July 02, 2021

JULY 02, 2021 Bharti Group to invest USD500mn in OneWeb Tech Mahindra announces partnership with TAC Security Cipla on Moderna vaccine says, "no definitive agreement on commercial supplies" AstraZeneca Pharma files writ petition before Delhi HC challenging NPPA demand notice for Tagrisso tablets Bharat Forge buys 100% stake of Sanghvi Forging and Engineering CCI approves Adani Green's 100% buy of SB Energy Holding L&T-led construction arm secures major contracts Unichem Lab receives USFDA approval for Aripiprazole Tablets Airtel deploys additional 21.6 Mhz spectrum to deliver the best network experience for customers in Bengal Sterlite Tech completes PoC for pFTTx stack with Chunghwa Telecom’s open broadband network Tata Motors bags order of 15 hydrogen-based fuel cell buses from IOCL 5 pharma majors collaborate for clinical trial of Molnupiravir for Covid-19 Reliance Infrastructure Ltd in talks with Singapore's Cube Highways for sale of four road assets Jindal Steel and Power to invest Rs7,500cr, set up steel plant in Andhra Pradesh J&J's Covid-19 vaccine shows promise against Delta variant India's current account surplus at 0.9% of GDP in FY21 as trade deficit witness sharp contraction India PMI contracts for first time in 11 months amid Covid-19 crisis; June Manufacturing PMI at 48.1 Fiscal deficit at Rs1.23 lakh-cr for FY22 in April-May FMCG companies focus on last-mile deliveries as local curbs return Passenger vehicle sales nearly double in June driven by pent-up demand Banks' gross NPAs may rise to 9.8% by March 2022: RBI report Alembic Pharmaceuticals Ltd The company has received USFDA final approval for Nitrofurantoin Capsules, USP (Macrocrystals), 25/50/100mg. According to IQVIA, the drug has an estimated market size of USD23mn for twelve months ended March, 2021. Sterlite Technologies Ltd: Sterlite has successfully completed a proof-of-concept (PoC) for its programmable FTTx (pFTTx) software solutions with Chunghwa Telecom’s (largest integrated telecommunication service provider in Taiwan) open broadband access network. The implementation of PoC would enable in building and scaling open, disaggregated wired access networks, that will be critical in delivering 5G use cases to millions of customers. HFCL Ltd: HFCL Ltd has incorporated a wholly-owned subsidiary company namely, HFCL Technologies Private Limited by subscribing 10 lacs shares of Rs10/- each. HFCL Technologies Private Limited proposes to deal in various electronics and telecommunication equipment. Vimta Labs Ltd: The company has entered into a long term Public Private Partnership (PPP) with FSSAI in order to setup, operate and transfer, the National Food Laboratory at JNPT; primarily meant to cater to test samples of food imports. This setup is expected to be completed by December, 2021 and would be operational in Q4FY22. Acrysil Ltd: The company has announced expansion of production capacity of Quartz Kitchen Sinks from 700,000 units p.a. to 840,000 units p.a. i.e. an additional capacity of 140,000 units p.a. (20% of its existing production capacity) at its Bhavnagar plant in Gujarat. The project is likely to be completed by Q3FY22 and will be financed by mix of internal accruals and debt. The Week That Went By: Indian markets kicked off the week on record levels but failed to hold higher levels and erased all its gains. By continuing weak momentum, Nifty50 extended its losses for most of the week; however, on the last day of the week, frontline stocks and selected pharma counters came to the rescue. Nifty50=15722.20 BSE Sensex30=52484.67 Nifty Midcap 100=27020.10 Nifty Smallcap100=9903.10 Please Turn Over Page No 1 Result Synopsis Company Result This Week KCP Ltd The net sales for the quarter grew by 60.8% to Rs4091mn as compared to Rs2544mn in the same quarter last year. The CMP: Rs147 EBITDA margins for the quarter stood at 21.6% as against 11.5% in Q4FY20. The company reported profits of Rs489mn as Target: Rs175 against Rs7mn in the same quarter last year. The EPS stands at Rs3.79. On the segmental front, the company has reported growth of 96% in the Engineering segment. The Cement and Power grew by 59% and 89% respectively; whereas the Hotels segment de-grew by 40% for the quarter. The Board has recommended for the approval of the shareholders at the ensuing AGM, a dividend of Rs2 per share on equity share of Rs1 each. Outlook and Recommendations: The company has reported good results for the quarter under reference both at the topline as well as at the operational levels. For full year FY21, the Revenue grew by 38.7% whereas the company reported a profit at Rs1533mn as against a loss of Rs68mn in FY20. Although the base of comparison i.e. FY20 numbers was low, the company is gradually trying to get back on track which is well depicted in its segmental performance. The realizations across the cement and engineering segment have been good with a hit to the hospitality seen in the reportings. The balance sheet has also depicted some strength with debt repayments and enhanced cash balances. Considering the overall macro environment as well as the pandemic related disruptions, the company has performed much better than expectations. The future performance would depend on how things normalize or we have more waves to deal with. However, betting on the working capabilities of the company we maintain our positive stance on the company and revise our target to Rs175 from the earlier Rs105 over a period of 12 months. Remsons Industries Ltd The net sales for the quarter grew by 70% to Rs604mn as compared to Rs355mn in the same quarter last year. The EBITDA CMP: Rs272 margin for the quarter under review stood at 7.6% as compared to 5.0% in the same quarter last year. The company reported Target: Rs250 a net profit of Rs49mn as against Rs8mn in the comparative quarter. This included exceptional income from sale of assets of Rs33mn. Adjusting for that as well the profits have doubled when compared y-o-y. On the sequential comparison however, the profits are lower. The EPS for the quarter came in at Rs8.57 as compared to Rs1.34 in the corresponding quarter last year. The company has recommended dividend of Rs1/- per Equity Share of Rs10/- each (10%) for FY21, subject to approval of the shareholders. Outlook and Recommendations: The company has reported decent numbers for the quarter under reference as well as FY21. There has been a gradual pick up seen in the performance inspite of the lockdowns and general slowdown witnessed in the Auto sector. The Ebitda margins have been maintained, hinting on the cost efficiency measures adopted by the company. Although the profits are inflated due to the exceptional income, operationally the company has been on track. Going forward, one will have to see how the pandemic shapes up and how demand from the Auto sector gets back on track, essential for companies like Remsons. We have achieved our earlier target of Rs200 and would recommend to book 20% profits with a cautious outlook and maintain a Hold for a target of Rs250 over a 12 months horizon. The Hi-Tech Gears Ltd The total revenue for the quarter grew by 54.0% to Rs1,688mn as compared to Rs1,096mn in the same quarter last year. The CMP: Rs290 EBITDA margin for the quarter under review stood at 17.1% as compared to 10.2% in the corresponding quarter of last year. Target: Rs350 The company has reported a net profit of Rs133mn as against a loss of Rs37mn in the comparative quarter. The EPS stands at Rs7.07. With regard to the geographical performance, the key markets of India and Canada have clocked 54% and 78% growth y-o-y. The Board of Directors have recommended a final dividend of Rs2 per equity shares of Rs10 each, subject to the approval of the shareholders. Outlook and Recommendations: There has been a gradual comeback seen in the performance of the company with a decent wrap to the year as well. In the quarter under reference, the base of Mar-20 was low which has led to better numbers, but operationally the company has performed well. Growth across the key markets continues. And this is considering the fact that lockdowns and pandemic disruptions did play a key drag on business. There was some pick up seen in the Auto sector, but with the second wave, all of it went back to square one. Now with the anticipation of the third wave there is uncertainty around the future demand and supply scenario. All of it depends on how the Auto sector pans out for companies like Hitech Gears. Although we continue to be positive on the operational capabilities of the company, there is some cautious approach warranted. We have achieved our earlier target of Rs200 and would maintain a Buy on the stock for a target of Rs350 over a 12 months horizon. Grauer & Weil (I) Ltd The net revenue for the quarter under review grew by 39.8% to Rs2436mn as compared to Rs1743mn in the same quarter CMP: Rs66 last year. The EBITDA margins for the quarter under review stood at 16.38% as compared to 15.74% in the same quarter last Target: Rs75 year. The net profit came in at Rs298mn as against Rs220mn in the comparative quarter. EPS for the quarter under review stood at Rs1.32 as compared to Rs0.97 in the corresponding period last year. For the full year, the company has reported a degrowth in turnover by 2% with revenues earned at Rs6048mn for FY21 as compared to Rs6172mn in FY20; while recording a net profit of Rs696mn in FY21 as compared to Rs758mn in FY20.

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