External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Godrej Consumers: GCPL’s consolidated revenue grew 7% YoY, with domestic/international clocking 8/6% YoY growth (9/8% three-year CAGR)</li><li>The Indian business continued to be led mainly by a high share of price hike (13% YoY), with domestic volume contracting by 5% YoY (three-year CAGR at 1% vs HUL’s 3%), impacted by HI</li><li>Personal care sustained 18% growth (price hike-led), while home care was up 2%, with a delayed monsoon-led weak season (expect a recovery in Q3)</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Godrej Consumers: GCPL’s consolidated revenue grew 7% YoY, with domestic/international clocking 8/6% YoY growth (9/8% three-year CAGR)The Indian business continued to be led mainly by a high share of price hike (13% YoY), with domestic volume contracting by 5% YoY (three-year CAGR at 1% vs HUL’s 3%), impacted by HIPersonal care sustained 18% growth (price hike-led), while home care was up 2%, with a delayed monsoon-led weak season (expect a recovery in Q3)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Godrej Consumers, Bharat Petroleum Corporation, Jubilant FoodWorks

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>KEC International (KEC Int) reported a mixed set of numbers in Q2FY23 with revenues at Rs 4,064Cr (up13% YoY, above expectations), EBIDTA of Rs 178 Cr (down 30% YoY, below expectations), and PAT of Rs 55 Cr (down 31% YoY, above expectations).</li><li>The company’s EBIDTA Margins declined to 4.4% in Q2FY23 from 5.1% in Q1FY23 and 7.1% in Q2FY22, primarily owing to elevated logistic costs, execution of legacy projects having adverse commodity prices, and costs of completion of EPC project in Brazil.</li><li>The company’s order intake stood at Rs 10,465 Cr led by orders from Civil and T&amp;D, followed by Railways, Cables, and Oil &amp; Gas segments.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

KEC International (KEC Int) reported a mixed set of numbers in Q2FY23 with revenues at Rs 4,064Cr (up13% YoY, above expectations), EBIDTA of Rs 178 Cr (down 30% YoY, below expectations), and PAT of Rs 55 Cr (down 31% YoY, above expectations).The company’s EBIDTA Margins declined to 4.4% in Q2FY23 from 5.1% in Q1FY23 and 7.1% in Q2FY22, primarily owing to elevated logistic costs, execution of legacy projects having adverse commodity prices, and costs of completion of EPC project in Brazil.The company’s order intake stood at Rs 10,465 Cr led by orders from Civil and T&amp;D, followed by Railways, Cables, and Oil &amp; Gas segments.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

KEC International - Margins Decline Continues But Order Book Robust

<ul><li>Q2FY23 flat for infrastructure; mixed competitive intensity, commodities stable: In Q2FY23, the NHAI awarded just six projects, of which, two were HAM projects worth INR 30.7bn and four were EPC projects worth INR 41.2bn</li><li>With this, the NHAI awarded c.613 kms in H1FY23, with eleven HAM projects worth INR 128.8bn and five EPC projects worth INR 48.9bn</li><li>H1FY23 witnessed mixed competitive intensity, with eight projects won at 8% below the NHAI cost and eight projects at 10% above the NHAI cost</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Q2FY23 flat for infrastructure; mixed competitive intensity, commodities stable: In Q2FY23, the NHAI awarded just six projects, of which, two were HAM projects worth INR 30.7bn and four were EPC projects worth INR 41.2bnWith this, the NHAI awarded c.613 kms in H1FY23, with eleven HAM projects worth INR 128.8bn and five EPC projects worth INR 48.9bnH1FY23 witnessed mixed competitive intensity, with eight projects won at 8% below the NHAI cost and eight projects at 10% above the NHAI costContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Industrials (Q2FY23 Results Preview): Headwinds receding

<ul><li>For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY during the quarter.</li><li>Higher costs of a commodity such as steel, cement, aggregates, and diesel are expected to contract companies’ EBITDA margin by 150-200bps YoY.</li><li>In the Road Construction space, Q1and Q2 is normally a soft quarter in terms of project bidding and awarding and awarding activity normally accelerates in Q3 and Q4. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY during the quarter.Higher costs of a commodity such as steel, cement, aggregates, and diesel are expected to contract companies’ EBITDA margin by 150-200bps YoY.In the Road Construction space, Q1and Q2 is normally a soft quarter in terms of project bidding and awarding and awarding activity normally accelerates in Q3 and Q4. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Infra-Road - Robust Order Book, Outlook Positive

<ul><li>We attended the KEC International (KEC) Annual Investor Conference for 2022 held on September 14 2022 in Mumbai</li><li>We noted the following key takeaways from the call: (1) KEC has guided for an OI of INR 200bn for FY23, of which FYTD23 order inflow (OI) stands at INR 60bn (~30% of FY23 guidance) (2) With the last EPC project expected to be commissioned in Q3FY23, the SAE projects are expected to achieve a positive margin (3) Without EPC projects, the company expects to maintain a margin of 8% on manufactured products in SAE from FY24 onwards (4) Management has guided that it would bring NWC days down to 125-130 by Q4FY23 and subsequently to 100 by Q4FY24.</li><li><div><div><div><p>Given rich valuation and a debt-heavy balance sheet, we maintain REDUCE rating on the stock, with a target price of INR 375/share (14x Mar-24E EPS). </p></div></div></div></li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We attended the KEC International (KEC) Annual Investor Conference for 2022 held on September 14 2022 in MumbaiWe noted the following key takeaways from the call: (1) KEC has guided for an OI of INR 200bn for FY23, of which FYTD23 order inflow (OI) stands at INR 60bn (~30% of FY23 guidance) (2) With the last EPC project expected to be commissioned in Q3FY23, the SAE projects are expected to achieve a positive margin (3) Without EPC projects, the company expects to maintain a margin of 8% on manufactured products in SAE from FY24 onwards (4) Management has guided that it would bring NWC days down to 125-130 by Q4FY23 and subsequently to 100 by Q4FY24.Given rich valuation and a debt-heavy balance sheet, we maintain REDUCE rating on the stock, with a target price of INR 375/share (14x Mar-24E EPS). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

KEC International (Update): High Leverage to Limit Further Rerating

India

KEC International Limited is a power transmission company which is involved in the design, manufacture, supply and construction of turnkey projects of power transmission lines. The company also installs fiber optical cable and provides services for Satellite/GPRS surveys.

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KEC International (KECI IN)

HSIE Results Daily: Godrej Consumers, Bharat Petroleum Corporation, Jubilant FoodWorks

Godrej Consumers: GCPL’s consolidated revenue grew 7% YoY, with domestic/international clocking 8/6% YoY growth (9/8% three-year CAGR)

HDFC Securities

KEC International - Margins Decline Continues But Order Book Robust

The company’s order intake stood at Rs 10,465 Cr led by orders from Civil and T&D, followed by Railways, Cables, and Oil & Gas segments.

Axis Direct

Industrials (Q2FY23 Results Preview): Headwinds receding

In Q2FY23, the NHAI awarded just six projects, of which, two were HAM projects worth INR 30.7bn and four were EPC projects worth INR 41.2bn

HDFC Securities

Infra-Road - Robust Order Book, Outlook Positive

For road construction companies under our coverage, we expect revenue growth of 10% YoY, EBITDA to be flattish, and APAT to de-grow by 2% YoY...

Axis Direct

KEC International (Update): High Leverage to Limit Further Rerating

Given rich valuation and a debt-heavy balance sheet, we maintain REDUCE rating on the stock, with a target price of INR 375/share (14x Mar-24E EPS)

HDFC Securities

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