Eicher Motors - Result Analysis Q1 FY21

Eicher Motors - Result Analysis Q1 FY21

CMP: 21,6710768 (As on 14-08-2020)

Revenue from operations 818 Crs 

2,382 Cr (-65.42%) YoY | 2,208 Cr (-62.98%) QoQ 

Year ending revenue: 9,154 Cr Vs. 9,797 Cr (-6.16%)

Net Profit of (55.18) Cr 

451.7 Cr (-112.31%) YoY 304.2 Cr (-118.13%) QoQ 

Year ending Net profit: 1,827 Cr Vs. 2,203 Cr (-17.34%)

EPS (in Rs.) (2.02)

16.55 YoY | 11.14 QoQ 

Year ending EPS: 66.39 Vs. 80.45

View: Result is line with the expectation The last quarter has been challenging for the commercial vehicle industry with almost complete wash out in the first two months of the quarter on account of the pandemic due to YoY revenue and profit significantly corrected. 

Business Updates & Highlights:

EBITDA in Q1FY21 was around INR 3.56 Cr Vs. 614.4 Cr in Q1FY20 Vs. 432.2 Cr in Q4FY20 therefore declined by 99.4% in YoY and 99.1% in QoQ. EBITDA margin in Q1FY21 was around 0.4% Vs. 27.9% in YoY Vs. 19.6% in QoQ. 

Royal Enfield sold 58,383 motorcycles in the quarter, a decline of 68% from 181,966 motorcycles sold over the same period in FY 2019-20.

VECV’s revenue from operations was Rs. 641 crores, down by 72% from Rs. 2,255 crores in the same period last year; EBITDA loss was Rs. 72 crores as against profit of Rs. 137 crs last year in the corresponding quarter. Loss of Rs. 120 crs against profit of Rs. 38 crs last year. VECV registered an 84% decline in sales with 2,129 units as against 13,331 units in the Q1 of last year.

Board of Directors of the Company has fixed August 25, 2020 as the Record date for determining eligibility of members for the purpose of sub-division of each equity share of face value of Rs. 10/- each into ten (10) equity shares of face value of Rs. 1/- each EPS has been computed on the basis of number of new equity shares on the record date. 

Financial

ROE and ROCE is around 20% and 25% respectively and book value per share is around INR 3,655 and share is currently trading at 6x of its book value. Company is currently trading at annualized PE of around 50 (forward PE) which is expensive as per Industry benchmark. Promoter holding in the company is around 49.2% which is good and stable. FIIs and mutual fund hold around 26.9% and 9.3% respectively. 

Position: Share strong support price is INR 20,600/18650. Long term investor based on their risk appetite can continue with the company. 

Share View: Share price high 23,427 (52 week) and now 21,700. Eicher Motors Limited (EML) is the listed parent of Royal Enfield, the global leader in middleweight motorcycles. The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901., Royal Enfield operates in India, and over 50 countries around the world. Addition to motorcycles, Eicher has a joint venture with Sweden’s AB Volvo - VE Commercial Vehicles Limited (VECV) - which is driving modernization in India's commercial vehicle space, and in other developing countries. VECV has a complete range of trucks and buses from 5-49 tonnes, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-litre engines for Volvo Group.

Opportunities

VECV has signed an agreement for the integration of Volvo Bus India (VBI) business into VECV. This will cover the manufacturing, assembly, distribution, and sales of the Volvo Buses in India, and other rights forming part of the business. Consequently, the bus manufacturing facility at Hosakote, Bengaluru, and all employees of VBI will be transferred to VECV. VBI is currently a division of Volvo Group India Private Limited (VGIPL). VECV has now become the first company in the CV industry to offer 100% connected vehicles to its customers. With the advanced EUTECH6 technology backed up by connectivity. EML is expected to maintain its stronghold in the target sub-segment over the medium term, backed by its strong brand and value proposition, established track record in the Indian market and after-sales service network. The good thing is company is virtually debt free and strong hold by FIIs and mutual fund also. 

Risk

EML’s market share in the overall domestic 2W industry has remained moderate at 4% over the last two to three years, declining to 3.4% in 6M FY2020 because of its segmental concentration in the premium category. In the backdrop of coronavirus pandemic led economic slowdown and resultant impact on the financial performance of the company in FY21. Negligible topline growth for past 5 years. 

Eicher Motors Stock Split: Board of Directors of the Company has fixed August 25, 2020 as the Record date for determining eligibility of members for the purpose of sub-division of each equity share of face value of Rs. 10/- each into ten (10) equity shares of face value of Rs. 1/- each** EPS has been computed on the basis of number of new equity shares on the record date.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Balkrishna Ind - Result Analysis Q1 FY21

Balkrishna Ind - Result Analysis Q1 FY21

CMP: 1,347 (As on 14-08-2020)

Total income from operations 942.6 Cr 

1,199 Cr (-21.41%) YoY | 1,372 Cr (-31.28%) QoQ 

Year ending revenue: 4,811 Cr Vs. 5,210 Cr (-7.61%)

Net Profit of 131.5 Cr 

176.9 Cr (-24.41%) YoY 264.7 Cr (-50.33%) QoQ 

Year ending Net profit: 959.7 Cr Vs. 774 Cr (23.94%)

EPS (in Rs.) 6.81

9.15 YoY | 13.69 QoQ 

Year ending EPS: 49.64 Vs. 40.02

View: Result is overall good and fair. YoY and QoQ revenue declined and profit also declined but pickup in sales volumes in May and June. 

Business Updates & Highlights:

Q1FY21 standalone EBITDA was around INR 251 Cr Vs. 296 Cr in Q1FY20 therefore declined by 15.2% in YoY. EBITDA margin in Q1FY21 was 26.7% Vs. 24.3% in Q1FY20. Increased in EBITDA margin by 240 bps. 

Sales Volumes 38,096 MT for Q1FY21. The pickup in sales volumes in May and June led to a total sales volume of 38,096 MT in Q1FY21. The monthly run rate is gaining momentum and is very visible in July and August.

Capex Updates

Replacement of Waluj Plant New state of the art fully integrated facility at a capex of approximately Rs. 500 crores to replace a very old existing plant to enhance productivity.

Capex at Bhuj Plant Upscaling to large sized All steel radial OTR Tires by investing in new capacity of 5,000 MT p.a. Additionally building Warehouse and Mixing Plant at Bhuj in Gujarat. Total capex of up to Rs. 500 crores.

Board of Directors have declared an Interim Dividend of Rs. 3 per equity share

Financial

ROE and ROCE is around 17% and 17% respectively and book value per share is around INR 260 and share is currently trading at 5.3x of its book value. Company is currently trading at annualized PE of around 33 which is fair as per Industry benchmark. Promoter holding in the company is around 58.3% which is strong and stable. FIIs and mutual fund hold around 13% and 17.6% respectively which is increased by FIIs in this quarter by 1%. Cash and Cash equivalents of Rs. 1,086 Cr as of June 2020. 

Position: Share strong support price is INR 1310/1240. Long term investor should continue with the company and any correction will give good opportunity to enter in SIP basis in long term.

Share View: Share price high 1,396 (52 week) and now 1,384. BIL mainly manufactures OHTs that are used in vehicles meant for agricultural, industrial, construction, and earth-moving purposes. Achievable capacity of its plant in Waluj is 40,000 tonne per annum (tpa), and in Bhiwadi and Chopanki (both in Rajasthan) 60,000 tpa each. Capacity of 140,000 tpa added in Bhuj was commissioned in fiscal 2016. The company has a wide product profile and sells in more than 130 countries

Opportunities

BKT is India’s Leading player in the Global ‘Off Highway Tire (OHT)’ Market. The demand is strong in Agriculture segment across Geographies and potential of this segment as well as the brand positioning of BKT in end markets which is continuously helping to gain market share. The Non-Agriculture segment is moving slow, on-account of low commodity prices and end user demand however company expect gradual uptick as economic activity increases across the globe. Manufacturing OHT is a labour-intensive process and the company benefits from presence in low-cost locations leading to strong operating efficiency. As employee cost is lower than that of most global peers, BIL's products are more competitively priced. Market share in the international OHT segment has increased steadily over the years to 5-6% currently, backed by association with major global original equipment manufacturers. Achievable capacities of 300,000 M.T.P.A. Capacity expansions is also on track. Diversified Product Portfolio, spread across Agriculture, Industrial, Construction and mining tires. Cash accrual is sufficient, capital structure strong, and debt protection metrics adequate. Healthy profitability and low interest cost will, likely, keep the metrics stable over the medium term. The company has repaid its long term debt and virtually debt free. 

Risk

Prices of key raw material, natural and synthetic rubber (raw materials account for 65% of BIL's aggregate production cost), tend to be volatile as they depend on global demand, area under cultivation, and crude oil prices. Consequently, profitability is volatile too. Around 75% of the raw material is imported so exposing BIL to the risk of sharp fluctuations in forex rate. Topline growth in last 5 year was single digit and less than 5%. 

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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HeroMoto - Result Analysis Q1 FY21

HeroMoto - Result Analysis Q1 FY21

CMP: 2,792 (As on 14-082020)

Total income from operations 2,969 Cr 

8,186 Cr (-63.71%) YoY | 6,334 Cr (-53.18%) QoQ 

Year ending revenue: 29,235 Cr Vs. 33,971 Cr (-13.91%)

Net Profit of 57.8 Cr 

1,257 Cr (-95.41%) YoY 614 Cr (-90.73%) QoQ 

Year ending Net profit: 3,659 Cr Vs. 3,444 Cr (6.24%)

EPS (in Rs.) 2.96

62.92 YoY | 30.27 QoQ 

Year ending EPS: 182.15 Vs. 172.42

View: Result is line with the expectation. YoY and QoQ revenue declined and profit significantly down in YoY and QoQ as the quarter was impacted by lockdown for most parts of the three months' period.

Business Updates & Highlights:

Q1FY21 standalone EBITDA was around INR 108 Cr Vs. 1,173 Cr in Q1FY20 Vs. 686 Cr in Q4FY20 therefore declined by 90.8% in YoY and 84.2% in QoQ. EBITDA margin in Q1FY21 was 3.6% Vs. 14.3% in Q1FY20 Vs. 10.8% in Q4FY20. 

Hero MotoCorp sold a total of 5.65 Lacs units of motorcycles and scooters in the first quarter of Financial Year (April-June) 2020-21. 

Market share for the Q1'21 at 34.6%, a gain of 333 bps on YoY basis.

Financial

ROE and ROCE is around 22% and 27% respectively and book value per share is around INR 721 and share is currently trading at 3.9x of its book value. Company is currently trading at annualized PE of around 21 which is fair as per Industry benchmark. Promoter holding in the company is around 34.8% which is low and marginally increased in this quarter. FIIs, mutual fund and insurance cos hold around 32.7%, 8% and 9.3% respectively. 

Position: Share strong support price is INR 2,640. Long term investor should continue with the company.

Share View: Share price high 3,021 (52 week) and now 2,811. Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two – wheelers, based in India. In 2001, the Company achieved the coveted position of being the largest two-wheeler manufacturing Company in India and also, the ‘World No.1’ two-wheeler Company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till date.

Opportunities

Hero MotoCorp Limited (HMCL) as evidenced by its market leadership in the domestic two-wheeler industry with an overall market share of 35.7% and 52% market share in the motorcycle segment, its strong product portfolio. July month sales were more than 95% of Pre-Covid sales and company also see positive trend moving forward as Rural economy is on track and company has strongly come back. Hero MotoCorp commenced the dispatches of its much-awaited motorcycle - the Hero Xtreme 160R. The Xtreme 160R further strengthens Hero MotoCorp's presence in the premium motorcycle segment. Hero MotoCorp launched an integrated online sales platform - eSHOP. The website enables a seamless buying experience for the customers - completely digital. 

The company is expected to utilise internal accruals for a proposed capex of Rs. 550-600 crore in FY2021 and incur incremental strategic investments (predominantly in Ather Energy Private Limited, or Ather, and Hero FinCorp Limited, or HFCL), the management’s prudent track record provides comfort. To diversify its product mix and reduce its dependence on the entry (75-110cc) and executive (110-125cc) segments of motorcycle and rural markets, the company has taken several initiatives. These include investments towards launching products in the premium motorcycle segment as well as scooter segment, which have a more urban clientele. Over the past two years, HMCL has launched four products from its ‘X series’ motorcycles in the 150-200cc displacement category and two products in 125cc scooter segment. Successful ramp-up of these new products could help consolidate HMCL’s market position and diversify revenue streams. Company will continue to maintain its leadership position in the Indian two-wheeler industry aided by its strong product portfolio and established brands, regular investments in new model launches, and extensive dealership network. HMCL is a market leader in the motorcycle segment with a 52% share of the domestic market in FY2020. Company is virtually debt free. 

Risk

The Indian two-wheeler industry is highly competitive with regular new product launches and refreshes by OEMs to gain market share. The company is significantly dependent on the domestic market, which accounted for 97% of total volumes dispatched in FY2020. HMCL’s share in total two-wheeler exports from India in FY2020 was muted at 5.1%. Also, most of its products in the entry and executive sub-segments of motorcycles have direct correlation with rural and semi-urban demand sentiments. A steep decline in sales volumes beyond FY2021 due to a prolonged impact of the ongoing pandemic leading to sharp contraction in profitability metrics or significant erosion in market share on a sustained basis amid increasing competition.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Rites - Result Analysis Q1 FY21

Rites - Result Analysis Q1 FY21

CMP: 249 (As on 13-08-2020)

Revenue from operations 335.4 Crs 

537.6 Cr (-37.61%) YoY | 570.7 Cr (-41.28%) QoQ 

Year ending revenue: 2,474 Cr Vs. 2,047 Cr (20.89%)

Net Profit of 64.99 Cr 

102.08 Cr (-36.29%) YoY 143.9 Cr (-54.53%) QoQ 

Year ending Net profit: 633.2 Cr Vs. 470 Cr (34.64%)

EPS (in Rs.) 2.51

3.92 YoY | 5.56 QoQ 

Year ending EPS: 24.64 Vs. 18.78

View: Result is line with the expectation. YoY and QoQ revenue declined due to Less exports scheduled for Q1FY21 (approx impact of INR 128 crore) and profit also declined. 

Business Updates & Highlights

EBITDA in Q1FY21 was around INR 104 Cr Vs. 167 Cr in Q1FY20 therefore declined by 37.7% in YoY. EBITDA margin in Q1FY21 was around 27.4% Vs. 29.1% in YoY. Sustained margins due to cost reduction measures, despite reduction in revenues.

Employee cost, which is 41.3% of total cost in Q1FY21, was reduced by 9.5% 

Company is primarily into four operating segment viz. consultancy – 57.1%, lease –7.4%, Exports -0.3% and Turnkey – 35.2% .

YoY topline growth for consultancy was (20.7%), lease – (19.5%), Exports – (99.6%) and Turnkey – (11.3%). Consultancy and Turnkey Revenues were impacted due to lockdown, supply chain disruptions and travel restrictions. Less exports were scheduled for Q1FY21. Exports are scheduled for H2FY21. Leasing business affected due to stalled works at certain sites, ports etc. during lockdown

YoY bottom line growth for consultancy was (10.2%), Leasing – (44.1%), Exports – (113.3%) and Turnkey – 41%. Profit margins in consultancy was 39.1%, leasing – 44.4%, Exports – 19.9% and Turnkey – 2.8%. Leasing margins got impacted due to depreciation on locomotives. 

Subsidiary REMCL: Revenue in Q1FY21 was INR 20 Cr VS. 15 Cr in YoY, EBITDA in Q1FY21 was around INR 15 Cr Vs. 9 Cr in YoY. Consultancy revenue got impacted due to less traction power requirement by Railways. Power generation through wind mill continued and resulted in growth of 51.7% over Q1FY20

Order book as of June 2020 was around INR 6,157 Cr which includes Consultancy – INR 2,528 Cr, Exports – INR 1,429 Cr, lease – INR 112 Cr, Turnkey – INR 2018 Cr and REMCL – INR 70 Cr.

Project Updates

RITES secured more than 60 projects/contracts including enhanced scope during Q1FY21.

Signed 5 year MOU with Coal India for providing Rail Infrastructure services

Financial

ROE and ROCE is around 20% and 32% respectively and book value per share is around INR 105 and share is currently trading at 2.4x of its book value. Company is currently trading at annualized PE of around 17 which is average as per Industry benchmark. Promoter holding in the company is around 72% which is very good and stable. FIIs and mutual fund hold around 1.5% and 5.3% respectively. FIIs has sold around 1.4% stake in QoQ and mutual fund slightly increased their stake in QoQ

Position: Share strong support price is INR 238/220. Long term investor should continue with the company and any correction till 220/200 will give opportunity to add for target price of INR 300/400. 

Share View: Share price high 331 (52 week) and now 250 RITES Limited is an engineering consultancy company, specializing in the field of transport infrastructure. Established in 1974 by the Government of India, company, is a multi-disciplinary consultancy organization in the fields of transport, infrastructure and related technologies.

Opportunities

Strong diversified order book which is more than 6K Crores. Strategic focus on international projects, exports and domestic mega projects including NIP. Focus on execution of orders while maintaining margins despite Covid-19 outbreak company has able to maintain bottom line along with margins. Moderate revenue growth expected for FY21 with positive long-term business outlook. Experts in Engineering, Science, Finance, Economics etc. with a mix of regular, deputationists and contract employees. Debt free company and given good dividend to their shareholders which was around 4% of CMP and also given bonus also in previous year. 

Risk

Covid -19 pandemic and due to less spending may impact the earnings and profits for H1FY21. Certain order inflows shifted by few quarters. Export business drastically impacted and almost negligible in this quarter and this can continued till Q2FY21 as well. 

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Ashok Leyland - Result Analysis Q1 FY21

Ashok Leyland - Result Analysis Q1 FY21

CMP: 61.75 (As on 13-08-2020)

Revenue from operations 1,486 Crs 

6,588 Cr (-77.42%) YoY | 5,088 Cr (-70.78%) QoQ 

Year ending revenue: 21,951 Cr Vs. 33,197 Cr (-33.86%)

Net Profit of (388.82) Cr 

274.9 Cr (-241.31%) YoY 57.8 Cr (-780.13%) QoQ 

Year ending Net profit: 460 Cr Vs. 2,079 Cr (-77.84%)

EPS (in Rs.) (1.39)

0.84 YoY | 0.06 QoQ 

Year ending EPS: 1.15 Vs. 7.08

View: Result is declined and below expectation. YoY and QoQ revenue significantly down and company also posted heavy losses in this quarter. EBITDA losses also in this quarter. Automobile sector which was already facing Economic stress now Covid-19 impact is giving double Whammy now. 

Business Updates & Highlights:

EBITDA in Q1FY21 was around INR 121.3 Cr Vs. 1,232.4 Cr in Q1FY20 Vs. 705 Cr in Q4FY20 therefore declined by 90% in YoY and 82% in QoQ. EBITDA margin in Q1FY21 was around 8.1% Vs. 18.7% in YoY Vs. 13.8% in QoQ. 

Financial

ROE and ROCE is around 25% and 17% respectively and book value per share is around INR 26 and share is currently trading at 2x of its book value. Promoter holding in the company is around 51.5% which is strong and stable. FIIs and mutual fund hold around 15.6% and 8.6% respectively which was declined by more than 1% by both mutual fund and FIIs. 

Position: Share strong support price is INR 45. Long term investor based on their risk appetite can continue with the company. 

Share View: Share price high 88 (52 week) and now 52. Company is one of India's major manufacturers of commercial vehicles, rolling out multi-axle trucks and tractor trailers, as well as light trucks and buses, emergency, and military vehicles. Ashok Leyland touts its 18- to 82-seater double-decker buses, popular for moving India's metro public.

Opportunities

During the quarter the Company successfully introduced its AVTR Range of Modular Vehicles in the Heavy Commercial Vehicle segment as also a completely differentiated Intermediate Commercial Vehicle range of vehicles. The BS VI “MidNox” technology of the Company provides superior “Fluid Efficiency”. Both the AVTR range and “Mid-Nox” have been received very well by customers. With virtually no operations or revenues in the first part of this quarter owing to the lock down, the demand is seen to be gradually opening up as the lock down is being eased. Being part of the Hinduja Group, ALL’s long track record of operations with strong brand image & wide distribution network with pan-India presence, its presence in all sub-segments of the CV (Commercial Vehicles) segment with strong market position in the domestic M&HCV (Medium & Heavy Commercial Vehicles) segment, improving market share of LCV (Light Commercial Vehicles) segment and continuation of comfortable leverage levels. Over the years, ALL has become a synonymous name in the bus segment, wherein it is one of the market leaders with vehicles ranging from 19 to 80 seats. 

Risk

In the backdrop of coronavirus pandemic led economic slowdown and resultant impact on the financial performance of the company in FY21. Amid the stressed ecosystem, recovery in demand for CV industry could take longer than expected in turn resulting in moderation in profits for ALL. Continuation of negative growth in the sales volume beyond Q2FY21. Deterioration of capital structure on a sustained basis. Due to various factors including slowdown in GDP growth on account of impact of COVID-19, transition from BS 4 to BS 6 and expected increase in prices of BS 6 models, sales volume growth for the industry is expected to remain subdued in FY21.

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Century Plywood - Result Analysis Q1 FY21

Century Plywood - Result Analysis Q1 FY21

CMP: 134 (As on 13-08-2020)

Revenue from operations 203 Crs 

582 Cr (-65.1%) YoY | 530 Cr (-61.68%) QoQ 

Year ending revenue: 2,317 Cr Vs. 2,280 Cr (-1.61%)

Net Profit of (11.79) Cr 

39.91 Cr (-129.61%) YoY 36.27 Cr (-132.13%) QoQ 

Year ending Net profit: 125.2 Cr Vs. 148 Cr (-15.54%)

EPS (in Rs.) (0.51)

1.81 YoY | 1.67 QoQ 

Year ending EPS: 6.78 Vs. 6.67

View: Result is below expectation and declined. YoY and QoQ significantly revenue down and company has also posted losses in this quarter due to disruption of their business in Whole month of April and partially in May 2020. 

Business Updates & Highlights:

EBITDA in Q1FY21 was around INR 5.45 Cr Vs. 93.77 Cr in Q1FY20 Vs. 70.18 Cr in Q4FY20 therefore declined by 94.2% in YoY and 92.2% in QoQ. EBITDA margin in Q1FY21 was around 2.7% Vs. 16.3% in YoY Vs. 13.4% in QoQ. 

Plywood cover around 50% of topline. Plywood sales is declined by 67.9% in YoY and 64.3% in QoQ. Decorative plywood sales is declined by 69.1% in YoY and 64.5% in QoQ. Commercial Veneer sales is declined by 82.1% in YoY and 74% in QoQ. EBITDA in plywood business declined by 115% in YoY and 130.7% in QoQ.

Laminates verticle cover around 20% of topline. Lamintes Sales is declined by 62.8% in YoY and 62.2% in QoQ. EBITDA in laminates business declined by 84.5% in YoY and 89.9% in QoQ.

MDF business cover around 15% of their topline. MDF sales is declined by 70.2% in YoY and 67.2% in QoQ. EBITDA in MDF business declined by 89.8% in YoY and 88.8% in QoQ.

Financial

ROE and ROCE is around 16% and 17% respectively and book value per share is around INR 49 and share is currently trading at 2.7x of its book value. Company is currently trading at annualized PE of around 33 (forward PE) which is high as per Industry benchmark. Promoter holding in the company is around 73% which is very strong and stable. FIIs and mutual fund hold around 6.4% and 6.7% respectively. Net operating cash flow as of June 20 was around INR 26 Cr Vs. 212 Cr in March 2020. 

Position: Share strong support price is INR 110. Long term investor may continue with the company. 

Share View: Share price high 181 (52 week) and now 130. Century Plyboards Ltd. is an Indian manufacturer, seller and exporter of plywoods and veneers. The company offers plywood products under the brand name, Century Ply, and exports its range of products to over 20 countries.

Opportunities

CenturyPly enjoys a unique brand identity as the market leader, with offerings that are considered industry benchmarks. CenturyPly is the unprecedented choice of architects and interior designers from flexible plywoods that offer a unique blend of form and functionality to specially treated, Fire Retardant plywoods that find use in a myriad of construction purposes. Company is looking future with optimism. July, 2020 revenue was almost 75% of July 2019 revenue. Collection from Debtors is normalising and Debt level is again coming down. Loss caused by Amphan at Kolkata factory is fully covered with insurance. Company is also spending on advertisement of its newly added feature of VIROKILL technology in Plywood and Laminates. This technology kills all viruses on the surface of plywood & laminates and is well taken by consumers. Company is continuing to invest in balancing equipment and innovations wherever possible. 

Risk

Significantly disrupted in this quarter for all the business vertical due to completely washed out for the month of April and Partial in May as well. Still company has not optimized the 100% Capacity and Q2 will also be challengeable. Till March 2020 company was reducing their debt but now in this quarter company has again increased their debt and new CC limit also taken for the time being and debt/equity ratio increased from 0.18 to 0.23 now. Delayed payment by customer and increased the debtor collection period from 30 to 60 days now and average collection around 100 days (significantly increased) and company has also delayed the payment of their vendors. ROCE was also negative in this quarter. 

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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Key Result Highlights Q1 FY21

Key Result Highlights Q1 FY21

M&M ltd. Standalone Q1FY21: Revenue came at Rs 5,602 crore vs estimate of Rs 5,472 crore, declined by 57% YoY. (Rs 12,922 crore in Q1FY20). Net profit came at Rs 112 crore vs estimate of Rs 214 crore, declined by 95% YoY. (Rs 2,313.8 crore in Q1FY20)

Cipla Ltd. Q1 Cons: Net profit up 20.9% at Rs. 577.91 cr. Vs Rs. 478.19 cr. (YoY) and Revenue up 9% at Rs. 4346.16 cr. Vs Rs. 3989.02 cr. (YoY)

Siemens Ltd. Q1 Cons: Net loss at Rs. -1.9 cr. Vs profit of Rs. 250.1 cr. (YoY) and Revenue down -58.5% at Rs. 1334.6 cr. Vs Rs. 3216.1 cr. (YoY)

Abbott India Ltd. Q1 : Net profit up 54.2% at Rs. 180.35 cr. Vs Rs. 116.94 cr. (YoY) and Revenue up 6.5% at Rs. 1064.27 cr. Vs Rs. 998.89 cr. (YoY)

Alkem Laboratories Q1FY21 (consol): Revenues higher by 8% yoy but lower 2% qoq at Rs 20,035 cr led by international sales. Net profit (after minority interest) was higher 128% yoy/124% qoq at Rs 422 cr

Adani Transmission Ltd. Q1 Cons: Net profit up 79.7% at Rs. 383.55 cr. Vs Rs. 213.42 cr. (YoY) and Revenue down -14.4% at Rs. 2446.51 cr. Vs Rs. 2858.08 cr. (YoY)

Container Corporation Of India Ltd. Q1 Cons: Net profit down -75.2% at Rs. 60.61 cr. Vs Rs. 244.01 cr. (YoY) and Revenue down -27.8% at Rs. 1194.2 cr. Vs Rs. 1654.76 cr. (YoY)

REC Ltd. Q1 Cons: Net profit up 22.3% at Rs. 1845.3 cr. Vs Rs. 1509 cr. (YoY) and Revenue up 23.9% at Rs. 8446.65 cr. Vs Rs. 6815.33 cr. (YoY)

Aditya Birla Capital Ltd. Q1 Cons: Net profit down -26.5% at Rs. 198.38 cr. Vs Rs. 269.85 cr. (YoY) and Revenue up 11.2% at Rs. 4034.55 cr. Vs Rs. 3627.01 cr. (YoY)

Amara Raja Batteries Ltd. Q1 Cons: Net profit down -55.6% at Rs. 62.49 cr. Vs Rs. 140.73 cr. (YoY) and Revenue down -36.6% at Rs. 1151.22 cr. Vs Rs. 1814.95 cr. (YoY)

Emami Ltd. Q1 Cons: Net profit up 0.9% at Rs. 39.6 cr. Vs Rs. 39.26 cr. (YoY) and Revenue down -25.8% at Rs. 481.34 cr. Vs Rs. 648.64 cr. (YoY)

Bata India Ltd Q1FY21 Cons: Net revenue in Q1FY21 stood at Rs.135.0cr, which decreased by 84.7% yoy from Rs2700.4cr in Q1FY20. Net loss in Q1FY21 came in at Rs100.8 cr as compared to Q1FY20 when it reported net profit Rs100.9 cr.

Mahanagar Gas Ltd Q1FY21 Result: Net revenue in Q1FY21 stood at Rs.277.5cr, which decreased by 66.6% yoy from Rs831.2cr in Q1FY20. Net profit in Q1FY21 came in at Rs45.3 cr that decreased by 73%, as compared to Q1FY20 when it reported Rs170.2cr.

Kajaria Ceramics Ltd. Q1 Cons: Net loss at Rs. -27.1 cr. Vs profit of Rs. 51.01 cr. (YoY) and Revenue down -60.3% at Rs. 277.56 cr. Vs Rs. 699.99 cr. (YoY)

Johnson Controls - Hitachi Air Conditioning India Ltd. Q1 : Net loss at Rs. -23.1 cr. Vs profit of Rs. 63.6 cr. (YoY) and Revenue down -71.7% at Rs. 269.5 cr. Vs Rs. 951.9 cr. (YoY)

Finolex Industries Ltd. Q1 Cons: Net profit down -22.5% at Rs. 56.72 cr. Vs Rs. 73.17 cr. (YoY) and Revenue down -40.4% at Rs. 562.07 cr. Vs Rs. 943.81 cr. (YoY)

Amber Enterprises India Ltd. Q1 Cons: Net loss at Rs. -22.44 cr. Vs profit of Rs. 61.21 cr. (YoY) and Revenue down -79% at Rs. 259.45 cr. Vs Rs. 1235.93 cr. (YoY)

Birla Corporation Ltd. Q1 Cons: Net profit down -53.2% at Rs. 65.77 cr. Vs Rs. 140.62 cr. (YoY) and Revenue down -35.1% at Rs. 1221.97 cr. Vs Rs. 1883.81 cr. (YoY)

FDC Ltd. Q1 Cons: Net profit up 63.2% at Rs. 91.72 cr. Vs Rs. 56.21 cr. (YoY) and Revenue down -10.3% at Rs. 308.17 cr. Vs Rs. 343.51 cr. (YoY)

Sudarshan Chemical Industries Ltd. Q1 Cons: Net profit down -57.4% at Rs. 18.19 cr. Vs Rs. 42.7 cr. (YoY) and Revenue down -14.2% at Rs. 352.29 cr. Vs Rs. 410.69 cr. (YoY)

Balrampur Chini Mills Ltd. Q1 Cons: Net profit up 31.7% at Rs. 139.09 cr. Vs Rs. 105.61 cr. (YoY) and Revenue up 50.8% at Rs. 1430.33 cr. Vs Rs. 948.49 cr. (YoY)

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

LUPIN - Result Analysis Q1 FY21

LUPIN - Result Analysis  Q1 FY21

CMP: 958.85 (As on 11-08-2020)

Total income from operations 3,527 Cr 

3,877 Cr (-9.01%) YoY | 3,845 Cr (-8.22%) QoQ 

Year ending revenue: 15,347 Cr Vs. 14,665 Cr (4.67%)

Net Profit of 108.7 Cr 

264.3 Cr (-59.01%) YoY 391.2 Cr (-72.33%) QoQ 

Year ending Net profit: (399.8) Cr Vs. 607 Cr (-165.84%)

EPS (in Rs.) 2.35

6.67 YoY | 8.57 QoQ 

Year ending EPS: (5.95) Vs. 13.40

View: Result is declined and below expectation. YoY and QoQ revenue declined and profit also corrected significantly in YoY and QoQ. 

Business Updates & Highlights

Q1FY21 EBITDA is around INR 488.1 Cr Vs. 746.4 Cr in Q1FY20 Vs. 523.7 Cr in Q4FY20 therefore declined by 52.4% in YoY and 2.9% in QoQ. EBITDA margin in Q1FY21 was 14.7% Vs. 20.0% in Q1FY20 Vs. 13.8% in QoQ therefore EBITDA margin significantly declined in 530 bps in YoY and up by 90 bps in QoQ.

Manufacturing and other expenses - INR 9,58.3 Cr, at 27.6% of sales, compared to INR 1,151.9 Cr in Q4 FY2020 Vs. 1086 Cr in Q1FY20. 

Investment in R&D - INR 357.5 Cr, at 10.3% of sales, compared to INR 344.2 Cr in Q4 FY2020.

Personnel cost - INR 793.6 Cr, at 22.9% of sales, compared to INR 763.5 Cr in Q4 FY2020

Company is primarily operating into four main geographical segments which are as under:

North America

Lupin’s North America sales for Q1 FY2021 were INR 1,216 Cr, compared to sales of INR 1,579.1 Cr during Q4 FY2020, down 21% compared to sales of INR 1,541.2 Cr during Q1 FY2020; accounting for 35% of Lupin’s global sales

India

Lupin’s India formulation sales for Q1 FY2021 were INR 1,285.4 Cr, compared to sales of INR 1,192 Cr during Q4 FY2020 and sales of INR 1,307.7 Cr during Q1 FY2020; accounting for 37% of Lupin’s global sales.

Growth Markets (LATAM and APAC) 

Lupin’s LATAM & APAC regions together form our Growth Markets. Together, Growth Markets had sales of INR 269.9 Cr for Q1 FY2021, compared to sales of INR 280 Cr during Q4 FY2020, down 6% compared to sales of INR 286.4 Cr during Q1 FY2020; accounting for 8% of Lupin’s global sales.

Europe, Middle-East and Africa (EMEA)

Lupin’s EMEA sales for Q1 FY2021 were INR 250 Cr, compared to sales of INR 364.9 Cr during Q4 FY2020, down 4% compared to sales of INR 260.4 Cr during Q1 FY2020; accounting for 7% of Lupin’s global sales.

Global API 

Lupin’s Global API sales for Q1 FY2021 were INR 409 Cr, compared to sales of INR 328.6 Cr during Q4 FY2020 and up 17% compared to sales of INR 348.9 Cr during Q1 FY2020; accounting for 12% of Lupin’s global sales.

The Company filed 4 ANDAs during the quarter and received 4 ANDA approvals from the U.S. FDA. The Company launched 2 products during the quarter in the US market. The Company now has 175 products in the US generics market. Cumulative ANDA filings with the US FDA stood at 434 as of June 30, 2020, with the Company having received 276 approvals to date.

Capital Expenditure for the quarter - INR 179.3 Cr as of June, 2020. 

Financial

ROE and ROCE is around (4%) and 9% respectively and book value per share is around INR 277 and share is currently trading at 3.2x of its book value. Company is currently trading at annualized PE) of around 110 which is very high and expensive as per Industry benchmark. Promoter holding in the company is around 47 which is good and stable. FIIs and mutual fund hold around 21.3% and 11.9% respectively. 

Position: Share strong support price is INR 810/750. Long term investor based on their risk appetite may continue with the company.

Share View: Share price high 955 (52 week) and now 879. Lupin is an innovation-led transnational pharmaceutical company headquartered in Mumbai, India. The Company develops and commercializes a wide range of branded and generic formulations, biotechnology products and APIs in over 100 markets in the U.S., India, South Africa and across Asia Pacific (APAC), Latin America (LATAM), Europe and MiddleEast regions.

Opportunities

The Company enjoys leadership position in the cardiovascular, anti-diabetic, and respiratory segments and has significant presence in the anti-infective, gastro-intestinal (GI), central nervous system (CNS) and women’s health areas. Lupin is the third largest pharmaceutical company in the U.S. by prescriptions. The Company invests 10.3% of its revenues on research and development. Lupin is now the market leader in 62 products in the US generics market and amongst the Top 3 in 126 of its marketed products (market share by prescriptions, IQVIA June 2020). API business growth in this quarter was good and increased by 24.5% in QoQ and 17.2% in YoY.

Risk

Significantly declined EBITDA in QoQ and lower sales also in this quarter. Despite mostly pharmaceuticals player outperform in EBITDA and topline in this quarter Lupin topline and profit was down on YoY and QoQ. India Region Formulation sales declined by 6% compared to Q1 FY2020 which is 37% of Lupin’s sales. Lupin North America business declined by 23% and 21% in YoY and QoQ which is accounted 35% of Lupin’s sales. Total Formulations business declined by 11.6% in YoY and QoQ.

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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