Author - Pratik Talvatkar

Increased rubber prices not sustainable – CEAT

Update on the Indian Equity Market:

On Tuesday, NIFTY ended lower at 16,983 (-0.4%). Among the sectoral indices, CONSUMER DURABLES (+2.2%), REALTY (+0.6%), and IT (+0.5%) ended higher, whereas METAL (-1.9%), AUTO (-0.9%), and PRIVATE BANK (-0.7%) led the losers. Among the stocks, POWERGRID (+3.1%), SHREECEM (+3.0%), and BAJAJFINSV (+2.0%) led the gainers while TATASTEEL (-4.0%), KOTAKBANK (-3.1%), and JSWSTEEL (-2.7%) led the losers.

Excerpts of an interview with Mr. Kumar Subbiah, CFO at CEAT LTD. with CNBC TV18 on 26th November 2021:

  • The rubber industry is currently struggling with a big demand-supply mismatch and this will impact tyre manufacturers. Approximately 60% of India’s rubber requirement is sourced locally.
  • Availability of natural rubber from local suppliers has been difficult in the last couple of weeks. The quantity of rubber was coming into the market was lower because of heavy rains in Kerala therefore tapping was slightly lower. Another reason was the inventory levels of the traders was also on the lower side.
  • The demand-supply mismatch is a short-term problem, the availability is a major challenge right now. Shortage of 30% to 40% is on a short-term basis.
  • As of now, it doesn’t affect CEAT’s production because they have inventory in the pipeline. But if adequate quantities of rubber are not supplied from the local markets, then the option is to import the natural rubber. If the Government facilitates in terms of concession in import duty, it will help the manufacturers.
  • An import of natural rubber needs to be planned because in the current situation it takes a little longer time for vessels to come from Southeast Asian markets.
  • The rubber prices in the local market as well as in the international market have gone up. It moved up from Rs 170 per kg to Rs 180 per kg due to the demand-supply gap in the local market. The increase in rubber prices will have a negative impact on margins.
  • The company expects the rubber prices will come down shortly and the current prices are not sustainable. The prices will come down closer to import parity levels soon.
  • Demand continuesto be similar to the previous quarter, there are different categories and they performed differently. The company expects some weakness in Truck, Bus and farm tyres to continue. The company expects weakness particularly in two-wheelers and passenger cars segments due to the shortage of chips.
  • In the export segment, CEAT is facing the issue of availability of containers, vessels, and increase in freight costs. It has seen some softness in material prices, but the vessels movement, container availability, continue to be a challenge. Post covid the company saw a positive response from the international markets.

Asset Multiplier Comments

  • The Global lockdowns, higher freight cost and issues of container availability and vessels might be impacting CEAT’s revenue, as out of total sales ~20% of sales come from Exports.
  • Increase in rubber prices are likely to continue in 2HFY22, and this higher input cost may affect margins in short term. The recovery in local rubber market will drive the company’s margin recovery in near term.

Consensus Estimate: (Source: market screener website)

  • The closing price of CEAT LTD. was ₹ 1,165/- as on 30-Nov-2021. It traded at 18x/13x/12x the consensus earnings estimate of ₹ 65/88/98 for FY22E/FY23E/FY24E respectively.
  • The consensus target price of ₹ 1,334/- implies a PE multiple of 14x on FY24E EPS of ₹ 98/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Expect 9-10% credit growth by end of FY22 – State Bank of India

Update on the Indian Equity Market:

On Tuesday, NIFTY closed at 18,044 (+0.1%). AUTO (+1%), OIL and GAS (+0.8%), and PSU BANK (+0.8%) led the sectorial gainers. FINANCIAL SERVICES (-0.7%), FINANCIAL SERVICES 25/50 (-0.6%), and FMCG (-0.3%) were sectoral losers. The top gainers in NIFTY50 were M&M (+5.2%), TATAMOTORS (+2.0%), and HEROMOTOCO (+1.0%). The top losers were BRITANNIA (-3%), HDFC BANK (-2%), and HDFC (-1%).

Excerpts of an interview with Mr. Dinesh Kumar Khara, Chairman, State Bank of India (SBIN) with CNBC-TV18 on 08th November 2021:

  • In two to three broad components the credit growth is seen. One is retail credit, which has grown more than 15% on a YOY basis. Muted growth was seen in corporate credit.
  • SBIN got unavailed limits, both in working capital as well as undisbursed term loans, and both of them aggregate to about Rs 4,500,000 mn. SBI also got the pipeline for the proposals which are being processed of Rs 1,150,000 mn.
  • SBIN expects as capacity utilisation improves, there will be a good credit growth in corporate sector in near term. The numbers are quite good in the month of October for the corporate credit and the bank expects there should be a decent growth will be seen in corporate credit in 2HFY22.
  • SBIN registered a credit growth of more than 6% on YoY. The company’s Retail and International book both performed well, international book growing more than 16% on YoY. But the corporate side is the only one which was pulling down the growth.
  • SBIN expects credit growth to be in the range of 9% to 10% at the end of FY22.
  • SBIN is processing loans of commodity, infrastructure, and FMCG sectors. The commodity sector is expected to reach its full capacity utilization and they are expanding and also the demand was back on track in FMCG sector. As a result of this, SBIN expects good credit growth from these sectors.
  • On NPAs, SBIN does not see any challenges as far as corporate credit is concerned. As far as retail is concerned the quality of retail is quite good. SBIN expects to operate in a range of 3.1% to 3.25% in Net Interest Margins.
  • SBIN witnessed some challenges in end of 1QFY22, but the collection machinery was improved significantly. They started pre-collection calls which means they informing customers well in advance for their EMI due. The customer centricity helped in reducing stress asserts in the retail sector.
  • SBIN has a restructured book of Rs 3,00,000 mn. History suggests about 30% of restructured book has a probability of becoming NPA. The current restructuring has happened essentially on account of the disruption in cash flow due to Covid-19. SBIN has seen an improvement in cash flows.
  • SBIN made the Covid related provisions of Rs 62,000 mn. They have provided well for the potential risk which might emanate from this.
  • SBIN collaborated with many fintech companies when it comes to offering their digital solutions. The Bank is actively engaged in terms of looking at what value addition fintech bring.

Asset Multiplier Comments

  • SBIN has reported a robust performance and has fought off the COVID-19 impact and displayed resilience in asset quality performance. The bank has been reporting continued traction in earnings, led by controlled provisions.
  • The improved credit growth prospects, stable NIMs and improving asset quality with adequate provisioning coverage will help SBIN to achieve its target of delivering 15% ROE through various cycles.

Consensus Estimate (Source: Market screener and TIKR Websites)

 

  • The closing price of SBIN was ₹ 529/- as of 09-November-21. It traded at 2x/1.5x/1x the book value per share estimates of ₹ 302/343/388 for FY22E/ FY23E/ FY24E respectively.
  • The consensus target price of ₹ 620/- implies a price/book value multiple of 2x on FY23E BPS of ₹ 343/-

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

This week in a nutshell (1st – 3rd November)

Technical talks

NIFTY opened the week on 1st November at 17,783 and closed on 3rdNovember at 17,829. It made a weekly gain of ~0.25%. Nifty is trading at an RSI of 51 with support at 17,613 and resistance at 17,846.

Among the sectoral indices, REALTY (+9.9%), PSU BANK (+4.5%), and MEDIA (+4.0%) led the gainers. There were no sectoral losers this week.

Weekly highlights

  • US markets continued their upward trend S&P 500 rose ~1.8% and Nasdaq also gained ~2.8% this week.
  • The US Labor market got back on track in October to beat the estimates and broad-based payroll gains show greater progress filling millions of vacancies as the effect of declining in delta variant.
  • Reserve Bank of India announced a revised prompt corrective actions framework for banks which will be effective from 1st of Jan 2022. Capital adequacy, asset quality, and leverage will be important parameters for the monitoring banks under the new frameworks.
  • The government of India reduced the Central Excise Duty on Petrol and Diesel by Rs 5 and Rs 10respectively. The Government said the reduction in excise duty will help boost consumption and keep inflation low.
  • US Democrats passed USD 1 trillion infrastructure bill. Administration oversees the biggest upgradation of America’s roads, railways, and other transportation infrastructure.
  • NITI Aayog and World Bank are working together to facilitate a program for faster and easier financing of electric vehicles. The interest rates on Electric Two Wheelers and Electric Three Wheelers is expected to come down to 10% to 12%. According to experts there is afaster adoption of EVs amid a rise in fuel prices and consumers also choosing cleaner and greener mobility.
  • The foreign institutional investors (FII) continued selling Indian equities and sold shares worth Rs 3,580 mn. Domestic institutional investors (DIIs) became buyers this week and bought equities worth Rs 3,060 mn.

Things to watch out for next week

  • Results season continues in India with companies such as Britannia, MRF, M&M, ZEE, Coal India, and ONGC are set to announce earnings.
  • Trade data and more 3Q company earnings will show whether supply chain glitches are decreased or not.
  • Investors’ optimism might be seen next week on the back of the government’s move to cut Excise duty on Petrol and Diesel.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Both urban and rural markets have shown strong recovery – Asian Paints

Update on the Indian Equity Market:

On Monday, NIFTY closed at 18,125 (+0.1%). Private bank (+2.2%), Bank (+2.2%), and Financial Services (+1.3%) were the sectorial gainers, while Realty (-2.8%), Auto (-1.8%), and Consumer Durables (-1.4%) were the losers. The top gainers in NIFTY50 were ICICI Bank (+11.5%), AXIS Bank (+3.5%), and ONGC (+2.7%). The top losers were BPCL (-3.3%), Bajaj Finserv (-3.3%), and SBI Life (-2.9%).

Excerpts of an interview with Mr. Amit Syngle, MD, and CEO of Asian Paints with ET Now on 22nd Oct 2021:

  • In 2QFY22, both value and volume growth has been very strong. Unlike FY21, Metro T1 and T2 cities have performed well this year. The demand sentiment in the bigger cities have been pretty good because they are growing rapidly compared to T3 and T4 cities.
  • The difference between value and volume growth is not much, and overall, both are healthy because of leeway with respect to the premium in the luxury products.
  • Real estate and construction have been picking up and that has contributed to the overall growth. Institutional markets also looking strong, though it cannot be attributed to pent up demand. During the quarter they have seen very healthy volume growth.
  • They feel that new demand has come in at this point of time. In Q1FY22, May was affected very badly but in June the growth was good.
  • Overall, the sentiments have been much better. The markets have been great and monsoons have provided very strong sentiments which may have contributed to a very strong volume growth.
  • Asian Paints has a strong presence in both rural and urban markets. They are expanding their business in rural markets aggressively in the last two years. The monsoon has been good and it is strongly reflecting on the whole agriculture income.
  • The trend shows in H1 was that while T1 and T2 cities have done well. The T3 and T4 cities have performed relatively lower but the overall growth has been quite satisfactory.
  • Increase in the prices of raw material is not only in India, it is happening across the world. Asian Paints took some pre-emptive actions in terms of taking price increase but they did not want to destabilise the markets.
  • In 2QFY22 the inflationary trends continued and they expect this inflationary trend continue well into Q3FY22 as well. This is really unprecedented in terms of what they have seen in last 40 years, they are taking one series of price increase to address margins issues.
  • They are looking at formulation efficiencies in a big way. They have done lots of work in last six months, bringing innovation in technology both in terms of formulation as well as manufacturing and that has given very good results.
  • They have taken an overall price increase of about 7.5% over the last six months. Going forward, the pace of price hikes would be a little bit higher.
  • Price increase is not the only strategy, the company will look at a lot of other areas so that they are able to improve the overall margin trajectory.
  • The price elasticity is more towards the economy set of products not towards the premium or luxury products. Overall price elasticity exists as far as demand in concern. They definitely see what they are going to balance is in terms of saying how do they take price hikes so that market sentiments not affected.

Asset Multiplier Comments

  • The paints sector is likely to deliver strong topline growth as the organized players have started gaining market share from the unorganized ones. This growth will be aided by opportunities in the rural market which offers good prospects after a good monsoon season.
  • In 2QFY22, Asian Paints missed street estimates on the bottom line due to a rise in raw material prices. Steep inflation in raw material prices impacted the operating margins. The Company is confident of turning around the situation in the coming quarter due to festive demand.

Consensus Estimate (Source: market screener websites)

  • The closing price of Asian Paints was ₹ 2,923/- as of 25-October-21. It traded at 89x/65x/53x the consensus EPS estimate of ₹ 32.8/45/54.6 for FY22E/ FY23E/FY24E respectively.
  • The consensus target price of ₹ 3,076/- implies a PE multiple of 56x on FY24E EPS of ₹ 54.6/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Exports will be the focus area after the acquisition – Motherson sumi

Update on the Indian Equity Market:

On Tuesday , NIFTY ended higher at 17,991 (+0.26%). All the sectoral indices were gainers, led by PSU Banks (+3.1%), Media (+1.5%), and FMCG (+1.2%). IT was the lone loser, down by (-0.9%). Among the stocks, Titan (+6.1%), Bajaj Auto (+3.3%), and Bajaj Finserv (+3.0%) led the gainers while HCL Tech (-3.7%), HDFC Life (-1.9%), and Coal India (-1.7%) led the losers.

Excerpts of an interview with Mr. Vivek Chaand Sehgal, Chairman , of Motherson Sumi (MS) with ET NOW on 11th October 2021:

  • Acquisition of CIM Tools in aerospace segment will be beneficial for MS. CIM Tools have an order book of more than $200 million and the company will do very well in coming time.
  • Exports will be the focus area because MS set up bases in the different countries with CIM Tools and there will be a rise in exports because of the customers are abroad.
  • CIM Tools is a profit-making company and idea would be to improve it and add to the top line. MS has a clear thinking. They get 40% return on capital employed.
  • MS is acquiring existing profit-making joint venture in China. It is very important because MS is more into in passenger vehicles and this one is all about commercial vehicles .
  • MS has a huge presence in China and company have a huge market that they can then generate in China itself.
  • Opportunity wise in two to three years company will be all over in China. Company is learning about commercial vehicles. It is a wonderful area to get into it because MS is very strong with commercial vehicles globally.
  • Comparing global and domestic business is very difficult. The kinds of cars that are produced outside and the cars in India are very different in terms of value. Every car that produced there has a buyer for it. That means customers are at very good situation. Companies have the orders but they have some supply constraints.
  • The chip shortage and all other things combated with customers in a very strong way. The demand is huge and the situation is also getting better.

Asset Multiplier Comments

  • Auto production cuts and raw material price increase due to inflation might affect company’s performance in the near term.
  • Company is expanding its business in different segments. This will be the growth driver.

 Consensus Estimate: (Source: market screener website)

  • The closing price of Motherson Sumi Systems Limited was ₹ 245/- as of 12-Oct-2021. It traded at 35x/23x/20x the consensus earnings per share estimate of ₹6.89/10.8/12.4 for FY22E/FY23E/FY24E respectively.
  • The consensus target price of ₹ 254/- implies a PE multiple of 20x on FY24E EPS of ₹12.4/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

 

 

Expect yearly addition of cards to be 2.4 million – SBI Cards

Update on the Indian Equity Market:

On Thursday, NIFTY closed 0.5% lower at 17,618. Top gainers in NIFTY50 were Bajaj Finance (+2.1%), Bajaj Finserv (+2.1%), and Tata Motors (+1.0%). The top losers were Power Grid (-2.8%), Asian Paints (-2.3%), and Shree Cement (-2.2%). The top gaining sectors were Realty (+1.5%), Consumer Durables (+1.0%), and PSU Banks (+0.8%), while the top sectoral losers were Media (-0.9%), Metal (-0.9%), and Bank (-0.8%).

Experts of an interview with Mr. Rama Mohan Rao Amara, MD & CEO at SBI Cards aired on CNBC TV18 on 29th September 2021:

  • The industry has recorded strong spending at the aggregate level. SBI Cards crossed pre- pandemic levels in terms of run rate.
  • The company adopted sustainable strategy and leveraged on every opportunity that they have that is reflected in improvement in market share. Both channels- direct sources and the parent company SBI are contributing equally to improvement in market share.
  • The results of strategy they implemented are reflecting in their improvement in market share, the market share was improving steadily and they have aim for very sustainable performance. This has also helped in diversification of risk and profitability of portfolio.
  • Gradual unlocking has a positive impact on spends per card. In 1QFY22, online spends were contributing to the card spend. With the unlocking, point of sale (POS) contribution is increasing, discretionary spends improved due to categories like jewelry, apparel, and restaurant spends are increasing. Non-discretionary categories such as insurance, health and wellness are also contributing in a big way.
  • SBI Cards aimed for 10,000 new accounts per day and they reached that level and they maintaining it consistently. They have to manage attrition for net growth of the company.
  • SBI Cards has open market and banca customer channel in open market they have many collaborations.
  • He expects growth of around 4 million card additions in a year & India is still an underpenetrated market when it comes to credit cards.
  • They are planning to expand their market into tier-III and tier-IV cities with the help of their bank channels which beneficiary for SBI Cards in customer addition.
  • The market expansion in tier-III and tier-IV cities takes slightly longer time compared to tier-I and tier-II.
  • If they are growing at 2 million, then it is safe to presume that it will be five times minimum for the industry, he mentioned.

Asset Multiplier comments:

  • The company is expected growth in tier-III and tier-IV cities, which might be lucrative for the industry.
  • SBI Cards might be have an advantage than other peers are their branch channels in tier-III and tier-IV cities which beneficiary for SBI Cards in customer addition.
  • The risk from growth of the Fintech organizations might be contraction in the market share of SBI cards.

Consensus Estimate: (Source: market screener websites)

  • The closing price of SBI Cards was ₹ 1,027/- as of 30-September-2021.  It traded at 12x/ 10x/ 7x the consensus book value estimate of ₹ 84/108/139 for FY22E/23E/24E respectively.
  • The consensus price target is ₹ 1,185/- which trades at 9x the book value estimate for FY24E of ₹ 139/-

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Expect attrition rate to get a little worse before improving – Happiest Minds Technologies

Update on Indian Equity Market:

On Monday, NIFTY ended at 17,397 (-1.07%). Among the sectoral indices, FMCG (+0.9%) was the only sector that ended higher, whereas Metal (-6.6%), PSU Bank (-4.2%), and Realty (-2.10%) ended lower. Among the stocks HUL (+2.9%), Bajaj Finserv (+1.1%), and ITC (+0.8%) led the gainers while Tata Steel (-10%), JSW Steel (-7.7%), and Hindalco (-6.1%) led the losers.

Excerpts of an interview with Mr. Venkatraman Narayanan (MD & CFO) and Mr. Joseph Anantharaju (Executive VC) with CNBC TV18 on 17th September 2021:

  • The demand scenario has only got better from where they are at the end of the first quarter. Things are looking very well for customer additions and the growth of existing customers. So, demand is looking good.
  • On the supply side they said, the supply situation is not as good, but they are managing to hold on with employee net additions of about 300 in the first quarter. They are trying to keep similar numbers for the next three to four quarters.
  • Most verticals that they are operating in seem to be showing strong demand growth with customers initiating or implementing digital transformation initiatives. A few of them should be a little ahead or having spent more, like edutech which continues to be strong for them. In high tech and retail they are seeing a good spend with the whole e-commerce move. They are seeing some initiatives in digital media as well.
  • They further said, in terms of technologies, the cloud is almost a done deal now. Most of their clients are operating on the cloud, and a lot of work is happening around leveraging artificial intelligence and analytics.
  • One thing they have noticed in the last few months is that more clients are looking at more automation. They have seen a strong uptick in automation as well, from a technology angle.
  • On attrition, they said things are going to get a little bit worse and then start improving. As there is always a slow build-up when it comes to attrition. People move out looking for new opportunities but the company keeps adding and backfilling the opened positions.
  • So demand was increasing but along with supply-side affected due to high attrition rate that’s why it is likely to get worse. The attrition rate was 15% in last quarter it will increase and then they will stabilise it over some time.
  • On margins, they said the sustainable margins should be in the range of about 22% to 24%.

 

Asset Multiplier Comments

  • The IT sector is witnessing a high attrition and there is a talent war among the competitors, which might affect the margins. The companies are trying to decrease the attrition rates which might help in margin expansion in the medium term.
  • Happiest Minds is seeing healthy demand and is targeting industry leading growth in the medium to long term.
  • The company also has a strong demand growth in verticals that they are operating.

Consensus Estimate: (Source: market screener website)

  • The closing price of Happiest Minds was ₹ 1,491/- as on 20-Sept-2021. It traded at 113x/ 90x/ 78x the consensus EPS estimate of ₹ 13.2/ ₹16.5/ ₹19.1 for FY22E/FY23E/FY24E respectively.
  • The consensus target price of ₹ 1,155/- implies a PE multiple of 60x on FY24E EPS of ₹19.1/-

 

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”

Exide Life to add 30-40% agency force – HDFC Life

Update on Indian Equity Market:

On Thursday, NIFTY ended at 17,378 (+0.3%). Among the sectoral indices, REALTY (+3.2%), IT (+1.5%), MEDIA (+1.3%) ended higher, whereas PRIVATE BANK (-0.5%), BANK (-0.5%), and FINANCIAL SERVICES (-0.3%) ended lower. Among the stocks, WIPRO (+5.0%), HCL TECH (+2.7%), and INFOSYS (+1.8%) led the gainers while IOC (-1.6%), IndusInd Bank (-1.2%), and ONGC (-1.2%) led the losers.

Excerpts of an interview with Ms. Vibha Padalkar, MD & CEO, HDFC Life Insurance with ET Now on 3rd September 2021:

  • The potential target company needs to have a credible distribution which Exide Life has. Exide Life has a strong agency channel and another aspect is the quality of the book.
  • Exide Life has a scale issue which is a problem for many smaller players. Presently, Exide Life has 37,000 agents and a lot of them are highly productive. This will add about 30% to 40% of agency force to HDFC Life.
  • Exide Life has a strong presence in the southern regions of India and also in tier II and III towns, about 40% of business comes from these geographies. This is complementary for HDFC Life which has a focus on Metro cities.
  • About 89% of the consideration is in share swap form. About 11% which is worth Rs 7,260mn will be a cash payout. After the share issue happens, Exide Industries will be on-boarded as HDFC Life shareholder with a 4.1% stake in the merged entity.
  • The first phase of the merger is after the CCI & IRDAI approval, HDFC Life will be able to issue shares to the seller and the entity becomes a subsidiary of HDFC Life. After that HDFC Life will go approach the NCLT for merger approval of the subsidiary into the parent company. But after the first phase HDFC Life will have a control over the business.
  • Due to the cash payout of Rs 7,260 mn, HDFC Life’s current solvency ratio will go down by about 15%. As this will happen after a few months, fresh profit will be generated by the company and the solvency ratio start recovering.
  • Exide Life’s embedded value is about Rs 27bn. HDFC Life is reasonably satisfied of the quality of their embedded value does not believe that there would be any material impact to that embedded value after HDFC Life take control of the entity.

Asset Multiplier Comments:

  • This deal has could expand HDFC Life’s presence in the southern regions of India. Growth is likely to be driven from the tier II and III towns as Exide Life has a strong presence in these geographies.
  • This deal is beneficial for HDFC Life in terms of distribution mix and product mix. This acquisition will improve the new business margins because of product mix and HDFC Life has focused on creating diversified channels and products.

Consensus Estimate: (Source: market screener website)

  • The closing price of HDFC LIFE was ₹ 735/- as of 06-Sept-2021. It traded at 100x/80x/67.7x the consensus EPS estimate of ₹ 7.3/ 9.2/ 10.8 for FY22E/FY23E/FY24E respectively.
  • The consensus target price of ₹ 777/- implies a PE multiple of 67.7x on FY24E EPS of ₹ 10.8/-
  • In the case of life insurance companies, the embedded value per share is the correct multiple for valuing the company. The consensus estimate of this metric is not available on any of the websites.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”