India: Mindtree Ltd, ABM Investama, ITC Ltd, ICICI Prudential Life Insurance and more

• On Monday, Bloomberg reported that Larsen & Toubro (LT IN) was planning a merger between its public-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen & Toubro Infotech (LTI IN). 
• The companies have responded by saying that the news reports of a merger between MINDTREE and LTI are “speculative in nature“.
• Below is a closer look at the likelihood of this Deal and the valuations of the two companies involved in this event.

The Asia HY Trade Book for the month of April includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

• ITC Limited (ITC) has a diversified presence in FMCG, Hotels, Packaging, Paperboards, Agri Business, and Information Technology.
• The FMCG segment includes Cigarettes and Others which include branded packaged foods businesses, education and stationery products, personal care products, safety matches and agarbattis, and apparel.
• We recommend a BUY on the stock with a target price of Rs 295/share, implying an upside of 10% from the CMP.

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• Growth impacted by strong base and 3rd wave; VNB guidance retained ICICI Pru Life reported subdued APE growth of ~4% YoY on account of a strong base and impact of 3rd covid wave in Jan22.
• Company’s growth outlook is positive given the strong contribution from new product launches over the last two years and turnaround in the retail protection segment
• VNB growth in FY22 was mainly led by the non-linked savings segment, which contributed 91% to incremental profit…(continued).

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• We remain enthused with IPRU Life’s product and channel diversification strides, which has made the business considerably more robust than before.
• This is illustrated by the fact that the Rs21.6bn FY22 VNB mix is split between 16% by ULIPs, 43% by protection and 41% by non-linked savings.
• Current valuation at 2.2x/1.9x FY23E/FY24E P/EV is attractive. Maintain BUY.

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• Mindtree reported strong revenue growth of 5.4% QoQ and stood at Rs 2,897 Cr in Q4FY22, reporting revenue growth of 49.1% YoY.
• The company posted operating profits of Rs 608 Cr, registering a growth of 2.7% QoQ, demonstrating the company’s superior execution and better service mix
• We recommend a BUY on the stock and assign 35x P/E multiple to its FY24E earnings of Rs 135.8/share to arrive at a TP of Rs 4,830/share, implying an upside potential of 22% from CMP.

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