In today’s briefing:
- Nifty Floor Pressure with Exodus Risk
- Torrent Pharmaceuticals (TRP IN): Stellar Domestic Show Makes It A Compelling Buy
- Bajaj Auto – Domestic 2W Recovery on Track
- Upl – Strong Performance in Q4; Transformation in Action
- Max Financial – VNB Margin Surprises Positively; Growth to Take Centre Stage in FY23
- Birla Corporation: Beat On Volume, Cost Pressure to Sustain; New Capacity Ramp Up Crucial!
- Dalmia Bharat – Realization Drives EBITDA Beat; Outlook Cautious
Nifty Floor Pressure with Exodus Risk
- India stands out as a market at risk of breaking below congestive floor support (over owned, yield and FX pressure) like US big tech and more recently Europe.
- Nifty 15,000 lower wedge support to come under pressure post bounce attempt.
- USD/INR bull call to 77.80 and 78.64 on track. Watch rising resistance at 77.80/84 near term for a rally stall.
Torrent Pharmaceuticals (TRP IN): Stellar Domestic Show Makes It A Compelling Buy
- Torrent Pharmaceuticals (TRP IN) is one of the front-runners in the Indian pharmaceuticals industry mainly having presence in chronic therapeutic segments. India contributes 51% of its total revenue.
- Torrent is consistently outperforming Indian pharmaceutical market by a wide margin, due to its strong exposure to fast-growing and high-margin chronic therapeutic segments, which ensures high recurring revenue.
- Despite the fading windfall from COVID therapeutics, Torrent is well-positioned for double-digit revenue growth, due to its sustained competitive positioning in anchor therapeutic areas of CVS, CNS, GI, and vitamins.
Bajaj Auto – Domestic 2W Recovery on Track
- Exports: Management expects double-digit growth in retail sales, led by healthy demand in key markets and a continuous focus on network expansion.
- Domestic 2Ws: Management expects strong growth in volumes, with a focus on profitable categories.
- The share of first-time buyers stands at ~60% of demand, while the remaining portion is contributed by replacement/additional vehicle buyers.
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Upl – Strong Performance in Q4; Transformation in Action
- UPLL delivered a stellar Q4 performance, beating consensus topline/EBITDA/Adj.
- UPLL’s healthy double-digit Q4 top-line growth was supported by robust growth across geographies, with YoY growth of 62%/38%/25%/21% in India/North America/ROW/LatAM.
- Management has guided for revenue/EBITDA growth of 10%/12-15% YoY for FY23E, supported by strong commodity prices, a favorable environment for biosolutions and conventional crop protection amid high costs and reduced availability of fertilizers.
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Max Financial – VNB Margin Surprises Positively; Growth to Take Centre Stage in FY23
- Max Life delivers robust operational and financial performance: Max Life, the sole operating company of Max Financial, posted an overall good set of numbers in FY22, with VNB growing by 22% YoY to Rs15.3bn and VNB margin expanding by 2.2ppts YoY to 27.4%.
- Focus on growth in FY23: In CY22, the company has so far delivered weaker topline growth owing to a host of factors, including a stronger base (on 2Y/3Y/5Y CAGR, Max Life has the best APE growth), Omicron-led disruptions in distribution and a slowdown in retail protection.
- Current weakness in shares unwarranted: The performance of MAXF shares has traditionally been driven by a combination of fundamental performance of Max Life and noises around MAXF.
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Birla Corporation: Beat On Volume, Cost Pressure to Sustain; New Capacity Ramp Up Crucial!
- Birla Corporation (BCL) reported Volume/Revenue growth of 2%/6% YoY owing to better demand in its operating region.
- The company reported a volume of 4.24 mtpa which was higher by 5% than our expectation of 4.02 mtpa
- We roll over our estimate to FY24 and value the company at 7.5x FY24E EV/EBITDA to arrive at a target price of Rs 1,300/share, (1,500 earlier), implying an upside of 35% from the CMP.
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Dalmia Bharat – Realization Drives EBITDA Beat; Outlook Cautious
- Revenue increased 7% YoY to Rs33.8bn. Volumes rose 3% YoY/16% QoQ to 6.6mt.
- EBITDA declined 11% YoY/increased 66% QoQ to Rs6.8bn (Emkay est. – Rs5.6bn).
- Project updates: Dalmia expects to commission 4mt debottlenecking capacity by Mar’23.
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.
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