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Earnings Report update: HUL, Bajaj Corp, Infosys, DCB Bank
Publish Date: 18th July, 2018
1) Hindustan Unilever (HUVR)
Earnings snapshot:
Profit after tax (PAT) Growth (yoy) Net revenue Growth (yoy) Rs 15.67 billion 21% Rs 94.87 billion 11% *1QFY2019 data
- - Volume growth: 12% yoy (domestic)
- - Home care revenues grew 20% yoy; personal care revenues grew 11% yoy; food and refreshments revenue grew 14%
Research view: Reduce
- - Our EPS forecast is 4-5% higher than earlier: Rs 29.3 billion in FY2019E, Rs 33.2 billion in FY2020E, Rs 37.4 in FY2021E.
- - We believe the EBITDA will increase by 23% in FY2019E
- - Strong earnings expected to continue for next few quarters
- - Target price: Rs 1,570
- - Coverage view: Cautious
2) Bajaj Corp
Earnings snapshot:
Profit after tax Decline (yoy) Revenue Growth (yoy) Rs 538 million -2% Rs 2.15 billion 9% *1QFY2019 data
- - EBITDA: 15% yoy growth
- - Volume growth: Hair oil segment grew 2.6% yoy
- - Rural demand: LHO category expanded 11.9% yoy in volume
- - International business: Down by 94% yoy
Research view: Add
- - The headline data is disappointing, but hopeful about its core product (especially Bajaj Almond Drops Hair Oil) and new product launches
- - EPS forecasts down 5-8% for FY2019-20E
- - Target price: Revised to Rs 420
- - Coverage view: Cautious
3) Infosys
Earnings snapshot:
Net profit Revenue growth
(c/c)EBIT 3.7% 6% 23.7% (-100 bps) *1QFY2019 data
- - Financial services: Declined by 0.2% qoq
- - High TCV renewals and fresh deals
- - Increased investment general and admin (G&A) expenses increased
- - Revenue decline in America and Europe. Europe market likely to improve
- - Attrition rose by 23%
- - Wage hike to 85% workers this quarter
- - FSI vertical contributes more than 56% of India revenues
Research view: Add
- - Current quarter results are mixed
- - We expect a turnaround in fortunes
- - We estimate a 2.3% increase in EPS between FY2019-21E
- - Stock valuation is inexpensive
- - Target price: Rs 1,400
- - Coverage view: Cautious
4) DCB Bank
- - A 7% yoy increase in earnings
- - Net interest income (NII): 17% yoy growth
- - Net interest margin fell by 15 basis points qoq to around 3.7%, mainly due to rise in cost of funds
- - Loan growth of 31% yoy; loan against property (LAP) growth fell to 19%
- - Credit cost fell by 6% yoy, partly due to lower slippages
- - Gross non-performing loan (GNPL) ratio up to 19%
- - Current account and savings account (CASA) ratio was up to 25% in 1QFY2019
- - Cost-to-income ratio has increased due to opening of several branches
Research view: Add
- - We expect NIM to drop by 50 basis points from FY2018-21E
- - We believe the company’s loan growth will be above industry average at around 24.4% CAGR between FY2018-21E
- - We estimate a 24% CAGR growth in CASA ratio between FY2018-21E
- - Cost-income ratio will improve going ahead
- - We believe the earnings will improve too at 25% CAGR by FY2021E
- - Target price: Rs 205
- - Coverage view: Attractive
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