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HDFC Securities Institutional Equities
Titan Company Ltd. - Profitability disappoints
Topline print was marginally better than expected at 15.7% YoY (Rs 116 billion versus our estimate: Rs 114 billion). The jewelry segment grew 15.3% (three-year compound annual growth rate: 23%) in Q3 FY23 as both the number of buyers and ticket sizes aided growth. Non jewelry segments continue to normalise from the pandemic blues too (three-year CAGR: 7-9%). However, overall profitability disappointed. Jewelry Ebitm at 11.9% (versus our estimate: 12.5%) declined 232 bps YoY as competitive intensity continues to heighten; benefits from high diamond prices wore off. Non jewelry profitability disappointed too.
Dabur India Ltd. - Rural weakness continues; expect margin recovery
Dabur India delivered consolidated revenue/domestic volume growth of 3/-3% YoY versus expectation of 4.7%/flat. The domestic business grew by 3.3% while international posted 5% growth (14% constant currency growth). Dabur's healthcare/home and personal care/food and beverage grew +3/+2/+6% YoY, with the three-year CAGR at +8/+9/+15%. Delayed winter impacted the healthcare and skincare portfolios; partial recovery is expected in Q4 FY23.
Britannia Industries Ltd. - In-line revenue, beat in margin
Britannia delivered revenue growth of 16% (our estimate 18%), clocking 12% three year CAGR. Price hikes continued to support revenue growth since volume growth was low single digit. The packaged food category has been sustaining volume growth despite a steep price hike during the last nine months (ITC Ltd. and Nestle India Ltd. also delivered similar trends).
Ashok Leyland Ltd. - CV growth rate likely to normalise from here on
Ashok Leyland's Q3 profit after tax, at Rs 3.6 billion, was ahead of our estimate, led by better-than-expected operational performance. Margin improved 230 bps QoQ to 8.8% and was driven by higher average selling price, lower input costs, and operating leverage benefits. The competitive intensity in commercial vehicles continues to be high despite a demand revival, and the same is visible in record-high discounts in FY23.
Power Grid Corporation of India Ltd. - Projects in hand at Rs 476 Billion
PGCIL's consolidated asset capitalisation/capex in Q3 FY23 declined 60.7%/36.7% YoY to Rs 20.6 billion/Rs 22.1 billion, due to low execution and high YoY base. In nine months-FY23, capitalisation/capex came in at Rs 51.9 billion/Rs 54.3 billion versus Rs 185 billion/Rs 72 billion YoY. Q3 FY23 revenue increased 7.5% YoY, led by moderate growth in the transmission (up 7.3% YoY) and consultancy (up 0.1% YoY) and telecom (up 13.2% YoY) segments. While Ebitda grew 8% YoY, profit after tax was up 10.5% YoY to Rs 37 billion, led by the reversal of deferred taxes.
Godrej Properties Ltd. - Strong project addition augurs well for growth
Godrej Properties reported the highest-ever quarterly presales of 4.4 million square feet (+99%/+63%, YoY/QoQ), valued at Rs 32.5 billion (+111%/+35% YoY/QoQ), beating our estimate of Rs 25 billion. We expect Godrej Properties to surpass the Rs 100 billion of presales comfortably on the back of 12 msf of launch pipeline. In the quarter, Godrej Properties added new projects in Mumbai metropolitan region, National capital region and Pune, with Rs 230 billion (gross development value) sales potential, which is the highest ever for any quarter.
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