Daily BriefsIndia

India: Allcargo Logistics, Devyani International, Kpit Technologies, Granules India, Dixon Technologies India Ltd, Anup Engineering, VST Industries, Indusind Bank, Navin Fluorine International, Sanofi India and more

In today’s briefing:

  • Allcargo (AGLL IN): Process Reinitiated! 70%+ Up Now. Should You Still Chase?
  • Devyani Pre-IPO – Thoughts on Valuation
  • KPIT Tech: Hitting All the Right Notes
  • On track to build product pipeline as well as capacity
  • Dixon Technologies: Broadening Revenue Streams
  • Anup Engineering: Decent Show Amid Challenging Environment
  • VST Industries: Volumes Recover Partly; Focus on High Priced Brands
  • IndusInd Bank: Steady Performance, Business Outlook Improving
  • Navin Fluorine: Non Legacy Business to Lead Show
  • Sanofi India: Decent Performance with Strong Margins

Allcargo (AGLL IN): Process Reinitiated! 70%+ Up Now. Should You Still Chase?

By Janaghan Jeyakumar, CFA

India-based integrated logistics company Allcargo Logistics (AGLL IN) received a “Delisting Proposal” from its Promoter Group (Shashi Kiran Shetty and Talentos Entertainment Private Limited) in August 2020. Since then, the stock has gained more than 70%. 

Source: Smartkarma

I have covered this situation three times since the Deal was announced (as indicated by the “①” markers in the figure above) taking a Bullish stance on all three occasions as I believed the stock was fundamentally undervalued on a growth-adjusted basis. 

Last week, the company announced that the Delisting Process has been “reinitiated” causing the share price to rise sharply.

So what does this mean and how does this affect the timeline and the upside potential of the event?

Read below to find out.  


Devyani Pre-IPO – Thoughts on Valuation

By Sumeet Singh

Devyani International Limited (DIL), Yum Brand’s largest franchisor in India, aims to raise around US$200m via its Indian IPO. The IPO will be a mix of primary and secondary shares. 

DIL operates a chain of quick service restaurants (QSRs) in India. Its core business is to operate KFC, Pizza Hut and Costa Coffee in India. It operated 655 stores across 155 cities in India, as of Mar 2021. These include 264 KFC stores, 297 Pizza Hut stores and 44 Costa Coffee stores. It also operates stores in Nepal and Nigeria for KFC and Pizza Hut. In addition, it also runs its own brands Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar in India. Yum owns over 4% stake in the company.

In this note we will talk about valuations.


KPIT Tech: Hitting All the Right Notes

By Ankit Agrawal, CFA

KPIT reported strong Q1FY22 earnings. Overall, the earnings growth was led by margin expansion (EBITDA margin expanded to 17.3% vs 13.4% YoY) and high-teens QoQ revenue growth. The guidance also remains robust. While the stock has more than quadrupled since our initiation note KPIT Technologies: A Pure Play on Automotive Technology in Jun 2020, we believe the upside potential still remains significant.


On track to build product pipeline as well as capacity

By Motilal Oswal

Granules India (GRAN) delivered a better-than-expected 1QFY22 performance, led by better off-take in the Intermediates (PFI) and Finished Dosage (FD) segments. The impact of the sharp rise in key starting materials (KSM) for Paracetamol was offset by controlled opex, driving better-thanexpected profitability during the quarter. The improved availability of KSMs and new launches would further enhance the performance going forward. We marginally tweak our EPS estimate for FY22/FY23E, factoring in a) the easing of the supply situation for KSMs and b) higher logistic costs.

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Dixon Technologies: Broadening Revenue Streams

By ICICI Securities Limited

Dixon operates in both original equipment manufacturing (OEM) and original design manufacturing (ODM) Strong RoE, RoCE at ~20%, ~24%, respectively (three year’s average)…

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Anup Engineering: Decent Show Amid Challenging Environment

By ICICI Securities Limited

About the stock: Anup Engineering is one of the leading process equipment manufacturers with special focus on heat exchangers.

  • The company has a facility in Odhav, Gujarat and is currently in the process of making a greenfield expansion in Kheda
  • The company aims to achieve a topline target of | 1000 crore by 2025
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VST Industries: Volumes Recover Partly; Focus on High Priced Brands

By ICICI Securities Limited

About the stock VST Industries (VST) is among the oldest cigarette company in India, involved in manufacturing and marketing of cigarettes and also trading unmanufactured tobacco. Incorporated in 1930, it is an associate undertaking of…

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IndusInd Bank: Steady Performance, Business Outlook Improving

By ICICI Securities Limited

About the stock: IndusInd Bank is a Hinduja group promoted newer age private sector bank and is the fifth largest private bank in India.

  • Vehicle finance forms around 30% of overall loans
  • Strong pan-India presence with 5221 branches as on June 2021
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Navin Fluorine: Non Legacy Business to Lead Show

By ICICI Securities Limited

The company has two manufacturing facility in Surat and Dewas while it is setting up a new greenfield capacity at Dahej In terms of revenue contribution, speciality chemical constitutes 40% of overall revenue followed by CRAMS of 25% and rest from refrigerant (~18%) and inorganic fluoride (~17%) businesses Q1FY22 Results: Revenue was almost in line with our estimates while PAT came…

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Sanofi India: Decent Performance with Strong Margins

By ICICI Securities Limited

About the stock: Sanofi offers drugs in therapies like diabetes (insulins & orals), cardiology, thrombosis, anti-infective, CNS, allergy, vitamins, minerals & supplements.

  • Lantus, Allegra & Combiflam are in Top 100 pharmaceutical brands in India
  • Sanofi is one of the fastest growing companies in India in anti-diabetic therapy
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Before it’s here, it’s on Smartkarma