Shree Cement (NS:SHCM): We maintain our ADD rating on Shree Cement, with an unchanged SOTP target price of INR 28,700/share. Cement volume growth slowed to 8% YoY as it lost four days of sales due to software migration to SAP. Reported unit EBITDA (cement) remained flattish QoQ at INR 1346/MT as lower input costs and lower advertising expenses offset the impact of a 6% QoQ NSR decline (ex-power). Shree expects 10-13% volume growth in FY25. Management highlighted they are working on various initiatives which are not disclosed now, so the company will positively surprise shareholders. The current cement capacity of 56MT (including 3mn MT Guntur expansion at April-24 start) will increase to 62/75mn MT by FY25/27 end. It targets 100 RMC plants in the next 4-5 years.
Oberoi Realty (NS:OEBO): Oberoi Realty (ORL) registered presales of INR 17.7bn (-30%/125% YoY/QoQ), largely backed by sales from Elysian new tower, contributing 64% of presales. Moreover, 360W saw a good amount of traction in Q4FY24/FY24 with 3/8 units being sold. With competing partner inventory getting exhausted, ORL expects to sell out the entire ~INR 50bn own inventory over the next 24-30 months. Pokhran launch is now expected during the Q3FY25 festive season, with approvals in place and show apartment ready. Commerz 3 saw leasing progressing well with >51% of the area being leased to Morgan Stanley (NYSE:MS) and by FY25-end, lease occupancy should reach ~80-85%. Borivali Mall is expected to become operational by Oct 2024, with a rental potential of INR 3.5bn. ORL expects all assets including hospitality to clock INR 18bn of NOI from FY26/27E. In terms of Business Development (BD), ORL closed the Worli Adarsh Nagar society redevelopment with a 0.6mn sq. ft. carpet area. Considering ORL's potential premium pricing, we expect the GDV of the project to be around INR 50bn with the FY26 launch. Given the expected robust cash flows from ready-to-move-in inventory in the 360W and Mulund projects along with new BD, we remain constructive on ORL and maintain BUY, raising our TP to INR 1,833/sh.
Apollo Tyres (NS:APLO): Apollo Tyres’ consolidated revenue at INR 62.6bn (flat YoY/-5.1% QoQ) was below our estimate, dragged by the India business. While the exports and replacement segment reported strong growth, it was offset by a double-digit decline in the OEM volumes. The European business revenue grew 3% YoY to €182 mn. With a higher share of the UHP in the product mix (47% in Q4FY24, vs 43% in 4QFY23), Europe business EBITDA margin improved 103bps YoY to 19.1%. The capex spent for FY24 (INR 7mn) was significantly lower than previously guided (INR 11bn). There was a capex pullback considering the tough market conditions. The company has maintained a cautiously optimistic outlook for the India business in FY25, with growth expected from the passenger car segment and commercial vehicles segment. The European business is expected to perform better than FY24, aided by a better product mix and cost optimization. The impact of higher material costs and EPR is expected to be mitigated through calibrated price hikes. With the passenger vehicle industry expected to grow in the mid-single digit in FY25 and CV cycle recovery expected only in 2HFY25, we maintain REDUCE with a revised TP of INR510/sh (from INR 520 earlier)—valued at 14x March 26 earnings.
Radico Khaitan (NS:RADC): Radico Khaitan’s 4QFY24 results were below our estimates as Prestige & above (P&A) volume growth momentum (14% YoY) moderated during 4QFY24 vs performance seen in the first 9MFY24 (22% vol growth YoY). Incrementally, weak realization growth (1% YoY) during 4QFY24 further added to the woes courtesy unfavourable product and state mix. Management guided that a margin expansion is likely to be back-ended (hinted towards 15%+ EBITDA margin in FY26) as (a) the company utilizes in-house manufactured ENA, (b) salience has improved in premium products, and (c) grain prices are softer. Although 1QFY25 volume performance is likely to be subdued owing to the elections, management expects performance to improve from 2QFY25 and has guided for 15-18% volume growth for Prestige and above segment in FY25. We maintain our REDUCE rating with a TP of INR 1,520 (40x FY26 EPS).
NCC (NS:NCCL): NCC reported in-line performance in Q4FY24, with revenue/EBITDA/PAT beat of 10.2/1.9/2.8%. With an order inflow of INR 272.8bn during FY24 (vs. guidance of INR 260bn+), OB as of Mar’24 stands at INR 575.4bn (~3.1x FY24 revenue). On the back of this robust OB, NCC has given FY24 revenue growth guidance of 15%. EBITDA margin guidance stands at 9.5-10%. Given the election season, NCC expects new order inflows at INR 200-220bn (25% decline YoY). Owing to the robust collection, NCC recorded 76 days of NWC during FY24 (vs. 103 days in FY23) and gross/net debt at INR 10/5.2bn. Gross debt is expected to reduce to INR 5bn by FY25 end. Given the all-time high order book, execution ramp-up, and robust balance sheet, we recalibrate FY25/26E estimates. We increase our TP to INR 317/sh (16x Mar-26E EPS). We maintain our BUY rating on NCC.
Clean Science and Technology (NS:CLEA): We maintain SELL on Clean Science and Technology (CSTL) with a price target of INR 1,041 (WACC 11%, terminal growth 6%), owing to (1) slower-than-expected ramp-up in hindered amine light stabilizers (HALS) and (2) entry of domestic competitors in mono methyl ether of hydroquinone (MEHQ) manufacturing. We believe CSTL has an import substitution opportunity in HALS. However, the upcoming capacity augmentation in HALS by competitors and muted demand growth shall remain challenges to growth in HALS revenue. EBITDA and PAT shall grow at a 23/23% CAGR over FY24E-27E. Q4 EBITDA was -4% below our estimates while PAT was 7% above our estimates owing to higher-than-expected other operating expenses while revenue remained in line with our expectations.
V-MART Retail (NS:VMAR): Our thesis on bottoming out of V-Mart KPIs seems to be playing out namely – (1) paring down of Limeroad losses, (2) profitability improvement led by closure of non-performing stores, and (3) recovery in footfalls/sales density. Revenue grew 12.6% YoY to INR6.69bn. Core V-MART operations grew 12% YoY to INR5.49bn (HSIE: INR5.54bn). Q4/FY24 SSSG came in at 6/1%. Footfalls/sales densities grew 8/3% YoY. EBITDA loss reduced to INR 116mn (HSIE: INR134mn, Q4FY23: INR245mn). Inventory days reduced to 107 (vs. 129 in FY23). We largely maintain our FY25/26 EBITDA estimates (-1.5/-2.5%) and maintain our BUY rating on VMART with a DCF-based TP of INR2,560/sh (implying 23x FY26 EV/EBITDA).
Sagar Cements (NS:SGRC): We maintain our ADD stance on Sagar Cements (SGC), with a lower TP of INR 215/share (7.5x its Mar-26E consolidated EBITDA). In Q4FY24, SGC volume grew only 19/15% YoY/QoQ (aided by the ramp-up of production by new plants). NSR declined 8% QoQ owing to weak pricing in the South. Opex declined 4% QoQ, owing to the decline in fuel cost. Thus, unit EBITDA declined by INR 200/MT QoQ to INR 422/MT (up INR 135/MT YoY). Management trimmed FY25E volume guidance to 6.5mn MT (+18% YoY) vs 7mn MT guided earlier. It plans to expand cement capacity by 1.5mn MT by FY26-end to 12mn MT. Sagar expects fuel costs to reduce INR 100/MT QoQ in Q1FY25. By FY25 end, it plans to sell the entire Vizag plant land, which will strengthen the balance sheet.
Somany Ceramics (NS:SOCE): We maintain BUY on Somany Ceramics (SOMC), with an unchanged target price of INR 980/share (25x Mar-26E consolidated PE). Consolidated revenue/EBITDA/APAT grew 9/30/13% YoY. Tiles sales volumes rose 7/20% YoY/QoQ (5-yr vol CQGR: 4%). Blended NSR was down 2/1% YoY/QoQ owing to higher incentive to dealer. The non-tiles revenue rose 15% YoY (5-yr CQGR: 9%), boosting consolidated performance. Consolidated EBITDA margin expanded 120/180bps QoQ/YoY to 10.8%, while Kajaria Ceramics’ margin declined 160/70bps QoQ/YoY for the same quarter. SOMC expects low-double-digit revenue growth in FY25. Management doesn’t expect a further decline in the tile’s price. It is aiming for a 100-150bps improvement in EBITDAM in FY25. It has no major expansion in the pipeline, apart from 3.5MSM tiles manufacturing capacity in Nepal expected by H2FY26 (delayed by a year).
Click on the PDF to read the full report: