Morning Update – 8th November 2024

SSL Research Morning Update 8th November 2024

Equity Market Update

US elections and Fed out of the way, markets now awaiting the Chinese stimulus

Indian benchmark indices snapped their 2-day rally with both the Nifty 50 and Sensex ending more than 1% lower
yesterday. Broader markets too were under pressure with unfavorable advance decline ratio of 3:5. FIIs continued
their selling spree (29th consecutive session) with a net sell figure of Rs 4,889 cr while DIIs net bought Rs 1,787 cr.

The US FOMC cut the benchmark interest rate by 25 bps, in line with consensus estimates. However, the
commentary was muddled with respect to inflation and the unemployment rate. US indices ended mixed with the
Nasdaq (+1.5%) outperforming the Dow Jones which ended flat. The US 10 yr yield cooled off to 4.33% while the
Dollar index declined 0.7%. Asian indices are mostly trading higher, awaiting the fiscal stimulus measures from
China where the National People Congress is currently underway. Expect a flat start for our market today.

2QFY25 - Key Results Today

Aarti Industries, Action Construction, Alembic, Ashok Leyland (Standalone), Bajaj Hindusthan Sugar, Mrs. Bectors,
Cholamandalam Financial, Dreamfolks Services, Equitas SFB (Standalone), ESAB India, Ethos, Fine Organic
Industries, Fortis Healthcare, GE Vernova T&D, India Cements, Inox India, Jupiter Life Line Hospitals, Jupiter
Wagons, Latent View Analytics, LIC (Standalone), CE Info Systems, Mayur Uniquoters, Metropolis Healthcare, MRF,
Motherson Sumi, Info Edge, Orient Cement, Piccadily Agro, Premier Energies, Puravankara, Relaxo Footwears, R
Systems International (Q3), Safari Industries, Samhi Hotels, Satin Creditcare (Standalone), State Bank of India
(Standalone), Shipping Corp, Signatureglobal (India), SMS Pharma, Star Cement, Tata Motors, Welspun Corp, and
ZF Commercial.

2QFY25 – Key Result Updates

1. Emami Ltd (CMP: Rs 671 | Mkt Cap: Rs 29,260 cr)

2QFY25 Financial Overview

• Consolidated revenue at Rs 891 cr; up 3.0% YoY
• Consolidated EBITDA at Rs 250 cr; up 7.2% YoY
• Consolidated PAT at Rs 211 cr; up 17.2% YoY
• In-line with expectations
• Trades at FY25E/FY26E Bloomberg consensus PE of 33.6x/29.8x respectively
• Board declared interim dividend of Rs 4 per share for FY25

EBITDA Margin
• 2QFY25: 28.1%
• 1QFY25: 23.9%
• 2QFY24: 27.0%

Key Result Takeaways:

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• Domestic revenue grew 2.6% YoY and volume grew 1.7% YoY.
• International business grew 6% YoY both in INR and constant currency terms. Ex-Bangladesh, international
revenues grew 12% YoY.
• A&P spend declined 150 bps YoY to 16.4% of revenues in 2QFY25.
• Increased stake in Helios Lifestyle (The Man Company) from 50.4% to 98.3%.
• Launched 11 new products during the quarter.
• Contribution of organized channels (Modern Trade, e-Commerce and Institutional sales) grew 190 bps in
1HFY25 to 26.6% of domestic business.

2. Astral Ltd (CMP: Rs 1,790| Mcap: Rs 48,060 cr)

2QFY25 Financial Update

• Consolidated Revenue at Rs 1,370.4 cr; up 0.5% YoY
• Consolidated EBITDA at Rs 210.1 cr; down 4.5% YoY
• Consolidated PAT at Rs 108.7 cr; down 17.5% YoY
• Poor show, numbers below street estimates
• The board declared an interim dividend of Rs 1.5 per share for FY25 with the record date set as 15th
November 2024.

EBITDA Margin:
• 2QFY25: 15.3%
• 2QFY24: 16.1%
• 1QFY25: 15.5%

Key concall takeaways

• Performance was impacted due to significant destocking done by dealers and distributors on the back on
increased volatility in polymer prices witnessing a decline of 13.5% in PVC prices during the quarter.
Extension of monsoon season and lower infrastructure spend from the government led to subdued
demand.
• Company booked an inventory loss of Rs 10-15 cr during the quarter.
• Plumbing business:
• Revenue down 1.4% YoY to Rs 966.4 cr, EBITDA margin expanded 40 bps YoY to 18.4%.
• Sales volume: 50,754 MT vs 52,079 MT YoY
• Bathware segment recorded an impressive growth of 63.2% YoY with revenue seen at Rs 28.9 cr
• CPVC saw strong double digit volume growth during 1HFY25. Trend is expected to continue in the
second half as well.
• Commercial production at the Hyderabad plant has commenced and is expected to gear up volumes in
2HFY25.
• Will launch PTMT Plastic Tap product range from 3QFY25 onwards, targeting around 150 SKUs by
Dec’24. Test runs are completed and the product has received good initial response.
• First machine for the company’s new venture into O-PVC pipes segment has arrived and trial
production has started. Commercial production will begin post receipt of approval from ISI. Two more
machines will be installed in 3QFY25.
• Paints & Adhesive business:
• Revenue up 5.6% YoY to Rs 404 cr, EBITDA margin down 450 bps YoY to 10.3%.
• Launched “Astral Paints” in Gujarat and Karnataka in Jun’24 and made foray into Maharashtra recently.
Plans to open shortly in Rajasthan.
• New advanced technology adhesives will be launched in India and the UK in the coming quarters.

View & Valuation: Anti-dumping duty on PVC imports is expected to stabilize prices, and an anticipation of
further price rise. The key growth drivers for the company include the launch of new products, strong
outlook for the CPVC segment, expansion into new geographies in paints & bathware businesses and
increase in capacity of pipes. At CMP of Rs 1,790, the stock trades at FY25E/FY26E P/E multiple of

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 69.4x/53.4x respectively. The stock is expected to trade in the range of Rs 1,700 – 1,800 in the near to
medium term.

3. Aavas Financiers Ltd. (CMP: Rs 1,721 | Market Cap: Rs 13,549 cr)

• NII / PPOP / PAT stood at Rs 329 cr / Rs 195 cr / Rs 148 cr, reflecting 13% / 20% / 22% YoY growth.
• Assets Under Management (AUM) rose to Rs 183 billion, marking a 20% YoY increase.
• GNPA / NNPA were at 1.08% / 0.78%, compared to 1.01% / 0.72% QoQ.

Management Call Highlights

• Asset Quality: Management has guided 1+ days past due (dpd) to remains below 5%, with a GNPA target
under 1.25%.
• Loan Growth & Disbursements: AUM guidance remains above 20%+ for 2HFY25E, with a stable loan book
mix.
• Improved Yield: Disbursement yields have improved by 25 bps, focusing on small-ticket loans and self-
construction individual houses.
• Operational Efficiency: The cost-to-assets ratio is expected to improve by 20-30 bps annually.
• Credit Cost: Expected to remain below 25 bps.

Our View: Aavas has delivered a strong performance in 2QFY25, showing steady growth in profitability.
Management anticipates robust disbursement growth in 2HFY25, with credit costs expected to stay below 25
bps for FY25E. Trading at a P/B of 3x FY25E, we estimate a near-term fair value in the range of Rs 1,870-1,900.

4. Cochin Shipyard Ltd. (CMP: Rs 1,523.9 | M-Cap: Rs 40,089.0 cr)

2QFY25 Consolidated Financial Overview

• Revenue at Rs 1,143.2 cr up 13.0%/48.2% YoY/QoQ
• EBITDA at Rs 197.3 cr up 3.2%/11.2% YoY/QoQ
• PAT at Rs 188.9 cr up 4.1%/8.4% YoY/QoQ
• Declares interim dividend of Rs 4 per share
• Trading at P/E multiple of 45.4x/33.4x of its FY25E/FY26E earnings

EBITDA Margin
• 2QFY25: 17.3%
• 1QFY25: 23.0%
• 2QFY24: 18.9%

5. ITD Cementation India Ltd. (CMP: Rs 543.4 | M-Cap: Rs 9,334.0 cr)

2QFY25 Consolidated Financial Overview

• Revenue at Rs 1,991.0 cr up 23.7% YoY and down 16.4% QoQ
• EBITDA at Rs 204.0 cr up 17.9% YoY and down 7.9% QoQ
• PAT at Rs 72.0 cr up 38.5% YoY and down 28.1% QoQ
• The order book as of Sep’24 stood at Rs 17,986.0 cr which is 2.1x of its 1HFY25 annualised sales
• Trading at P/E multiple of 23.6x/17.5x of its FY25E/FY26E earnings

EBITDA Margin
• 2QFY25: 10.2%
• 1QFY25: 9.3%
• 2QFY24: 10.7%

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6. Cummins India Ltd. (CMP: Rs 3,554.6 | M-Cap: Rs 98,532.0 cr)

2QFY25 Consolidated Financial Overview

• Revenue at Rs 2,465.1 cr up 30.2%/8.4% YoY/QoQ
• EBITDA at Rs 536.1 cr up 39.6%/13.3% YoY/QoQ
• PAT at Rs 449.4 cr up 36.5%/13.7% YoY/QoQ
• Trading at P/E multiple of 54.0x/46.1x of its FY25E/FY26E earnings

EBITDA Margin
• 2QFY25: 21.7%
• 1QFY25: 20.8%
• 2QFY24: 20.3%

7. Aditya Birla Fashion & Retail Ltd (CMP: Rs 297 | Mkt Cap: Rs 31,758 cr)

2QFY25 Financial Overview

• Consolidated revenue at Rs 3,644 cr; up 12.9% YoY
• Consolidated EBITDA at Rs 361 cr; up 11.8% YoY
• Consolidated net loss at Rs 215 cr vs. net loss of Rs 200 cr in 2QFY24
• In-line with expectations
• Trades at FY25E/FY26E Bloomberg consensus Price-to-Sales multiple of 2.0x/1.7x respectively

EBITDA Margin
• 2QFY25: 9.9%
• 1QFY25: 10.5%
• 2QFY24: 10.0%

Key Result Takeaways:

• Ethnic businesses grew ~3x YoY led by inclusion of TCNS and Tarun Tahiliani couture into the portfolio.
Organic growth was ~10% YoY
• TMRW’s portfolio grew >2x YoY.
• E-commerce sales grew 30%+ YoY.
• Lifestyle brands revenue grew 3% YoY to Rs 1,636 cr. Retail Like-to-Like (LTL) growth for the quarter was at
3.4% driven by well-rounded improvements across products (casualisation, younger fashion) and
enhancement of instore experience.

8. Lupin Ltd
• Revenue up 12.58% at Rs 5,672 cr vs Rs 5,038 cr YoY
• EBITDA up 41.66% at Rs 1,308 cr vs Rs 923.3 cr YoY
• EBITDA margin up 473 bps at 23.06% vs 18.32% YoY
• Net profit up 74.08% at Rs 853 cr vs Rs 490 cr YoY

9. NHPC Ltd
• Revenue up 4.12% at Rs 3,052 cr vs Rs 2,931 cr YoY
• EBITDA up 1.75% at Rs 1,799 cr vs Rs 1,768 cr YoY
• EBITDA margin down 137 bps at 58.94% vs 60.32% YoY
• Net profit down 36.85% at Rs 1,069 cr vs Rs 1,693 cr YoY

10. Rail Vikas Nigam Ltd

• Revenue down 1.2% to Rs 4,854.95 cr vs Rs 4,914.3 cr YoY
• EBITDA down 9% to Rs 271.5 cr vs Rs 298.3 cr YoY
• Margin narrows 50 basis points to 5.6% vs 6.1% YoY
• Net profit down 27% to Rs 286.9 cr vs Rs 394.4 cr YoY
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11. RPG Life Science Ltd
• Revenue up 11.68% at Rs 172 cr vs Rs 154 cr YoY
• EBITDA up 21.75% at Rs 45.17 cr vs Rs 37.1 cr YoY
• EBITDA margin up 217 bps at 26.26% vs 24.09% YoY
• Net profit down 83.84% at Rs 4.2 cr vs Rs 26 cr YoY

12. GMM Pfaudler Ltd

• Revenue down 14.09% at Rs 805 cr vs Rs 937 cr YoY
• EBITDA down 35.21% at Rs 92 cr vs Rs 142 cr YoY
• EBITDA margin down 372 bps at 11.42% vs 15.15% YoY
• Net profit down 74.62% at Rs 17 cr vs Rs 67 cr YoY

13. IRCON International Ltd

• Revenue down 19.3% to Rs 2,448 cr vs Rs 3,033 cr YoY
• EBITDA down 23% to Rs 201 cr vs Rs 262 cr YoY
• Margin at 8.2% vs 8.6% YoY
• Net profit down 18% to Rs 206 cr vs Rs 251 cr YoY

14. Indian Hotels Ltd

• Revenue up 27.42% at Rs 1,826 cr vs Rs 1,433 cr YoY
• EBITDA up 41.52% at Rs 501 cr vs Rs 354 cr YoY
• EBITDA margin up 273 bps at 27.43% vs 24.7% YoY
• Net profit up 225.69% at Rs 583 cr vs Rs 179 cr YoY

15. Gujarat Petronet Ltd

• Revenue down 15.54% at Rs 3,992 cr vs Rs 4,726 cr YoY
• EBITDA down 14.81% at Rs 707 cr vs Rs 830 cr YoY
• EBITDA margin up 14 bps at 17.71% vs 17.56% YoY
• Net profit down 19.73% at Rs 423 cr vs Rs 527 cr YoY

16. Emcure Pharma Ltd

• Revenue up 20.32% at Rs 2001 cr vs Rs 1663 cr YoY
• EBITDA up 15.5% at Rs 380 cr vs Rs 329 cr YoY
• EBITDA margin down 79 bps at 18.99% vs 19.78% YoY
• Net profit up 37.67% at Rs 201 cr vs Rs 146 cr YoY

17. Innova Captab Ltd

• Revenue up 12.5% to Rs 318.20 cr vs Rs 282.94 cr YoY
• EBITDA up 23% to Rs 49.73 cr vs Rs 40.48 cr YoY
• Margin at 15.6% vs 14.3% YoY
• Net profit up 53% to Rs 35.00 cr vs Rs 22.91 cr YoY

18. Yatharth Hospital and Trauma Care Services Ltd

• Revenue up 27.1% to Rs 217.77 cr vs Rs 171.28 cr YoY
• EBITDA up 20% to Rs 54.63 cr vs Rs 45.57 cr YoY
• Margin at 25.1% vs 26.6% YoY
• Net profit up 12% to Rs 30.95 cr vs Rs 27.60 cr YoY

19. India Glycols Ltd

• Revenue up 24.12% at Rs 962 cr vs Rs 775 cr YoY
• EBITDA up 21.87% at Rs 117 cr vs Rs 96 cr YoY
• EBITDA margin down 22 bps at 12.16% vs 12.38% YoY
• Net profit up 31.57% at Rs 50 cr vs Rs 38 cr YoY

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Key Actionable

• Brigade Enterprise: The company signed a JD pact to develop a 1 million sq ft residential apartment in
Chennai. The project is to have a gross development value of Rs 800 cr - Positive in long term

• Oil India: The company became the preferred bidder for phop graphite and vanadium blocks in Arunachal
Pradesh - Positive in long term

• Reliance Power: The company responded to SECI's decision to bar it from bidding on tenders for three
years, stating it has been a victim of fraud, forgery, and criminal conspiracy. The company filed a case with
the Economic Offences Wing on Oct. 16 and announced plans to legally challenge SECI's order - Neutral in
short term

• Vedanta: The company became the preferred bidder for depo vanadium and graphite blocks in Arunachal
Pradesh and sanyasikoppa cobalt, manganese and iron blocks in Karnataka - Positive in long term

• Hindustan Zinc: The company became the preferred bidder for Balepalyam tungsten in Andhra Pradesh
and Nayakkarpatti tungsten block in Tamil Nadu - Positive in long term

• Borosil Renewables: The government has initiated an anti-dumping investigation into the alleged dumping
of solar glass from China and Vietnam. The Commerce Ministry has recommended imposing a provisional
anti-dumping duty to protect the interests of domestic solar glass manufacturers - Positive in long term

• Adani Enterprises: NCLT approved merger of company’s arm with Adani Power's arm, Mahan Energen -
Neutral to Positive in short term

• ITI: The company with the consortium partner emerged as the lowest bidder for the Rs 3,022 cr BharatNet
project - Positive in long term

• Mahanagar Gas: The company will form a joint venture with US-based International Battery to produce
and sell battery cells in India. The company will acquire over 40% stake in the company for Rs 230 cr -
Positive in long term

IPO Offering

• Swiggy: The public issue was subscribed to 0.35 times on day 2. The bids were led by qualified institutional
investors (0.28 times), non-institutional investors (0.14 times), retail investors (0.84 times), and reserved
for employees (1.15 times).

• ACME Solar Holdings: The public issue was subscribed to 0.7 times on day 2. The bids were led by qualified
institutional investors (0.31 times), non-institutional investors (0.56 times), retail investors (2.04 times),
reserved for employees (0.98 times).

• Sagility India: The public issue was subscribed to 3.2 times on day 2. The bids were led by qualified
institutional investors (3.52 times), non-institutional investors (1.93 times), retail investors (4.16 times),
and reserved for employees (3.75 times).

• Niva Bupa Health Insurance: The public issue was subscribed to 0.65 times on day 1. The bids were led by
qualified institutional investors (0.79 times), non-institutional investors (0.33 times), and retail investors
(0.71 times).

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Pledge Share Details

• Asahi India Glass: Promoter Sanjay Labroo revoked a pledge for 14 lakh shares on Nov. 5.

Insider Trades

• Poonawalla Fincorp: Promoter Rising Sun Holdings Pvt. Ltd. bought 3.73 lakh shares on Nov. 6.

Trading Tweaks

• Ex/dividend: CAMS, Petronet LNG, TCI Express, IRB Infra, Global Education, Zee Entertainment, Dabur
India, REC.
• Ex/special dividend: CAMS,
• Ex/stock split: Roto Pumps. (Face Value split from Rs 2 to Rs 1.)
• Moved out short term ASM: CARE Ratings, Deepak Fertilizers and Petrochemicals Corporation, Syrma SGS
Technology.

Fund Flows – Cash Market

• FII (Rs cr): -4,888.8

• DII (Rs cr): +1,786.7

Bulk Deals – NSE

Name of the Company Name of the Client BUY/ SELL Price (Rs) Quantity % Traded
TEAMLEASE SERVICES T. ROWE PRICE INTERNATIONAL DISCOVERY FUND SELL 2,749.1 1,24,499 0.7%
PARAG MILK FOODS JAYDEV MUKUND MODY BUY 216.5 8,55,975 0.7%
ARROW GREENTECH TARUN SURESH JAIN BUY 1,066.9 77,000 0.5%

Deals shared for Companies with market cap above Rs 1,000 cr

Bulk Deals – BSE

Name of the Company Name of the Client BUY/ SELL Price (Rs) Quantity % Traded
TEAMLEASE SERVICES T. ROWE PRICE INTERNATIONAL DISCOVERY FUND SELL 2,747.4 1,34,375 0.8%
TUTICORIN ALKALI WALERY SECURITY MANAGEMENT LTD BUY 95.2 10,35,000 0.9%

Deals shared for Companies with market cap above Rs 1,000 cr.

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Block Deals – NSE

Name of the Company Name of the Client BUY/ SELL Price (Rs) Quantity % Traded
HDFC BANK PI OPPORTUNITIES AIF V LLP BUY 1,743.4 8,59,105 0.0%

HDFC BANK PRAZIM TRADING & INVESTMENT CO. PVT LTD SELL 1,743.4 8,59,105 0.0%
TRENT SIDDHARTHA YOG BUY 6,445.0 13,68,010 0.4%
TRENT DODONA HOLDINGS LTD SELL 6,445.0 13,68,010 0.4%
JIO FINANCIAL SERVICES CITIGROUP GLOBAL MARKETS SINGAPORE PTE LTD BUY 322.0 19,79,153 0.0%
JIO FINANCIAL SERVICES CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD SELL 322.0 19,79,153 0.0%
BAJAJ HOLDINGS & INVESTMENT CITIGROUP GLOBAL MARKETS SINGAPORE PTE LTD BUY 10,500.0 29,230 0.0%
BAJAJ HOLDINGS & INVESTMENT CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD SELL 10,500.0 29,230 0.0%
SONA BLW PRECISION CITIGROUP GLOBAL MARKETS SINGAPORE PTE LTD BUY 709.0 4,32,682 0.1%
SONA BLW PRECISION CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD SELL 709.0 4,32,682 0.1%

Deals shared for Companies with market cap above Rs 1,000 cr.

Source: BSE/NSE/Economic Times/Bloomberg Quint/Business Line/Business Standard/Financial Express/Money

control

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DISCLOSURES & DISCLAIMERS:

Analyst Certification: The views expressed in this research report ("Report") accurately reflect the personal views of the research
analysts ("Analysts") employed by SBICAP Securities Limited (SSL) about any and all of the subject issuer(s) or company(ies) or
securities. This report has been prepared based upon information available to the public and sources, believed to be reliable. I/We
also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendation(s)
or view(s) in this report.

The Analysts engaged in preparation of this Report or his/her relative:-

(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of the
equity securities of the subject company mentioned in the report as of the last day of the month preceding the publication
of the research report; (c) do not have any material conflict of interest at the time of publication of the Report.

The Analysts engaged in preparation of this Report:-

(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed
public offering of securities for the subject company in the past twelve months; (c)have not received any compensation for investment
banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) have not received any
compensation for products or services other than investment banking or merchant banking or brokerage services from the subject
company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third
party in connection with the Report; (f) has not served as an officer, director or employee of the subject company; (g) is not
engaged in market making activity for the subject company.

Name Qualification Designation

Sudeep Shah MMS-Finance DVP- Technical & Derivative Research
Sunny Agrawal B.E, MBA (Finance) DVP - Fundamental Research
Rajesh Gupta PGDBM (Finance), MA (Bus. Eco) AVP - Fundamental Research
Monica Chauhan C.A. Research Analyst - Equity Fundamentals
Harsh Vasa CA Research Analyst - Equity Fundamentals
Sumeet Shah B.E., CFA Research Analyst - Equity Fundamentals
Sweta Padhi MBA (Finance) Research Analyst - Equity Fundamentals
Uday Chandgothia B-Tech, MBA (Finance) Research Associate - Equity Fundamentals
Gautam Updhyaya MBA (Finance) Research Analyst - Equity Derivatives
Vinayak Gangule BE (IT) Research Analyst - Equity Technicals
Ghanshyam Gupta MBA (Finance) Research Analyst- Currency Derivative
Sagar Peswani B.Tech (ECE) Research Associate - Equity Technicals
Kalpesh Mangade B.Com MIS Analyst - Retail Research

For other Disclosures please visit: https://bit.ly/R_disclaimer02

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 Sudeep Shah

DVP – Technical & Derivative Research

Sunny Agrawal
DVP – Fundamental Research

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