Académique Documents
Professionnel Documents
Culture Documents
Revenue growth for 9MFY17 was subdued due to lower commodity prices and demonetization. But the operating margin continues to remain
accretive during the same period. We expect 5% and 15% revenue growth in FY17E and FY18E respectively based on the strong traction in
Transmission and railway business with strong operating margin. We recommended this stock at Rs. 148 for the target price of Rs. 217 and the
stock have achieved our recommended target price. Fundamentally we remain bullish on the stock based on strong order book position and
improving operating margin but on the valuation front, we are not comfortable at current price level (currently stock is trading at 3.2x of P/B of
FY17). Hence, we advise our investors to Book profits at the current price..................... ( PAGE : 17-21)
Result Update Stake sale in DHFL Pramerica Life Insurance (DPLI) completed.
CMP 393 Stake sale in DHFL Pramerica Life Insurance (DPLI) has been completed at
Target Price 497 the higher valuation range of Rs 2000 Cr. Earlier DHFL entered into an
agreement with its promoter to sell its 100% of share held in DHFL
Previous Target Price 385
Pramerica Life Insurance (DPLI) (equivalent to 50% of the paid-up capital of
Upside 26% DPLI) to its wholly owned subsidiary DHFL Investment Ltd (DIL). Investment
Change from Previous 29% of DHFL in DPLI was mere Rs 31 Cr. To fund this transaction, DIL will issue
compulsorily convertible debentures (CCDs) to the promoters entity
Market Data (Wadhawan Global Capital). Due to this deal we factor 25% increase in
networth. With strong capitalization and focus on affordable segment we
BSE Code 511072 expect 20% growth in AUM going forward.
NSE Symbol
DHFL
52wk Range H/L 395/182
3Q FY17 Result Highlight
Mkt Capital (Rs Cr) 10159
Av. Volume (,000) 281 DHFL posted 3Q FY17 PAT at Rs 244 Cr up 31% YoY owing to better NIMs
Nifty 8898 which improved by 11 bps YoY and was stable QoQ. NII growth was strong
at 21% YoY. Operating expenses were under control and grew by just 9%
YoY. C/I ratio improved to 26.5% against 29.5% a year back. AUM grew by
Stock Performance
19% YoY despite the challenging times during demonetization.
1Month 1Year YTD
Disbursement was muted to 10% growth YoY, however considering
Absolute 14.5 109.6 57.3 demonetization impact we had anticipated it even lower. Assets quality was
Rel.to Nifty 12.8 87.2 44.3 stable with GNPA at 95 bps sequentially.
Concall Highlights
Profitability Metrix 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Yield% (Cal.) 11.67 11.25 11.18 11.48 11.46 11.30 10.92 11.53 12.06
Cost of Fund% (Cal.) 10.05 9.90 9.69 9.92 9.75 9.77 9.45 9.18 9.29
Spread% (Cal) 2.82 2.57 2.78 2.88 3.05 2.91 2.87 2.35 2.77
NIM% 2.77 2.89 2.96 2.86 2.87 2.96 2.91 3.05 3.07
C/I Ratio 32.18 29.73 29.97 29.03 29.46 31.76 28.11 26.09 26.48
AUM MIX %
Disbursement Growth% YoY
Housing LAP/LRF Project Others
120 35%
32%
30% 31% 31%
100 6 8 9 10 12 13
17 16 16 16 25% 24%
26%
80 16 16 22%
20%
60 18%
15%
14%
76 74 12%
40 72 72 70 69 10% 10%
20 5%
0%
0
2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
-
3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Loan Mix %
BALANCE SHEET Housing Loan 83 78 75 72
FY13 FY14 FY15 FY16 LAP 11 16 18 16
Share Capital 128 128 146 292 Project 6 6 6 10
Reserves 3,109 3,447 4,490 4,725 Others - - 1 2
Net Worth 3,237 3,575 4,636 5,017 Total AUM (Rs in Cr) 36,117 44,822 56,884 69,524
Long term Debt 26,565 32,295 36,889 45,119 Borrowing Mix %
Short term Debt 876 1,595 3,637 6,437 NCD 11 20 28 33
Total Borrowing 27,441 33,890 40,526 51,556 Bank 71 68 58 53
Long Term Provision 264 331 430 583 Others 18 12 14 14
Other Liability 4,862 6,063 9,046 10,697 Resource Mobilization (Rs in Cr) 32,058 39,487 48,921 61,104
Total Liability 35,803 43,859 54,638 67,853
Fixed Assets 438 988 985 781 About the Company
Non-current investments 191 307 611 720 DHFL was founded in 1984 and is promoted by Wadhawan
Current investments 85 269 396 173 Group. Focused on low and medium income group it operates
Loans/Advances 34,222 41,016 51,511 62,295 mainly in tier 1 and tier 2 cities with its presence in 363 cities. It
Cash & Bank Balances 513 983 676 3,408 has total AUM of Rs 783 Billion .
Other Assets 356 297 460 476 Chairman & MD Kapil Wadhawan
Total Assets 35,803 43,859 54,638 67,853 CEO Harsil Mehta
5
Narnolia Securities Ltd
The company has to increase direct reach but it will not cost much.
Due to demonetization, whole sale trade is impacted and there is no sign of it coming back in near term.
Management is looking for acquisition but Target Company is still not in the view.
27% rise in modern trade volume in this quarter. Modern trade contributed 5.2% of the total sales in Q3FY17.
Contribution from rural remained 42.5% in this quarter and in pre demonetization it was 43.6%.
New product launch will happen in 1QFY18.
Announced temporary incentive to channel partners.
Canteen trade reduced by13.5% in this quarter.
The company has reserve of LLP till March 2018. It can go beyond this if volume will remain like that.
LLP prices remained Rs46/kg for this quarter and presently, it is trading at Rs 54/kg.
Volume growth in light hair oil 2.1%
International business grew by 72% YoY in this quarter and contributed more than 5% in this quarter.
Plans for entering in larger market Russia, Indonesia and Egypt is under way.
BAJAJ CORP is engaged in the business activity of trading and manufacturing of cosmetics, toiletries and other personal care
products. It is a fast moving consumer goods (FMCG) company. The Company's products include Bajaj Kailash Parbat Thanda
Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Jasmine Hair Oil, Bajaj Nomark Oily Skin Face Wash, Bajaj
Nomarks Herbal Scrub Soap, Bajaj Nomark Oily Skin Cream, Bajaj Nomarks Neem Soap, Bajaj Nomarks Oil Control Soap and
others. The Company has approximately nine Factory, of which four units are situated in Himachal Pradesh , three units are
situated in Uttrakhand for manufacturing of various variants of hair oils and Nomarks and other unit is situated in Guwahati and
one unit Bangladesh.The company reaches consumers through 3.6mn retail outlets serviced by 7707 distributors and 11500
wholesalers.
4%
2%
2%
2% 1%
0%
2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
-2%
-4% -4%
-4%
-6%
150
209
208
204
197
196
100
187
54 52 58 58
47 49
50
0
2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
70
59.51 58.82
54.7
50 46.41 43.91 46.37
30
10
Result Update
New launches and bottoming out of exports to drive growth
CMP 472
Target Price NA TVS Motors reported strong volume growth of 9%YoY in FY17. 23%YoY
Previous Target Price growth in the Moped segment during the year led to 11%YoY in two
wheelers segment. Three wheelers segment de-grew by 38%YoY in FY17.
Upside
Exports witnessed a tough time during FY17 because of currency availability
Change from Previous issue in the various African countries where the company has good export
exposure. In March 2017 the company posted 24%YoY growth in the
Market Data exports which suggest that the weakness in the export has bottomed out.
BSE Code 532343 The management is also very auspicious based on the robust pipeline of
launches across all categories in FY18. Scooters and premium segment
NSE Symbol TVSMOTOR motorcycles will drive the higher realization and margins for the company.
52wk Range H/L 474/278 The most awaited concept bike in alliance with BMW will also be launched
Mkt Capital (Rs Cr) 22,258 in 2017. TVS-BMW alliance will further strengthen company's presence in
premium bike segment which in turn boost company's margin by the change
Av. Volume 99639
in product mix and give an opportunity to expand it's footprint in foreign
Nifty 9,198 markets.
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
Concall Highlights
Management expects double digit growth in FY18.
Capex plan Rs.400 crore in FY17.
BMW project going as per plan and the product will be launched in 2017.
Urban and rural mix are 55% and 45% respectively. Urban sales is higher due to scooterization.
Newly launched Victor monthly run-rate is 20000 units.
Moped segment growth is coming from new model launches and 40% contribution of total sales is from North region.
Management is also looking into non permit driven markets for 3 wheelers.
Exports have been sluggish due to restricted availability of dollars and currency devaluation in some countries.
Market share target 18% in 2 wheelers and 27-28% for 3 wheelers in exports.
25 crore of investment in Indonesian subsidiary in 4QFY17 looking at the growth on 9 month basis.
The Indonesian subsidiary has started showing improvements in topline with 55% growth in 1HFY17 vs HFY16.
Margin guidance of 10 percent by FY18.
Inventory days-28 in 3QFY17 and it will be 30-32 days in 4QFY17.
No big pressure on commodity prices of rising steel price.
The company will review prices in 4QFY17 depending on the commodity price increases.
Tax benefit in Himachal plant will lapse in FY17. It contributes around 10% of total production.
Tax rate would be in the range of 24-25% in FY17.
Plant Detail
Key Risks
Result Update
New launches and bottoming out of exports to drive growth
CMP 472
Target Price NA TVS Motors reported strong volume growth of 9%YoY in FY17. 23%YoY
Previous Target Price growth in the Moped segment during the year led to 11%YoY in two
wheelers segment. Three wheelers segment de-grew by 38%YoY in FY17.
Upside
Exports witnessed a tough time during FY17 because of currency availability
Change from Previous issue in the various African countries where the company has good export
exposure. In March 2017 the company posted 24%YoY growth in the
Market Data exports which suggest that the weakness in the export has bottomed out.
BSE Code 532343 The management is also very auspicious based on the robust pipeline of
launches across all categories in FY18. Scooters and premium segment
NSE Symbol TVSMOTOR motorcycles will drive the higher realization and margins for the company.
52wk Range H/L 474/278 The most awaited concept bike in alliance with BMW will also be launched
Mkt Capital (Rs Cr) 22,258 in 2017. TVS-BMW alliance will further strengthen company's presence in
premium bike segment which in turn boost company's margin by the change
Av. Volume 99639
in product mix and give an opportunity to expand it's footprint in foreign
Nifty 9,198 markets.
Sep-16
Feb-17
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-17
Concall Highlights
Management expects double digit growth in FY18.
Capex plan Rs.400 crore in FY17.
BMW project going as per plan and the product will be launched in 2017.
Urban and rural mix are 55% and 45% respectively. Urban sales is higher due to scooterization.
Newly launched Victor monthly run-rate is 20000 units.
Moped segment growth is coming from new model launches and 40% contribution of total sales is from North region.
Management is also looking into non permit driven markets for 3 wheelers.
Exports have been sluggish due to restricted availability of dollars and currency devaluation in some countries.
Market share target 18% in 2 wheelers and 27-28% for 3 wheelers in exports.
25 crore of investment in Indonesian subsidiary in 4QFY17 looking at the growth on 9 month basis.
The Indonesian subsidiary has started showing improvements in topline with 55% growth in 1HFY17 vs HFY16.
Margin guidance of 10 percent by FY18.
Inventory days-28 in 3QFY17 and it will be 30-32 days in 4QFY17.
No big pressure on commodity prices of rising steel price.
The company will review prices in 4QFY17 depending on the commodity price increases.
Tax benefit in Himachal plant will lapse in FY17. It contributes around 10% of total production.
Tax rate would be in the range of 24-25% in FY17.
Plant Detail
Key Risks
Company Update Recently Reliance Jio has withdrawn Jio summer surprise offer on TRAI's
CMP 1434 advice. Now to avail Jio services users have to opt for subscription plans.
We expect that this move will further boost the revenues from Jio.
Target Price 1680
According to management 72mn customers have already opted for Jio
Previous Target Price 1408 prime membership till 31 March 2017. As per the Jios management
Upside 17% estimates, EBITDA margin for Jio in FY18 will be more than 50%. Recently
Change from Previous 19% Jio has announced booster packages starting from Rs 11 going up to Rs
301 to provide additional data to its users. . On the Petro-chemicals front,
Reliance has commissioned the first phase of new Paraxylene (PX) project
Market Data at Jamnagar in Q3FY17 and with the commissioning of this plant, PX
BSE Code 500325 capacity will be more than double from 2.0 to 4.2 MTPA. Further
NSE Symbol RELIANCE management has guided for re-opening of its 1400 retail outlets, which will
52wk Range H/L 1448/925 boost the revenue of petrochemicals segment.
Mkt Capital (Rs Cr) 465956 Outlook
Av. Volume(,000) 677 Jio is rapidly capturing market share by providing attractive offers to its
Nifty 9258 prime members and has also promised to offer 20% more data than any
other rivals. Now Jio is targeting to boost its revenue by retaining its
customers. Recently Reliance has rallied smartly and has crossed our
Stock Performance target price of Rs. 1408. We are still optimistic in this stock and hence we
1M 3M 12M recommend HOLD rating for our long-term investors with the revised
Absolute 8.4 36.9 39.3 target price of Rs. 1680
Rel.to Nifty 4.9 16.8 30.7 Corporate Highlights For The Quarter
Gross Refining Margin (GRM) of USD 10.8/bbl for the quarter
Share Holding Pattern-% In December 2016, RIL commissioned the first phase of new Paraxylene
3QFY17 2QFY17 1QFY17 project at Jamnagar
Promoters 46.5 46.7 46.7 Outstanding debt as on 31st December 2016 was Rs.194,381 cr
Public 53.5 53.3 53.3 compared to Rs. 180388 cr as on 31st March 2016.
Others 0.0 0.0 0.0 The capital expenditure for 3Q FY 17 was Rs. 37,791 crore.
Total 100.0 100.0 100.0 Interest cost was at Rs. 1,209 crore in 3QFY17 as against Rs. 945 crore
in corresponding period of FY16, increase is primarily on account of higher
Company Vs NIFTY average exchange rate for the quarter.
140 RELIANCE NIFTY Reliance has operated 1,151 petroleum retail outlets in the country in
130
3QFY17.
120 Exports from India operations were higher by 4.0% at Rs. 38,038 crore
110 Rs,Cr
Financials 2012 2013 2014 2015 2016
100
90
Sales 358501 397062 434460 375435 276544
EBITDA 34508 33045 34799 37364 44257
80
Net Profit 19724 20879 22493 23566 27630
Jul-16
Sep-16
Jan-17
Dec-16
Jun-16
Aug-16
May-16
Oct-16
Nov-16
Apr-16
Apr-17
Mar-16
Mar-17
EPS 60 65 70 73 85
Aditya Gupta P/E 12.4 12.0 13.4 11.3 12.3
aditya.gupta@narnolia.com
Narnolia Securities Ltd 16
Please refer to the Disclaimers at the end of this Report
Petrochemical business
3Q FY17 revenue from the Petrochemicals segment increased by 17.8% YoY to Rs. 22,854 crore, primarily due to increase in
prices across polymers and polyester chain.Petrochemicals segment EBIT increased sharply by 25.5% to Rs. 3,301 crore,
supported by favorable product deltas and marginal volume growth.
E&P Business
3Q FY17 revenues for the Oil & Gas segment decreased by 31.0% YoY to Rs. 1,215 crore. The decline in revenue was led by
lower upstream production and lower domestic gas price realization. The unfavorable upstream price environment impacted
segment EBIT which was at Rs. (295) crore, as against Rs. 258 crore in the corresponding period of the previous year. Domestic
production (RIL share) was at 23.1 Bcfe, down 24% YoY. For the accounting quarter, upstream production (RIL Share) in US
Shale business was 41.4 Bcfe, down 19% YoY basis.
Organised Retail:
Revenues for 3Q FY17 grew by 47.2% Y-o-Y to Rs. 8,688 crore from Rs. 5,901 crore. The increase in turnover was led by growth
across all consumption baskets. The business delivered strong PBDIT of Rs. 333 crore in 3Q FY17 as against Rs.237 crore in
the corresponding period of the previous year. During the quarter, Reliance Retail added 111 stores across various store
concepts. Trends crossed a milestone of 300 stores during the quarter. At the end of the quarter, Reliance Retail operated 3,553
stores across 686 cities with an area of over 13.25 million square feet.
During 3Q FY17, revenue from the Refining and Marketing segment increased by 7.5% YoY to Rs. 61,693 crore ($ 9.1 billion).
Segment EBIT was at Rs. 6,194 crore, down 4.3% YoY on account of lower volumes and decline in GRMs. GRM for 3Q FY17
stood at $ 10.8/bbl as against $ 11.5/bbl in 3Q FY16. Reliance GRM outperformed Singapore complex margins by $ 4.1/bbl.
Reliance Jamnagar refineries processed 17.8 MMT in 3Q FY17, marginally lower on QoQ. As at the end of the quarter, Reliance
operated 1,151 petroleum retail outlets in the country.
Digital service
During the quarter, Jio announced the launch of the Jio Happy New Year Offer (JNO) effective from 4th December 2016.
Under the JNO, all the Jio subscribers are entitled to certain special benefits, which comprise of Jios Data, Voice, Video and the
full bouquet of Jio applications and content, absolutely free, up to 31st March 2017.Till 31st Dec 2016 there were 72.4 million
subscribers on the network.Jio is the only operator in India to deploy pan-India LTE on a sub-GHz band, in addition to pan-India
1800MHz and 2300MHz spectrum band.
2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Petrochemicals Revenue 27,128 27,121 26,541 25,398 26,651 23,001 21,754 20,858 21,239 19,398 20,915 20,718 22,422 22,854
Petrochemicals EBIT 2,381 2,115 2,150 1,863 2,361 2,064 2,003 2,338 2,531 2,639 2,713 2,806 3,417 3,301
Petrochemicals EBIT Margin 9% 8% 8% 7% 9% 9% 9% 11% 12% 14% 13% 14% 15% 14%
Exploration & Production
2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Oil and Gas Revenue 2,682 2,926 2,798 3,178 3,002 2,841 2,513 2,057 2,067 1,765 1,638 1,340 1,327 1,215
Oil and Gas EBIT 956 607 762 1,042 818 832 489 32 242 90 14 (312) (491) (295)
Oil and Gas EBIT Margin 36% 21% 27% 33% 27% 29% 19% 2% 12% 5% 1% -23% -37% -24%
Retail
2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17
Organized Retail Revenue 3,470 3,941 3,653 3,999 4,167 4,686 4,788 4,698 5,091 6,042 5,781 6,666 8,079 8,688
Organized Retail EBIT 70 38 24 81 99 133 104 111 117 147 131 148 162 231
Organized Retail EBIT Margin 2% 1% 1% 2% 2% 3% 2% 2% 2% 2% 2% 2% 2% 3%
Investment Rationale
Massive Capex programme coming onstream: RIL has spent ~70% of the planned USD1850Cr capex (this number was
USD1650Cr earlier) on its four key projects (petcoke gasification, polyester expansion, off-gas cracker and ethane
sourcing). We believe that the three expansion projects: petcoke gasifier, refinery off-gas cracker, and ethane intake
facilities will be fully operational by FY17E.The companys massive capex programme will push future earnings.
Telecom launch in FY18: The commercial launch will give us better visibility on execution, business outlook, and earnings.
RIL is the largest private player in the refining, petrochemical and E&P sectors in India.The petrochemicals segment includes
production and marketing operations of petrochemical products which include, polyethylene, polypropylene, polyvinyl chloride,
poly butadiene rubber, polyester yarn, polyester fibre, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics,
linear alkyl benzene, butadiene, acrylonitrile, caustic soda and polyethylene terephthalate. The refining segment includes
production and marketing operations of the petroleum products. The oil and gas segment includes exploration, development and
production of crude oil and natural gas. RIL has made significant investments in US shale gas. In terms of EBIT, Refining
contribute 60% and Petrochemicals 30%. RIL is also expanding its presence in the areas of consumer retailing and telecom.
Net sales de grew by the 6.5% YoY to Rs. 1965 Cr in Q3FY17 as compared to Rs. 2101 Cr in Q3FY16
EBITDA margin has improved by 135 bsp to Rs. 182 Cr as against Rs 167 Cr on account of 10% plus margin in T&D and
improved performance of railway and SAE business.
KEC has reported 102% YoY growth in PAT with 200 bps improvement on back of higher EBITDA
During the quarter KEC has secured Rs.2706 Cr of new orders in Q3FY17 (up by 20% YoY) and Rs. 8634 Cr in 9 months of
FY17, which is up by 26% YoY
Order book as on 31st December stands at Rs.11175 Cr, ie. 1.3x of TTM revenue.
Demonetization, delay in conversation of L1 orders into firm order and land acquisition issue at Jammu and Kashmir project led
to de growth in revenue
Management has guided 5% and 10-15% revenue growth in FY17 and FY18 respectively.
EBITDA margin in FY17 will be 9% and it will improve further in FY18
EBITDA margin of SAE tower was 8-9% in Q3FY17
Faced some serious issue in logistic in November and December month due to demonization but now situation is under control.
Losses in Cable segment has come down significantly on YoY
Revenue loss of 50-60 Cr due to demonization
Maintain revenue guidance in railway segment of Rs. 450-500 Cr and Rs.1000 cr in FY18
Interest cost as % of sales will be 2.7% in FY18
Significant improvement in solar business from next year as the KEC is in L1 position of large project. EBITDA margin is slightly
below than normal margin but cash generating on PBT level
Expect to bring down AR collection days to 180 from 218 days based on the release of retention money from Saudi projects
Land acquisition issue at Jammu and Kashmir project has been resolved
Expect more orders from SEBs compare to PGCIL
Order Book 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 YoY% QoQ%
Transmission 7,356 6,921 7,131 7,903 7,207 7,028 7,087 7,334 7,442 8,054 15% 8%
SAE 931 876 951 948 1,086 937 1,134 1,769 1,510 1,342 43% -11%
Cables 279 263 570 632 592 469 472 104 216 224 -52% 4%
Railways 279 263 475 738 691 562 567 936 1,186 1,342 139% 13%
Water 466 438 380 316 - 281 189 208 216 112 -60% -48%
Solar 9 9 - - 296 75 38 52 183 101 34% -45%
Total 9,320 8,770 9,508 10,537 9,872 9,351 9,487 10,403 10,753 11,175 20% 4%
Order Intake
Transmission 583 1,478 1,909 2,375 1,024 1,595 1,370 1,469 1,738 1,651 4% -5%
SAE 231 485 421 123 181 247 206 678 465 298 20% -36%
Cables 253 412 393 309 181 270 206 198 279 244 -10% -13%
Railways - 48 84 278 90 90 56 424 528 460 412% -13%
Water - - - - - - - - - -
Solar 11 5 3 - 30 45 38 57 93 54 20% -42%
Total 1,078 2,428 2,811 3,085 1,506 2,246 1,877 2,825 3,103 2,706 20% -13%
22
Narnolia Securities Ltd
KEC International Limited is an India-based company, engaged in infrastructure engineering, procurement and construction
(EPC). The Company is also a manufacturer of power cables and telecom cables in India. The Company operates in four
business verticals, which include power transmission and distribution, cables, railways and water. The Company is also a provider
of turnkey solution in the railway infrastructure EPC space. The Company has powered infrastructure development across 50
countries in developed, developing and emerging economies of South Asia, the Middle East, Africa, Central Asia, the United
States and South East Asia. The Company has eight manufacturing facilities for lattice towers, monopoles, hardware and cables.
Power Transmission
Cabels Railways Water
& Distribution
Electrification
Supply EPC
Manufacturing Facilities
Tower Manufacturing
India, Brazil and Vadodara (Gujarat)
Mexico Mysore (Karnataka)
(SAE Annual Silvassa (Union
production capacity Territory)
100000 MTs)
Company Update Aurobindo Pharma clears USFDA inspection for Unit-11 in Srikakulam,
CMP 681 Andhra Pradesh with zero observations. The Unit-11 plant produces non-
antibiotic active ingredients,which is used for both the captive purpose of
Target Price 890
Aurobindos formulation manufacturing and for supplies to external
Previous Target Price 890 customers. The US formulation business contributes 45 percent of
Upside 31% Aurobindos total revenue Rs.13,890 cr. The acquired business(Agile
Change from Previous 0% Pharma) continues to see profitable during Q3FY17. As on 31 Dec 2016,
Auro pharma has transferred manufacturing of 60 products from Europe to
Vizag facility in India. Management expects supply from this facility to EU
Market Data markets from FY18E. The estimated sales revenue from this facility is Rs.
BSE Code 524804 1300 Cr. per annum. Apart from that recent approvals from USFDA in
NSE Symbol AUROPHARMA various segment will enable the company to launch multiple products in
52wk Range H/L 895/622 FY18E
Mkt Capital (Rs Cr) 39900 Outlook
Av. Volume(,000) 232924
Nifty 9237 We expect Auropharma will be able to register growth from the US and EU
business, on the back of 40-45 launches which are expected in FY18.
Apart from that management is focusing to develop dermatology,
Stock Performance
Ophthalmology segments which will help the company to diversify its
1M 3M 12M
portfolio in future. Currently the stock is trading at 5 times FY17 P/B and 17
Absolute -0.3 0.9 -9.0 times FY17 P/E. Considering the above arguments we maintain HOLD
Rel.to Nifty -3.6 -12.3 -27.6 rating in this stock with the target price of Rs.890
Result Update
CMP 322 Recent Development :-
Target Price 350 Recently, KALPATPOWR has received orders worth of Rs. 1202 Cr in
Previous Target Price 320 Transmission and Railway segment. Company has secured 738 Cr worth of
Upside 9% transmission projects in Telengana (Rs.402 Cr) and Abu Dhabi (Rs.336 Cr)
Change from Previous 9% and big ticket size order worth of Rs.464 Cr in key Railway segment from
Railway Vikas Nigam Limited. With this order win KALPATPOWR
standalone order book stands at Rs.9502 Cr, which gives strong revenue
Market Data
visibility (1.95x of TTM revenue) going forward. Managements has reiterated
BSE Code 522287 15-20% revenue growth in FY 18 based on the current order book and
NSE Symbol KALPATPOWER company will continue to build portfolio of projects in Railway EPC sector,
52wk Range H/L 333/202 which will be key growth driver going forward. Companys real estate arm
Mkt Capital (Rs Cr) 4,942 JMC has also won orders in Residential and commercial building worth of
Av. Volume 23737 Rs.1058 Cr.
Nifty 9174
Strong Opportunity in Infra Segment:-
Stock Performance Currently, Infra segment (Pipeline and Railway) contributes only 10% of the
1Month 3 Month 1Year Order book but we see huge opportunity going forward especially in Railway
Absolute 14.5 29.9 57.4 segment. KALAPTPOWER has strong order pipeline of 3000 Cr and 1500
Rel.to Nifty 12.0 17.8 38.8 Cr in Railway and Pipeline business respectively. Railway Ministry has set a
target to award 2000 Km, 4000 Km and 6000 km of overhead electrification
orders in FY17, FY18 and FY19 respectively which provides huge
Share Holding Pattern-%
opportunity going forward. Shri Shubham logistics business remained
3QFY17 2QFY17 1QFY17
muted in Q3FY17 due to demonization and we do not expect significant
Promoters 59% 59% 59% improvement in it inFY17
Public 41% 41% 41%
Others 0% 0% 0%
Outlook & Valuation:-
Total 100% 100% 100%
The current order win of Rs.1202 Cr further strengthen the standalone order
Company Vs NIFTY book position, which provides strong revenue visibility (1.95x of TTM
155 revenue) going ahead. Advanced stage of overseas projects in transmission
KALPATPOWR NIFTY
will help to register strong revenue growth of 20% in FY17. Considering the
145 railway ministries ambitious target, we see tremendous growth opportunity
135 for the company like KAPLATPOWR. Based on the recent order win,
especially from Railway we have revised our target price to Rs.350
125
(Standalone business at 290 per share and Subsidiaries at 60 per share)
115 and we recommend HOLD on the stock.
105
Financials Q3FY17 Q2FY17 Q3FY16 YoY % QoQ %
95 Sales 1158 1143 899 29% 1%
Dec-16
Jun-16
EBITDA
Oct-16
Nov-16
Apr-16
Jul-16
Feb-17
Mar-16
Mar-17
Jan-17
Aug-16
May-16
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