BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
Maruti Suzuki - Market share recovery to drive rerating
Maruti Suzuki India Ltd.'s Q4 profit after tax, at Rs 26.2 billion, came in slightly below our estimate of Rs 27.2 billion, due to a slight miss in Ebitda, and higher depreciation and interest burden.
While margins were in line with our estimate, the Ebitda miss was due to a lower-than-expected average average selling price. In the recent past, the stock has underperformed on concerns of whether Maruti Suzuki would be able to recover lost share in utility vehicles, given heightened competition.
Bajaj Finance - Yet another strong quarter but tailwinds receding
Bajaj Finance Ltd. delivered yet another strong operating performance with return on asset at over 5% and earnings growth of 30% YoY, despite a rising interest rate environment. Asset quality improved further, with gross stage-II/GS-III at 1.2%/0.9% (FY22: 2%/1.6%), normalised credit costs, and all businesses tagged green.
With most digital initiatives having already gone live (and the rest expected by H1 FY24), Bajaj Finance is poised to deliver steady loan growth consistent with its Long Range Strategy (25-30% assets under management/profit after tax compound annual growth rate during 2022-2027), driven by robust customer acquisition, mining of the existing customer franchise and the addition of new loan products.
SBI Life Insurance - Impressive end to FY23; FY24 looks challenging
SBI Life Insurance Company Ltd.'s adjusted value of new business came in 4% above estimates at Rs 15 billion (up 35% YoY), as VNB margin expanded 630 bps QoQ to 32.9% on the back of a higher share of non-par savings in the mix (Q4 FY23: 23%).
While the management remains upbeat about achieving a 20-25%YoY annual premium equivalent growth in FY24E, we continue to watch out for sensitivity to insurance sales from the removal of tax incentives in the new tax regime and tax exemption in non-par savings with ticket size more than Rs 0.5 million.
L&T Technology Services - In-line Q4; near-term upside capped
L&T Technology Services Ltd. delivered nearly in-line Q4 performance but modest revenue guidance for FY24E (more than 10% organic), following 15.8% growth in FY23. From the peak Ebitm of 18.5% in FY23, margins will moderate to 17% and 17.5% in FY24/25E due to the consolidation of Smart World and Communication acquisition and business mix (higher growth in the transportation vertical ahead, supported by recent large wins).
Dalmia Bharat - Strong volume; cost-led margin miss
We continue to like Dalmia Bharat Ltd. for its robust volume and margin outlook. Dalmia reported strong volume growth (up 13/19% YoY/QoQ). Weak pricing in the south and a high inventory adjustment impact in Q4 led to a unitary Ebitda fall of 7% QoQ to Rs 945 per million tonne. Dalmia Bharat expects a major fall in fuel costs in H1 FY24.
Nippon Life India Asset - Near-term headwinds persist
Nippon Life Asset Management Ltd. clocked a 1.5/2.4% sequential dip in revenue/core operating profits on the back of muted AUM growth, alongside marginal yield compression. We draw comfort from the improvement (up 44 bps QoQ) in SIP market share (7.7%) and argue this is key for long-term franchise strength and sustainability.
Mahindra Lifespaces - Strong launch pipeline to drive further rerating
Mahindra Lifespaces Developers Ltd. reported the highest ever annual presales of Rs 18.1 billion (+77% YoY), with volume at 2.2 million square feet (+73% YoY). This was backed by robust launches of 3.19 msf (+51% YoY). For FY24, nine project launches are planned with Kandivali, Bengaluru, one society redevelopment and Citadel Phase II as key launches.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
