Wonderla Holidays Limited has forayed into food takeaway and delivery venture with their first "Wonder Kitchen" outlet at Kengeri, near to satellite town Bangalore. Wonder Kitchen is a multi-cuisine outlet serving vegetarian and non–vegetarian dishes. The Start-up has associated with Swiggy and Zomato for online orders and home delivery. The outlet will operate from 11 am to 9 pm and will do the delivery within the 5 km radius.

• Majesco announced that Foresight Risk and Insurance Services selected Majesco Policy and Billing for P&C, Majesco Digital1st Insurance, and Majesco CloudInsurer, providing a next generation platform to accelerate their digital transformation and growth. This bodes well for company's future revenue growth

• As per media reports, DOT has decided to rule out the use of Chinese equipment in the upgradation of the 4G equipment of BSNL & MTNL. It states that the government is also considering asking private operators to reduce their dependence on equipment made by Chinese firms. Telecom companies like Bharti Airtel and Vodafone Idea have been working with Huawei in their current networks, while ZTE works with state-run BSNL/MTNL

• As per media reports, in its endeavour for faster settlement of claims through conciliation and reduce liabilities thereby, National Highways Authority of India (NHAI) has rigorously started the process of conciliation by constituting three Conciliation Committees of Independent Experts (CCIE) of three members each. This will be positive for EPC players who will get some respite in working capital/liquidity amid the challenging scenario

• As per media sources, Elgi Equipments' subsidiary Elgi compressor Europe commissioned the company's upgraded compressed air system -110 Kw variable Speed EG Premium Series unit - at the Rubber Resources manufacturing site in the Netherlands. This compressor system is said to be far more energy efficient and could have up to 34% reduction in energy costs

• According to media sources, RK Damani (20% stake) is planning to take management control of India Cements. However, the current promoter (28% stake) has denied any such development and does not intend to cede his control

• As per media sources, restaurants are now pressuring online food delivery players like Zomato and Swiggy to change commission structure, reduce discounts and levy new fees for deliveries. The aim is to be able to stave off closure of restaurants

• As per media sources, Yes Bank is mulling raising | 8000 crore via rights issue in a bid to shore up its capital adequacy. As on March 31, 2020, Yes Bank's CET-1 ratio was at 6.3%

• As per media sources, as on June 12, 2020, PSBs have sanctioned | 32050 crore to MSMEs under the Emergency Credit Line Guarantee Scheme out of which | 16031 crore loans have been disbursed so far

 

* Today's Highlights

Results: Thermax, Brigade Enterprise, Emmbi Industries, Hikal, GSFC, Caplin Point Labs, MOIL, City Union Bank, Oriental Carbon, IRB Infra, Lumax Industries, Suven Pharma