23 Aug

Bluestar (BLSTR): Company takes a cautious approach in the troubled times

Dated:- 22nd August 2019

Update on the Indian market:

In the past few days, all eyes are towards the government, expecting to announce stimulus measures for the economy to rekindle the risk appetite of investors. The Chief Economic Adviser (CEA) Krishnamurthy Subramanian’s comments reduced such a possibility, leading to a sell-off in the markets. NIFTY fell by 1.6%. Amongst the NSE 50, worst performers were Yes Bank (-12.2%), Vedanta Limited (-7.6%), Bajaj Finance Ltd (-5.2%) and Indiabulls Housing Finance Limited (-5.2%). While the best performers were Britannia (+1.7%) and Tech Mahindra (+1.5%). In the sectoral indices, the realty sector was the worst performer (-6.7%); followed by Metal (-3.6%), PSU Bank (-3.6%).

Bluestar (BLSTR): Company takes a cautious approach in the troubled times

In an interview on CNBC-TV18 on 21st August 2019, Bluestar MD, Mr B Thiagarajan talked about industry scenario. Key highlights are below:

·       The performance of the Electro-Mechanical Projects and Packaged Air Conditioning Systems (EMP) was a conscious decision made by the management. The order inflows from across the segments remain healthy. BLSTR reported 34% YoY increase in the order book at ~Rs 28,410 mn.  BLSTR delayed the order execution with the focus on controlling working capital.

·       BLSTR reported ~9% YoY growth in 1QFY20 in the Unitary Products segment revenues. The Room Air Conditioners (RAC) revenues grew by ~25% YoY while the commercial refrigeration product revenues de-grew by ~22% YoY. The decline in the commercial refrigeration products sale was a result of efforts for migration to a new technology product range. The commercial refrigeration product sales peaked in 4QFY19 and were muted in 1QFY20. BLSTR is seeing improved demand in 2QFY20.

·       ~40% of the air conditioner sales are through consumer finance schemes. The payback period is ~10 months and currently, no repayment issues have been noticed. BLSTR deals through financers like Bajaj Finance.  The demand is higher for the lower end products.

·       The floods in certain parts of India may lead to subdued demand in the festive season. BLSTR expects ~10-15% growth in the unitary products segment for FY20E. The Rupee depreciation will put stress on costs. 

·       BLSTR intends to focus on margins and cash. The cash position has been improving at BLSTR. In 1QFY20, it became ~Rs 10 mn net cash company from a borrowing level of Rs 4,050 mn in 1QFY19.

Consensus Estimate (Source: market screener website)

·       The closing stock price of BLSTR was Rs 710/- as of 22-August-19. It traded at 31x / 25x / 22x the consensus EPS for FY 20E / FY 21E / FY 22E EPS of Rs 23.0 / 28.3/ 32.8 respectively.

·       Consensus target price of Rs 779/- implies a PE of 24x on FY22E EPS of Rs 32.8

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23 Aug

REPCO Home Finance: Confident of recovering 90% of its non-performing assets

Dated:- 21st August 2019

Updates on the Indian market:

With the completion of result season and no major economic news today, the markets continued the downward journey. Most of this decline came during the closing hours. The Nifty fell by 98 points (-0.9%). Some of the biggest losers in NSE 50 were Tata Motors (-9.5%), Indiabulls Housing (-8.9%) and Yes Bank (-8.6%). All the NIFTY sectorial indexes fell.  With a 3% decline, PSU Bank and Metal sectors were the worst performers.

REPCO Home Finance: Confident of recovering 90% of its non-performing assets

Following are the excerpts from the interview given by Mr Yashpal Gupta, MD & CEO of Repco Home Finance published in Livemint.

·       The loan loss of guarantee given by the government to non-banks may not help the company. He was optimistic about the announcement on priority sector lending through Non-Banking Financial Companies (NBFC).

·       All the Non-Performing Assets (NPA) are from the retail segment as 100% of the loan book is to the retail segment. According to him, the first quarter slightly lags in recoveries and it is a yearly phenomenon for the company. The second part is that because the customers are retail, even after they become NPA, they continue to pay, unlike corporate or builder loans.

·       Out of the NPAs as of June 2019, more than 50% of the accounts are paid with a gap of 2-3 months. It is the technical issue which keeps them as NPA; otherwise, the company does not see any problem as all other numbers are very good according to Mr Gupta.

·       Most of the NPAs are coming from non-salaried class. Earlier, these customers used to pay and the payments used to be in cash. It was affected because they are integrating into the formal economy. The salaried segment is not affected that much. Within product-wise, LAP and home loan are equally distributed.

·       The loan book growth during the quarter was at 13% and the company has given guidance of 12-15% YoY loan book growth for the year. The salaried segment percentage has increased from 45% to 48% during the quarter. The company is confident that the lower prepayment rates along with muted disbursements will lead to loan book growth.

Consensus Estimate (Source: market screener website)

·       The closing price of Repco was Rs 315/- as of 21st August 2019. It traded at a price to Book Value (P/BV) multiple of 1.09x/0.96x the consensus Book Value estimates for FY20/21E of Rs 290/330 respectively.

·       Consensus target price of Rs 447/- implies a P/BV of 1.35x on EPS of Rs 330 for the year ending Mar-21E.

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21 Aug

Ravneet Gill, MD&CEO, Yes Bank: Wants Yes Bank to retain its corporate character.

Dated: 20th August 2019

Excerpts from an interview published in The Hindu Business line dated 19th August 2019.

  • On the recent QIP: The Yes Bank QIP was oversubscribed over 3 times. This when two other IPOs in the market were undersubscribed.  Yes Bank could raise Rs 1,930 cr as the shareholders’ approval was limited to a dilution of 10%. The QIP impacted the CET-1 ratio positively by 60 bps (8.6% vs. 8.0% prior to QIP). Management plans to add another 20-25 bps through balance sheet rationalization. This will be done by reducing the corporate book.
  • Historically Yes Bank has been a strong structured finance bank.  Eventually, management wants to free up capital to grow on the retail side. Management plans to change the mix of corporate to retail in terms of revenue from the current 67:33 to 50:50 by 2025. But management wants Yes Bank to retain its corporate look, feel and character and not become a retail bank.
  • The stressed asset book is not very granular. There are a handful of entities that are facing illiquidity. If those are resolved, the complexion of the book would be completely different.
  • The sub-investment book (BB and below assets) currently stands at Rs 29,000 cr. Three names account for nearly 80% of the book. 2 out of these 3 that account for around Rs 9,000 cr should be fully resolved in the current quarter. This will release capital for the bank and risk perception around Yes Bank will moderate.
  • There is no other bank as digitally enabled as Yes Bank. The market does not recognize that yet.
  • Best way to lower Risk-weighted assets (RWA) is to try and lend to high-rated corporates. For that, cost of funding needs to be competitive which can be achieved by strengthening of the liability profile.

Share price performance of Yes Bank on 20th August 2019:

Yes bank share price declined by over 7% on Tuesday. Yes Bank holds 12.79% stake in CG Power and Industrial Solutions Ltd. The risk and audit committee of CG Power disclosed Corporate Governance issues in the Company. The issues include but are not limited to the understatement of liabilities, understatement of advances to related and unrelated parties, provision of certain assets of the company as collateral without due authority. These actions were allegedly carried out by identified company personnel (both current and past). Shares of CG Power tanked 20% on Tuesday.

Consensus estimates (Source: Marketscreener website):

  • The share price on 20-08-2019 was Rs 71/- per share. It was trading at a P/B of 0.60x/0.55x its book value per share estimates of Rs 118/127 for FY20E/FY21E respectively.
  • The consensus price target is at Rs 117/- implying P/B of 0.92x for FY21E BVPS of Rs 127.
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20 Aug

IPCA Laboratories Ltd (IPCA): 1QFY20 API business driving the business growth

Dated: 19th August 2019

Quarterly Performance:

  1. Net Sales for the quarter stood at Rs 10,110 mn a growth of 18% YoY. The growth was driven by API (Active Pharmaceutical Ingredient) revenue growth of 37% YoY. The Domestic API grew by 9% while exports grew by 47% YoY. The Sartans (used in hypertension treatment) sales helped in the growth for the APIs. India finished dosage business for the quarter grew 13% YoY while the International finished dosage business grew 12% YoY.
  2. The EBITDA for the quarter stood at Rs 1,950 mn, a growth of 40% YoY. The growth at the operating level includes a reduction in the remediation cost in the quarter compared to last year and a reduction in the R&D cost. The remediation cost for the quarter stood at Rs 60 mn while the R&D cost was close to 2.5% of the total sales.
  3. The EBITDA margins for the quarter were at 19.3% as against 16.3% in 1QFY19.
  4. The PAT for the quarter was at Rs 1,320 mn showing a growth of 101% YoY.

Management Commentary:

  1. IPCA management expects the domestic business to remain stable and deliver revenue growth of 13-14% in FY20E.
  2. The API business was led by an increase in the sales of Sartans. The Company has seen strong demand for Valsartan and Losartan in the export markets.
  3. The Institutional business declined 28% YoY in this quarter because of the slow offtake of the Global Fund business. The Company has received an order of Rs 280 mn in this quarter. They expect the order for the full year of FY20E to be around Rs 900 mn. The Institutional business revenues are expected to be in the range of Rs 2,250-2,500 mn for the full year FY20E which includes Global Fund order.
  4. The USFDA issue for the 3 plants (Pitampura, Piparia & Ratlam) remains unchanged as IPCA expects FDA to visit these plants.
  5. The remediation cost for the full year of FY20E is expected to be less than Rs 100 mn.
  6. The Capex for the quarter was around Rs 600 mn and is expected to be Rs 2,200-2,300 mn for FY20E. the CAPEX would majorly include debottlenecking of the capacities.
  7. The tax rate for the whole year is expected to be 20% as it is a MAT (Minimum Alternate Tax) company.

Consensus Estimate (Source: market screener website)

  • The closing price of IPCA Labs Ltd was Rs 951/- as of 19-August-19. It trades at 22x/17x/ 16x the consensus EPS for FY20E /21E/FY22E of Rs 43.9/ 54.7/ 60.0 respectively.

Consensus target price of Rs 1,021/- implies a P/E of 19x on March-FY21E year ended.

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20 Aug

Galaxy Surfactants- A stable performance in the storm.

Dated – 19th August 2019

About company

  • Galaxy Surfactants Limited is a leading manufacturer of performance surfactants and specialty care products with over 200 product grades used in Home and Personal Care industry. Galaxy surfactants has its presence in 70 countries with more than 1700 Customers.

Q1FY20

  • Galaxy Surfactants reported 7% YoY decrease in their revenue at Rs 6,650 Mn
  • Total Volume grew by 4% on YoY basis to 54,767 MT.
  • Galaxy reported EBITDA growth of 12% YoY basis to Rs 970 Mn.
  • Profit after tax stood at Rs 530 Mn, a jump of 15% YoY basis.

Management Commentary

  • -7% decrease in the revenue was mainly caused by decrease in their raw material cost (Fatty alcohol), which declined by 19%.
  • Galaxy surfactants completed its capex at Jhagadia plant, which increased the capacity by 50,000 MT.
  • Capex guidance for the year FY20 is Rs 1250 Mn.
  • Management guided that EBITA per tonne will be in the range of 15,000 MT to 17,000 MT.
  • There was marginal impact of Ind AS 116 on the company.
  • As per the current scenario in domestic market, management expects Q2FY20 to be weaker, whereas in Q3FY20 & Q4FY20 management expects revival of demand in domestic market.
  • Galaxy surfactants continuous to perform well in Rest of the world market. In Q1FY20 company reported 26.5% YoY increase in their sales volume (in MT).

 Consensus Estimate (Source: market screener website)

  • The closing price of Galaxy Surfactants was Rs 1,302/- as of 19-August-2019. It traded at 21.4x/18.4x consensus EPS for FY20E and FY21E is Rs 60.8/- & Rs 70.6/- respectively.
  • Consensus target price of Rs 1,340/- implies a PE of 19.0x on FY21E EPS of Rs 70.6

For more visit www.assetmultiplier.co.in

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19 Aug

Time Technoplast Ltd (TIME IN): 1QFY20 – A Stable Outlook.

Dated – 16 August 2019

1QFY20 Results

  • Time Technoplast Ltd (TIME) reported 11% YoY growth in consolidated revenues at Rs 8,684 Mn. The revenues in both the segments – Polymer products and Composite products increased by ~10.9% and ~11.5% YoY to Rs 6,158 Mn and Rs 2,523 Mn respectively. Share of Polymer Products in total revenue was 71% whereas share of Composite products was 29%. The Value-added products grew by 15% in Q1FY20
  • The EBITDA increased by 4.9% YoY to Rs 1,267 mn and the EBITDA margin remained stable at 14.6%.  
  • Segment EBIT margins for polymer Products and composite products were 10.1% and 9.8% respectively.
  • Time reported PAT of Rs 438 Mn with YoY growth of ~1.15%.

Management Commentary

  • 11% revenue growth was led by volume growth of ~14% YoY in 1QFY20.
  • Pipe segment continuous to have a healthy order book. The pipes/ducts have substantial business potential especially in Smart cities.
  • In industrial packaging segment, The Greenfield manufacturing facility at Bengaluru is completed and production started in Q1 of FY20.
  • Time did a capex of Rs202 Mn on established products and Rs 102 Mn on Value added products in Q1FY20.
  • Overall capacity utilization is 80% (India – 83%; Overseas – 74%).
  • Ongoing tension between US and china can benefit company’s IBC business.
  • Company is expecting a tax rate of 26% for FY20.

Consensus Estimate (Source: market screener website)

  • The closing price of TIME was Rs 65/- as of 14-August-2019. It traded at 5.7x/5.2x consensus EPS for FY20E and FY21E is Rs 11.3 & Rs 12.5 respectively.
  • Consensus target price of Rs 187/- implies a PE of 14.9x on FY21E EPS of Rs 12.5.

For more visit www.assetmultiplier.co.in

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19 Aug

Bluestar: 1QFY20 – Increase in raw material prices impact profitability

Dated:- 16th August 2019

1QFY20 Results

·       Bluestar (BLSTR) reported consolidated revenue growth of 4% YoY to Rs 15,755 mn in 1QFY20. The Electro-Mechanical Projects and Packaged Air Conditioning Systems (EMP) segment reported muted revenues at Rs 6,239 mn impacted by a slowdown in the execution of projects business. The Main business of ACs – Unitary Products (UP) – segment revenues grew by 9% YoY to Rs 9,069 mn. The Professional Electronics and Industrial Systems (PEIS) segment revenues declined by 23% YoY to Rs 446 mn on a higher base of 1QFY19.

·       The EBITDA declined by 16% YoY to Rs 1,149 mn. The raw material costs increased by ~440 bps YoY while the other expenses reduced by ~325 bps YoY. The EBITDA margin contracted by ~180 bps YoY to 7.3%.

·       All segmental margins were lower YoY. In the UP segment, the EBIT margins declined by ~50bps YoY to 10.9%. The EMP segment margins declined by ~100 bps YoY to 5.4%. The PEIS segment margins declined by ~450 bps to 9.9% impacted by the variation in the mix of new orders.

·       The other income was higher at Rs 217 mn on account of receipt of an industrial promotion subsidy for the manufacturing facility at Wada.  The finance costs were lower at Rs 82 mn (v/s Rs 121 mn in 1QFY19) due to the effective management of working capital and consequently lower borrowings in Q1FY20. Consolidated PAT stood at Rs 768 mn v/s Rs 916 mn in 1QFY19.

Management Commentary

·       Rs 140 mn industrial promotion subsidy received for the manufacturing facility at Wada; includes Rs 84 mn allocated to the EMP segment and Balance Rs 56 mn allocated towards the UP segment.

·       For the EMP Segment, the order book reported a growth of 34% Yoy to Rs 28,410 mn and the order intake increased by ~55% YoY at ~Rs 9,669 mn

·       The UP-segment margins were impacted due to the adverse product mix. In 1QFY20, there was an increase in the demand for 2 Star – 3Star fixed speed ACs which are comparatively lower margin products.

·       Management guided for 12-15% YoY revenue growth for the Room AC segment for FY20E and margin guidance of ~9.5%-10%. BLSTR’s current market share is ~12.5% and the management expects to reach 13.5% by FY20E end.

·       The Market size of Room ACs is ~Rs 110 -120 bn with annual volumes of 5.5 mn-6 mn units. The industry market share of inverter AC segment was ~60% in Q1FY20, BLSTR’s inverter share was 52% during the quarter.

Consensus Estimate (Source: market screener website)

·       The closing price of BLSTR was Rs 702/- as of 16-August-19. It traded at 30x / 25x the consensus EPS for FY 20E / FY 21E EPS of Rs 23.3 / 28.3 respectively.

·       Consensus target price of Rs 776/- implies a PE of 27x on FY21E EPS of Rs 28.3.

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16 Aug

Visaka Industries Ltd (VSKI IN): Demand pickup seen from the beginning of 2Q

Dated:- 14th August 2019

Visaka Industries Ltd (VSKI IN): Demand pickup seen from the beginning of 2Q   

1QFY20 Results

·       Visaka Industries Ltd reported ~2% YoY growth in revenues at Rs 3,528 mn in 1QFY20. The Building Products (BP) segment revenues remained stable YoY at Rs 2,960/- and the Synthetic Yarn (Yarn) segment revenues grew ~13% YoY to Rs 568 mn.

·       The EBITDA margins declined YoY to 13.8% v/s 15.4% in 1QFY19 impacted by an increase in material costs by ~200 bps YoY to 49%.

·       The segmental EBIT margins in BP declined by ~340 bps YoY to ~13.7% while in Yarn; the margins increased by ~225 bps to ~11%.

·       VSKI reported a YoY decline in other income at Rs 15 mn v/s Rs 69 mn in 1QFY19; which included a one-time income from an insurance claim. This resulted in a decline of ~24% YoY in PAT at Rs 231 mn v/s Rs 303 mn in 1QFY19.

Management Commentary

·       The BP segment performance was impacted due to lower sales of cement asbestos sheets in May 2019. The long span of general elections and adverse weather conditions led to lower demand. The cement asbestos sheets reported a 4% YoY volume decline and 150 bps margin decline in 1QFY20.

·       The roofing industry volumes reported a decline of ~5.6% YoY in 1QFY20 while VSKI dropped by 2% YoY.

·       The volumes of the boards and panel products grew by ~28% YoY. The Jhajjar plant is operating at ~45% capacity and is expected to scale up to ~70-80% utilisation level in FY20E.

·       The ATUM roofs reported ~Rs 8.4 mn revenues in 1QFY20. Management expects to close orders of ~Rs 35 mn in 2QFY20 which will scale up subsequently.

·       The Yarn segment volumes grew by 6.6% YoY and the effective price increase was ~7% YoY for 1QFY20.     

·       Management guides for a recovery in all the segments in the rest of FY20E. As per their commentary; the cement asbestos roofs reported better volumes June 2019 onwards while the boards and panels and Yarn products continued to grow.

Consensus Estimate (Source: market screener website)

·       The closing price of VSKI was Rs 311/- as of 14-Aug-2019. It traded at 7x / 6x the consensus EPS for 20E /21E EPS of Rs 45.1/ 51.8 respectively.

·       Consensus target price of Rs 487.5/- implies a PE of 9x on FY21E EPS of Rs 51.8/-

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14 Aug

APL Apollo Tubes Ltd: 1QFY20 Results – Value-added products panning out well.

Dated: 13th August 2019

  • APL Apollo volume grew 29% YoY at 388,511 tonnes for the quarter driven by volume growth from GP pipes, Hollow DFT pipes and Normal Hollow pipes of 33%, 30% and 33% YoY respectively.
  • Net Revenues were higher by 24% YoY at Rs 20,716 mn. The growth was driven by an uptick in the domestic and overseas market. The value-added products in the categories of Hollow Pipes, DFT (Direct Forming Technology) pipes and GP (Pre- Galvanised) pipes contributed to the revenue growth.
  • The revenues include a contribution from Apollo Tricoat for 13 days of the operation in this quarter which amounted to Rs 117 mn.
  • EBITDA for the quarter grew 15% YoY at Rs 1,250 mn. The EBITDA margins were at 6.0% as against 6.5% in 1QFY19. EBITDA per ton stood at Rs 3,334.5 vs Rs 3,584.4 in 1QFY19. The key factors impacting the operating performance were:
  • Increased spend on Brand development and marketing activities, which stood at Rs 107 mn during the quarter.
  • Stamp duty of Rs 23 mn for the acquisition of the Shankara plant during the quarter resulted in higher other expenditure.
  • Raw material prices during the quarter were down by ~Rs 1,500/ ton which impacted inventory valuations
  • Depreciation stood at Rs 202 mn in 1QFY20, higher by 33% YoY and interest costs stood at Rs 283 mn, higher by 7% YoY. Depreciation was higher due to the commissioning of new capacities and the establishment of a new warehouse in Dubai in the quarter.
  • In 1QFY20, PAT grew by 11% to Rs 521 mn. Net profit growth was impacted by higher depreciation and increased tax rate (36% for the quarter).

Management Commentary

  • The management has maintained its 20% plus volume guidance for FY20E & FY21E respectively.
  • They have set a PAT target growth of 25% for FY20E & FY21e on the back of the improved operating performance going forward.
  • They expect the EBITDA per tonne to remain muted at Rs 3,300-3400 for FY20E considering the slowdown in the economy which will have some impact on the Company. They expect EBITDA per tonne to be around Rs 4,000-5,000 tonne in the long term.
  • The Company sees no further Capex requirement for next 2 years. They expect the Capex to be around Rs 500 mn annually for the next two years.
  • As per the Company, Shri Lakshmi Metal Udyog, APL Apollo Tubes wholly-owned subsidiary, has concluded the acquisition of Apollo Tricoat in June 2019.
  • In 1QFY20, Apollo Tricoat started commercial production of its first two product categories namely, the In-line Galvanized (ILG) pipes and Designer Pipes at the existing Greenfield plant at Malur, Bengaluru. The plant has a capacity of 150,000 tons per annum.
  • In the month of July 2019, Apollo Tricoat commenced commercial production of Door Frames at its greenfield manufacturing facility at Dujana, Dadri having a capacity of 50,000 MTPA.
  • All three launched product segments are higher-margin value-added products, given their niche product applications in India. The Company is also on track to launch the other innovative products category of Narrow Sections by September 2019. An improved portfolio of all the four value-added segments is expected to broaden the product mix and should enable the Company to deliver a healthy financial and operational performance going forward.
  • Kerala contributes around 8-10% to the total sales volume for APL Apollo. As Kerala has been hit by floods, the management expects a negative impact on the sales volume. Thus to cover up the volume loss, the Company will focus on other states for a healthy growth in volumes.

Consensus Estimate (Source: market screener website)

  • The closing price of APL Apollo Tubes Ltd was Rs 1,299/- as of 13-August-19. It trades at 15x /11x the consensus EPS for FY20E /21E of Rs 88.1/ 114.0 respectively.
  • Consensus target price of Rs 1,981/- implies a P/E of 17x on March-FY21E year ended.
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13 Aug

Voltas Ltd (VOLT IN): Unitary cooling products performance takes the heat off in 1QFY20.

Dated:- 9th August 2019

1QFY20 Results

·       Voltas reported a 24% YoY growth in consolidated revenues to Rs 26,540 mn. The revenue growth was driven by 47% YoY growth in the Unitary Cooling Products (UCP) (main revenue earning air conditioners) segment at Rs 17,488 mn. The Electro-Mechanical Projects (EMP) segment revenues declined by 5% YoY to Rs 8,241 mn and the Engineering Product Services (EPS) segment revenues declined by 4% YoY to Rs 740 mn.

·       The EBITDA margin declined by 35 bps YoY in 1QFY20 to 11% from 11.35% in 1QFY19.

·       Voltas reported EBIT margin expansion of ~60 bps YoY in UCP to 13.1%. The EBIT margins declined by ~220 bps YoY and ~230 bps YoY in EMP (8%) and EPS (32.4%) respectively.

·       Voltas reported a one-time expenditure of ~Rs 430 mn towards a Voluntary Retirement Benefits Scheme. The adjusted Consolidated PAT for 1QFY20 stood at Rs 1,941 mn v/s Rs 1,839 mn in 1QFY19. The profit share in the joint ventures including was Rs 213 mn in this quarter v/s Rs 193 mn in 4QFY19.

Management Commentary

·       Voltas continues to be the market leader in Room Air conditioner business with a market share of 24.1% for 1QFY20 (25.3% for June 2019) at Multi-Brand Outlets. The Air Conditioning industry grew by 36% YoY; Voltas grew higher than the industry YoY growth of ~47%. The inverter ACs accounted for more than 50% of the total revenues.

·       Commercial Refrigeration products and Air Coolers witnessed increased demand in the quarter. The air purifiers too received an encouraging response.

·       Management guided for UCP segment EBIT margins to remain in the range of 11-12% for FY20E.

·       In the EMP segment, the order book stood at Rs 47,560 mn, higher by ~3% YoY. The domestic order intake during 1QFY20 was Rs 4,490 mn v/s Rs 1,500 mn in 1QFY19. On the International front, Voltas continues to be cautious.

Consensus Estimate (Source: market screener website)

·       The closing price of VOLT was Rs 606/- as of 09-Aug-2019. It traded at 33x / 28 x / 24x the consensus EPS for 20E /21E /22E EPS of Rs 18.2 / 21.8 / 25.1 respectively.

· Consensus target price of Rs 630/- implies a PE of 25 x on FY22E EPS of Rs 25.1/-

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