NOCIL Ltd
Brokerage firm Sharekhan has said in its research note that “NOCIL report robust Q1FY23 results with consolidated Q1FY23 revenue at Rs. 509 crore (up 47.7% y-o-y; up 10% q-o-q), which was 8% above our estimates of Rs. 473 crore on account of 9% beat in sales volume to 15,251 tonnes (up 16% y-o-y; up 11% q-o-q). Blended realisation of Rs. 334/kg (down 0.9% q-o-q) was largely in line with expectation of Rs. 337/kg. EBITDA margin improved by 20% y-o-y (down 17% q-o-q) to Rs. 67/kg and was significantly above our estimate of Rs. 57/kg led by higher-than-expected gross margin at Rs. 155/kg (up 19.5% y-o-y and 9% above our estimate) and benefit of operating leverage (sharp volume growth). Margins declined sequentially due to exceptionally higher margins in Q4FY22. Consequently, operating profit/PAT at Rs. 103 crore/Rs. 66 crore, up 39%/40% y-o-y and 29%/36% above our estimate supported by strong volume and margin performance."
“We believe that the strong growth outlook for tyre industry and resilient price environment would result in volume/margin-led earnings growth. NOCIL is a play on import substitution and China Plus One strategy by global customers and the same would drive market share gains with improved financials. Valuation of 19.4x/17.1x FY23E/FY24E EPS is attractive considering our expectation of a sharp 1.5x rise in earnings over FY22-24E and improvement in RoE to 16% (versus 12.9% in FY22). Hence, we maintain a Buy on NOCIL with an unchanged PT of Rs. 348," said the research analysts of Sharekhan Ltd.
Jubilant Foodworks Ltd
Sharekhan has said in a note that “Jubilant Foodworks Limited (JFL) posted robust performance in Q1FY2023. Revenue growth stood at 41% y-o-y to Rs. 1,240.3 crore, aided by like-for-like growth of 28.3%. During the quarter, dine-in and takeaway channels combined witnessed strong sequential growth, while momentum continued in the delivery channel. Despite raw-material pressure, gross margin declined marginally by 52 bps y-o-y to 76.7%, while EBITDA margin improved by 49 bps y-o-y to 24.6%, aided by store-level efficiencies and improving output per store. EBITDA and PAT grew by 44% and 81% y-o-y, respectively. The company took 8-10% price increase in its portfolio to mitigate raw-material inflation. During the quarter, JFL added 58 Domino’s stores and two stores each of Popeyes and Hong’s Kitchen. On the international front, Domino’s Sri Lanka reported strong revenue growth of 83% y-o-y, while Domino’s Bangladesh reported revenue growth of 49% y-o-y in Q1FY2023."
“We like JFL’s strategy of investing in the core and new ventures to scale up business growth and revenue without comprising on profitability in the medium term. The company’s brand-wise differentiated strategy, aggressive store additions, improving customer experience on delivery platform, sustained innovation, and customer-centric offerings will drive growth in the medium-long term. The stock has corrected by 18% from its recent high and currently trades at 59.7x/41.4x its FY2023E/FY2024E earnings. We maintain our Buy rating on the stock with an unchanged price target (PT) of Rs. 675," said the broking firm Sharekhan.
SBI Life Insurance
The brokerage firm ICICI Securities has said in a note that “SBIL’s share price has grown by ~44% over the past three years. We believe strong growth guidance supported by distribution strength (SBI YoNo added now) and improving high margin product mix should aid overall value. The stock is reasonably priced and currently trades at 2.5x FY24E Embedded Value. We retain our BUY rating on the stock. We value SBIL at ~2.7xFY24 EV still lower than HDFC Life and revise our target price from ₹1400 to ₹1500 per share."
Launch of an annuity product, tie-up with new fintechs to aid growth, 25%+ growth guidance in NBP to reflect positively on overall performance, VNB margins set to rise with higher protection mix and improving persistency and healthy solvency to aid operating metrics are the essential signals of future price performance for the shares of SBI Life, as per ICICI Securities.
SBI Life recorded a 17.78% year-over-year (YoY) growth in net profit for the June quarter, coming in at ₹262.85 crore vs ₹223.16 crore in the same period the previous year. In Q11FY23, the gross written premium (GWP) increased by 35% YoY to ₹11350 crore, and the VNB margin increased by 665 bps YoY to 30.4 per cent.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
