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DCB Bank (DCBB) posted a strong all-round 4QFY18 performance with a ~22% yoy PAT growth (Rs 642mn, EE Rs 607mn), 29% yoy loan growth and better asset quality (GNPA/NNPA improving to 1.8%/0.7% on lower slippages at 1.7%). While core fee income grew by a strong 40% yoy, NIM (calc.) contracted 8bps qoq.
FY19E growth could be better than FY18 as large verticals except retail are recovering while industry-specific tailwinds and largedeal TCV could aid.
Retain ADD with a SOTP based Mar’19 TP of Rs 190 (Rs 195 earlier) set at 2.5x FY20E ABV.
Volumes across the segments are robust and posted the yoy growth on the back of low base of 4QFY17 post demonetization and rural demand.
Our recent meeting with the Eicher Motors (EIM) management suggests that Royal Enfield (RE) is seeing good traction in its newly-launched Thunderbird X – a fact also corroborated by our channel checks.
Our recent interaction with 2W dealers across 6-7 states reveals that demand remains good, barring in some rural pockets of Maharashtra which have been hit by low sugarcane prices. HMCL continues to aggressively eye market share gains in scooters, with discounts still on in many states after price cuts in Jan’18-beginning.
We recently met the management of Dilip Buildcon (DBL) to get a perspective of the company’s business and future strategies. We also visited its Lucknow-Sultanpur HA project to gauge the company’s execution capabilities.
We tweak our FY18/FY19 EPS estimates by +1%/+4% and assign ADD to the stock (from REDUCE earlier); our Mar’19 TP of Rs 710 (700 previously) is set at a 25x TTM EPS of Rs 29.
Cadila Healthcare’s (CDH) stock has corrected by ~10% over the last three months due to delays in key approvals (gPrevacid ODT, gToproletc) and fears of earnings plateauing out in FY20We are thus comfortable with our EPS assumptions. Maintain LONG with a Jun’19 TP of Rs 444 set at 20x P/E.
Gujarat State Petronet (GSPL) has announced the acquisition of an additional 28.4% stake in Gujarat Gas (GGAS) from unlisted parent, GSPC. Post this, GSPL will become the sole promoter of GGAS with a ~54% stake.