Results on 23rd Oct 2020

Results on 23rd Oct 2020

Q1

Strong results in large cap names
Nestle
Back to double digit growth
Domestic Revenue grows 10.2% vs expectations of 7-8% growth
Brokerage upgrades post results; CLSA increase target price from Rs16,100 to Rs17,650

Tech Mah
BEAT
$ Rev at 4.8% vs est of 3.5%
EBIT Margins at 14.8% vs expected 11.8%
Co is the cheapest in tech pack as they were unable to score on margins
CC Rev growth in enterprsie at 4.3% QoQ and 0.3% YOY

Q2

STANDOUT RESULTS with reasonable valuations
Persistent System
Sustained performance, valuation at 18x FY21e EPS
Stock is up 50% in last 3 months
Strong results; 2nd time in a row
Q2 $ Rev at 3.8%; margins at 7 quarter high
Services Rev segment growth at 5.3% QoQ, up 17.2% YOY

STANDOUT RESULTS + rich valuations
CDSL
M-cap 4811 cr, ttm pe 38x
Sales up 69%, PAT up 66%
Q2: Number of new active Beneficial Owners accounts increased by 29 lakhs to 2.61 crore
38x TTM PE

Aarti Drugs (already run up seen)
FY20 EPS at 60.57; 1HFY21 EPS at 68.98
M-cap 6978 cr, 35x ttm p/e, p/b 11x
Sales up 21%, EBIDTA up 70%, PAT up 133%

Apollo Tricoat
M-cap 2008 cr, ttm pe 32.5x, p/b 8.5x
Sales up 115%, ebidta up 142%, pat up 152%
Margins at 11.3% vs 10%

Supreme Petro
Good results but look at valuations
M-cap 2544 cr, TTM P/E 51x (wow)
Sales up 4%, ebidta at 116 cr vs 30 cr, margins at 16.8% vs 4.4%, pat at 86 cr vs 36 cr

Q3 – any turnaround & other results

Turnaround at reasonable valuations
Vardhman Textiles
Good sequential growth but long way to go for 15% margins and more imp to watch sales in growth
11x ttm p/e, 0.7 p/b
Sales down 2.3% yoy, up 99% qoq
Ebidta at 145 cr vs loss of 2 cr qoq, vs 250 cr yoy
Margins at 8.9% vs loss in last quuarter vs 15% yoy

Okish results + reasonable valuations
Polycab
M-cap 13167 cr; 18x TTM PE; 30% roce
Sales down 5.7%, EBIDTA up 15%, PAT up 15%
Wires & Cables segment aids margins
Huhtamaki PPL
M-cap 2331 cr, ttm pe 15x
Sales up 5.5%, ebidta up 17%, pat up 15.6%

Okish results + expensive valuations
Rossari Biotech
m-cap 4187 cr
64x ttm p/e, p/b 12.4x
Sales up 14%, ebidta up 6%, pat up 16%

Sudarshan Chem
m-cap 3378 cr, 28x ttm p/e, p/b 5.5x
sales up 1%, ebidta up 2%, pat down 35%

Varinder Bansal

Managing Partner, Pantomath Asset Management. Ex-Corporate Editor & Head of Research, CNBC-TV18

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