ABB India – Reduce
Recommendation by HDFC Securities
Most of the potential upsides on cyclical recovery is already priced into the lofty valuation. Hence, we maintain REDUCE on ABB and roll forward our valuation to Mar-23E. We revise our TP to Rs 1,426/sh vs. Rs 1,268/sh earlier. We have retained our estimates.
Britannia Industries – Reduce
Britannia reported a mixed result as the company clocked a miss on revenue but a marginal beat in margins. Rising debt, inter group transactions and modest FY22 earnings growth will keep valuations in check. We value Britannia at 40x P/E on Mar-23 EPS to derive a TP of Rs 3,589. Maintain Reduce
Indostar Capital Finance – Reduce
Despite a reasonable asset quality performance with pro forma GNPAs at 2.8 per cent (vs. 2.9 per cent in 2Q), we are cautious in our outlook given the sizeable pool of GS-II (20 per cent of loans), underpinning our Reduce rating (revised target price of Rs 309).
Page Industries – Neutral
Recommendation by Motilal Oswal Institutional Equities.
Rich valuations of 69.9x FY22E and 61.1x FY23E EPS lead us to maintain our Neutral rating on the stock – despite incipient growth revival and ROEs likely to rebound to FY19 levels of over 50 per cent of going forward.
BHEL – Sell
Recommendation by Motilal Oswal Institutional Equities.
We increase our estimated losses for FY21E and cut our FY22E/FY23E EPS estimates by 9 per cent/15 per cent. While orders are few and far between, the pricing environment remains highly competitive, limiting scope for margin expansion. On its ongoing diversification strategy, the company is favorably placed as an L-1 bidder in a sulphur recovery unit (SRU) for IOCL Panipat and is restructuring its solar business division. Any material financial impact is still a long time away. We maintain our Sell rating, with a TP of Rs 26/share (14x FY23E EPS).
Berger Paints – Sell
Recommendation by Emkay Global Financial Services
We raise FY22-23 estimates by 14-15 per cent. However, despite the speedy recovery and a positive growth outlook, valuations at 64x FY23E EPS (vs 51x FY23E EPS for APNT) seem expensive. Maintain Sell with a revised TP of Rs 560 (Rs 480 earlier).
Sun TV Network – Hold
Recommendation by Emkay Global Financial Services
It was a weaker-than-anticipated quarter with miss on all fronts. Ad revenues were down 10 per cent yoy – steeper than our estimate of (-) 6 per cent and got impacted by slower recovery in retail/local ad spends, lower number of movie telecasts and weak market share in TN.
We maintain estimates and await the execution of strategies to improve viewership share, which in turn will aid ad revenue growth. The 3.6 per cent dividend yield on FY23E and a healthy net cash b/s provide comfort. Hold with a revised TP of Rs541 (13x FY23E EPS).
Godrej Consumer Products – Hold
Recommendation by Emkay Global Financial Services
Q3 performance was marginally below estimates, with sales growing 10 per cent to Rs 30.5bn and EBITDA/APAT growth of 13 per cent/17 per cent. India business margins were low due to high input prices; stronger Africa/Latam margins supported overall gains.
The stock looks reasonably valued at 35x FY23E EPS. Maintain Hold with a revised TP of Rs750, rolling forward to Mar’23E EPS.
Punjab National Bank – Sell
Recommendation by Emkay Global Financial Services
We retain our Sell rating and UW in EAP, with a TP of Rs29 due to its sub-par growth trajectory, traditionally weak asset quality/internal controls and subdued return ratios vs peers in the PSB space.
IPCA Laboratories – Hold
Recommendation by Emkay Global Financial Services
We maintain our Hold rating on Ipca with a TP of Rs 2,150 (unchanged) post a steady Q3. We also retain our FY21/22/23 estimates, which are slightly higher than management guidance.
Apar Industries – Buy
Recommendation by Yes Securities
The expected increase in the share of Value added products to also help realizations. We roll forward our estimates to FY23 and maintain our BUY rating for target of Rs 449.
Heidelberg Cement – Reduce
Recommendation by Centrum Broking
We feel limited capacity headroom will restrict HEIM’s growth FY22 onwards. Additionally, Central India markets will see an entry of sizeable companies in the next two years that may restrict realisation growth. Effectively HEIM will underperform its peers. We maintain our FY21e but upgrade FY22e earnings estimates to Rs 13.9/sh (Lower interest cost). We arrive at a fair value of Rs 208/sh (earlier Rs 190) assigning 7.0x EV/EBITDA FY23e earnings. At our TP, HEIM trades at a replacement cost of Rs 6.8bn/mn tonnes FY23e capacities. We downgrade HEIM to Reduce (earlier ADD rating).
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