Stocks in the news:
1. Gujarat Gas: Gujarat Gas reported Q2FY21 results which were better than our estimates on all fronts. Revenues were flat YoY to | 2513 crore as sales volume increased 5.5% YoY during Q2FY21. Sales volume was at 9.8 mmscmd while gross margins at | 10.2/scm. EBITDA was | 733 crore, up 97.8% YoY. Subsequently, reported PAT declined 8.2% YoY to | 474.8 crore as company had negative tax outgo in Q2FY20
2.Berger paints: Berger paints reported a healthy performance during Q2FY21 with EBITDA margin and PAT coming in much ahead of our estimates. Revenues, earnings increased by 9% and 14% YoY to ~| 1743 crore and | 221 crore led by sharp increase in EBITDA margin by 350bps YoY to 19.2%
3. Somany Ceramics: Somany Ceramics reported resilient Q2FY21 numbers with sales volumes recovery faster than anticipated. The tiles sales volume was up 2.7% YoY at 12.9 MSM with realisations down 1.9% YoY, possibly owing to sales mix. The overall revenues were up 0.4% YoY. The EBITDA at | 49.4 crore, was up 10.4% YoY, largely driven by cost rationalisation initiatives (employee and other expenses down ~12% YoY) along with benign power & fuel expenses which was down 12% YoY due to lower gas prices. PAT was at | 20.5 crore, up 2.2x YoY, with growth aided by superior operating performance, lower interest costs as well as some one-offs in base quarter.
4. Ashok Leyland: CV maker Ashok Leyland's fortunes are expected to have improved substantially from the previous quarter. However, overall weakness is still seen persisting for Q2FY21E. Total volumes for the quarter were at 19,444 units, down 33% YoY. Product mix remained adverse, with MHCV: LCV ratio at ~40:60 vs. ~58:42 YoY. Consequent standalone net sales for the quarter are seen at | 2,569 crore, down 34.6% YoY. Negative operating leverage is expected to have resulted in loss at EBITDA level of | 138 crore (vs. loss of | 333 crore QoQ) , with loss after tax expected at | 273 crore (vs. loss of | 389 crore QoQ).
5. Voltas: Voltas’s consolidated revenue fall will be limited to ~11% YoY for Voltas led by fast recovery in the UCP division (revenue fall is limited to 10%) with pick up in secondary sales post ease in lockdown restrictions. However, delay in pick-up of construction activities would lead fall in revenue by 15% and 10% YoY for EMPS and EPS (project/industrial product) divisions respectively. EBITDA margin may see a fast recovery at 7%. Finally, PAT may decline by ~15% YoY to | 91 due to lower other income (down by 15% YoY)
6. Bharat Electronics (BEL): We expect Bharat Electronics (BEL) to report revenues at | 2501.5 crore with decline of 8.8%, YoY with operations inching towards pre-Covid levels while supply chain disruptions will continue to affect execution, to a certain extent. EBITDA margin is expected to decline to 13.2% vs. 19.9% YoY owing to product mix and disruptions, resulting in absolute EBITDA decline of 39.5% YoY to | 329.4 crore. Accordingly, we expect PAT to fall 43.5% YoY to | 191.9 crore. It has completed manufacturing of 30000 ventilators during the quarter while no new order announcement was made as on date for the quarter. Overall, strong order backlog of | 53752 crore is likely to augur well in the long term.
7.Construction of Suzuki Motors Gujarat (SMG) third line at Hansalpur, Gujarat has been completed, with production set to commence from FY22E onwards. The third line will take total SMG capacity to 7.5 lakh units from the present 5 lakh units (with total MSIL capacity improving to 22.5 lakh units). SMG contract manufactures cars for MSIL, with Baleno and Swift forming bulk of present sourcing.
1. Gujarat Gas: Gujarat Gas reported Q2FY21 results which were better than our estimates on all fronts. Revenues were flat YoY to | 2513 crore as sales volume increased 5.5% YoY during Q2FY21. Sales volume was at 9.8 mmscmd while gross margins at | 10.2/scm. EBITDA was | 733 crore, up 97.8% YoY. Subsequently, reported PAT declined 8.2% YoY to | 474.8 crore as company had negative tax outgo in Q2FY20
2.Berger paints: Berger paints reported a healthy performance during Q2FY21 with EBITDA margin and PAT coming in much ahead of our estimates. Revenues, earnings increased by 9% and 14% YoY to ~| 1743 crore and | 221 crore led by sharp increase in EBITDA margin by 350bps YoY to 19.2%
3. Somany Ceramics: Somany Ceramics reported resilient Q2FY21 numbers with sales volumes recovery faster than anticipated. The tiles sales volume was up 2.7% YoY at 12.9 MSM with realisations down 1.9% YoY, possibly owing to sales mix. The overall revenues were up 0.4% YoY. The EBITDA at | 49.4 crore, was up 10.4% YoY, largely driven by cost rationalisation initiatives (employee and other expenses down ~12% YoY) along with benign power & fuel expenses which was down 12% YoY due to lower gas prices. PAT was at | 20.5 crore, up 2.2x YoY, with growth aided by superior operating performance, lower interest costs as well as some one-offs in base quarter.
4. Ashok Leyland: CV maker Ashok Leyland's fortunes are expected to have improved substantially from the previous quarter. However, overall weakness is still seen persisting for Q2FY21E. Total volumes for the quarter were at 19,444 units, down 33% YoY. Product mix remained adverse, with MHCV: LCV ratio at ~40:60 vs. ~58:42 YoY. Consequent standalone net sales for the quarter are seen at | 2,569 crore, down 34.6% YoY. Negative operating leverage is expected to have resulted in loss at EBITDA level of | 138 crore (vs. loss of | 333 crore QoQ) , with loss after tax expected at | 273 crore (vs. loss of | 389 crore QoQ).
5. Voltas: Voltas’s consolidated revenue fall will be limited to ~11% YoY for Voltas led by fast recovery in the UCP division (revenue fall is limited to 10%) with pick up in secondary sales post ease in lockdown restrictions. However, delay in pick-up of construction activities would lead fall in revenue by 15% and 10% YoY for EMPS and EPS (project/industrial product) divisions respectively. EBITDA margin may see a fast recovery at 7%. Finally, PAT may decline by ~15% YoY to | 91 due to lower other income (down by 15% YoY)
6. Bharat Electronics (BEL): We expect Bharat Electronics (BEL) to report revenues at | 2501.5 crore with decline of 8.8%, YoY with operations inching towards pre-Covid levels while supply chain disruptions will continue to affect execution, to a certain extent. EBITDA margin is expected to decline to 13.2% vs. 19.9% YoY owing to product mix and disruptions, resulting in absolute EBITDA decline of 39.5% YoY to | 329.4 crore. Accordingly, we expect PAT to fall 43.5% YoY to | 191.9 crore. It has completed manufacturing of 30000 ventilators during the quarter while no new order announcement was made as on date for the quarter. Overall, strong order backlog of | 53752 crore is likely to augur well in the long term.
7.Construction of Suzuki Motors Gujarat (SMG) third line at Hansalpur, Gujarat has been completed, with production set to commence from FY22E onwards. The third line will take total SMG capacity to 7.5 lakh units from the present 5 lakh units (with total MSIL capacity improving to 22.5 lakh units). SMG contract manufactures cars for MSIL, with Baleno and Swift forming bulk of present sourcing.