External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>Hindustan Unilever: HUL’s headline numbers are broadly in line. However, weak internals (miss in volume) and cautious outlook on demand and margin are raising questions about the near-term performance. Revenue grew at 11% YoY (HSIE 10%) while UVG, at 4%, was below our estimates (6% HSIE). UVG on two-year CAGR was weak at 2.5% but improved sequentially (-0.4% in Q1FY22) after the second wave of COVID impacted Q1FY22. Health, hygiene, and nutrition portfolio (85% mix) sustained healthy growth at 7% YoY. Within the nutrition portfolio, health food drinks volume grew in double digits. Nutrition portfolio should sustain the momentum as 85% of GTM integration is completed. Gross margin pressure continued in Q2FY22 with 142bps YoY contraction due to elevated commodity costs (crude, CPO, tea, and plastic) and higher freight cost. EBITDA growth was at 9% (HSIE 7%). We expect margin to remain under pressure in the near term, owing to sustained inflation and calibrated price hikes. We cut our EPS estimates for FY22/FY23/FY24 by ~2%. We value HUL at 55x P/E on Sep-23E EPS to derive a TP of INR 2,482. Maintain REDUCE.</p>
<div class="content-highlight"><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></div>

Hindustan Unilever: HUL’s headline numbers are broadly in line. However, weak internals (miss in volume) and cautious outlook on demand and margin are raising questions about the near-term performance. Revenue grew at 11% YoY (HSIE 10%) while UVG, at 4%, was below our estimates (6% HSIE). UVG on two-year CAGR was weak at 2.5% but improved sequentially (-0.4% in Q1FY22) after the second wave of COVID impacted Q1FY22. Health, hygiene, and nutrition portfolio (85% mix) sustained healthy growth at 7% YoY. Within the nutrition portfolio, health food drinks volume grew in double digits. Nutrition portfolio should sustain the momentum as 85% of GTM integration is completed. Gross margin pressure continued in Q2FY22 with 142bps YoY contraction due to elevated commodity costs (crude, CPO, tea, and plastic) and higher freight cost. EBITDA growth was at 9% (HSIE 7%). We expect margin to remain under pressure in the near term, owing to sustained inflation and calibrated price hikes. We cut our EPS estimates for FY22/FY23/FY24 by ~2%. We value HUL at 55x P/E on Sep-23E EPS to derive a TP of INR 2,482. Maintain REDUCE.
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: Hindustan Unilever, Nestle India, L&T Technology Services, ACC

External broker reports(aggregated public sources), Axis Direct

Axis Direct

L&T Technology Services / Equity Bottom-Up

<p>We recommend a HOLD and assign a 35x P/E multiple to its FY23E earnings of Rs 124/share, which gives a TP of Rs 4,290/share indicating potential upside of 6%.</p>
<div class="content-highlight"><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></div>

We recommend a HOLD and assign a 35x P/E multiple to its FY23E earnings of Rs 124/share, which gives a TP of Rs 4,290/share indicating potential upside of 6%.
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.

L&T Technology: Strong Outlook; Expensive Valuations

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>LTTS reported a 4.3% QoQ CC growth in 1QFY22, above our estimate of 2.8%. Industrial Products/Transportation (+7.8%/+4.3% QoQ) spearheaded this growth. EBIT margin improved by 70bp QoQ, despite a wage hike during...</p><div class="content-highlight"><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></div>

LTTS reported a 4.3% QoQ CC growth in 1QFY22, above our estimate of 2.8%. Industrial Products/Transportation (+7.8%/+4.3% QoQ) spearheaded this growth. EBIT margin improved by 70bp QoQ, despite a wage hike during...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.

Remain positive on improving demand outlook

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<p>Late Monday evening, <a href="https://www.smartkarma.com/entities/2499" target="_blank" data-smartkarma-citation="entities:2499:1">Larsen &amp; Toubro (LT IN)</a> launched India’s first ever hostile takeover in the tech sector. L&amp;T is seeking to acquire a 20.3-66.3% stake in <a href="https://www.smartkarma.com/entities/7297" target="_blank" data-smartkarma-citation="entities:7297:1">Mindtree Ltd (MTCL IN)</a> through a three-step transaction. Mindtree's founders/promoters together have a 13.3% stake and staunchly oppose the takeover. L&amp;T’s open offer presents an opportunity for longstanding large shareholders to partially or fully exit their stakes at a reasonable price. </p><div class="content-highlight"><p>L&amp;T’s open offer is less enticing for minority shareholders due to the small premium. Minority shareholders hope that a bidding battle will drive up bid premiums. However, we believe that minority shareholders should stick with their holdings as Mindtree’s fundamentals remain solid, but a chance of a material bump to L&amp;T’s open offer is low.</p></div>

Late Monday evening, Larsen &amp; Toubro (LT IN) launched India’s first ever hostile takeover in the tech sector. L&amp;T is seeking to acquire a 20.3-66.3% stake in Mindtree Ltd (MTCL IN) through a three-step transaction. Mindtree's founders/promoters together have a 13.3% stake and staunchly oppose the takeover. L&amp;T’s open offer presents an opportunity for longstanding large shareholders to partially or fully exit their stakes at a reasonable price. L&amp;T’s open offer is less enticing for minority shareholders due to the small premium. Minority shareholders hope that a bidding battle will drive up bid premiums. However, we believe that minority shareholders should stick with their holdings as Mindtree’s fundamentals remain solid, but a chance of a material bump to L&amp;T’s open offer is low.

Mindtree (MTCL IN): L&T’s Hostile Takeover Offer Is an Awkward Opening Gambit

India

L&T Technology Services (LTTS) is an Indian multinational technology company specializing in Engineering Research and Development (ER&D) services. It offers consultancy, design, development, and testing services across various industries including automotive, medical devices, telecom, and industrial products. LTTS is headquartered in Vadodara, India, and was founded in 2012.

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L&T Technology Services (LTTS IN)

HSIE Results Daily: Hindustan Unilever, Nestle India, L&T Technology Services, ACC

HUL’s headline numbers are broadly in line. However, weak internals (miss in volume) and cautious outlook on demand and margin are raising questions

HDFC Securities

L&T Technology: Strong Outlook; Expensive Valuations

We recommend a HOLD and assign a 35x P/E multiple to its FY23E earnings of Rs 124/share, which gives a TP of Rs 4,290/share indicating potential...

Axis Direct

Remain positive on improving demand outlook

LTTS reported a 4.3% QoQ CC growth in 1QFY22, above our estimate of 2.8%. Industrial Products/Transportation (+7.8%/+4.3% QoQ) spearheaded this...

Motilal Oswal

Mindtree (MTCL IN): L&T’s Hostile Takeover Offer Is an Awkward Opening Gambit

Late Monday evening, Larsen & Toubro (LT IN) launched India’s first ever hostile takeover in the tech sector. L&T is seeking to acquire a...

Arun George

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