A host of brokerages have given updates on their tracked stocks amid company-specific developments. They included Bharat Dalmia (acquisition of cement assets of Jaiprakash Associates), One 97 Communications (November month business update) and Hindustan Unilever ( focus on ‘Health & Wellbeing’ portfolio), among others. Here’s what analysts said on five stocks namely Bharat Dalmia, Paytm, SBI Card, HUL and Dr Lal Pathlabs.
One 97 Communications (Paytm) on Monday came out with its monthly business update. Foreign brokerage Morgan Stanley said GMV growth remained healthy, though it moderated on a YoY basis vis-Ã -vis last month. Average MTU, it said, was steady and growth sustained at 32 per cent YoY. Loans disbursed of Rs 3,200 crore grew 6 per cent MoM, helped by improving ticket size, it said adding that devices deployed rose to 5.5 million against 5.1 million in October. The brokerage has maintained its equialweight on the stock with a target of Rs 695 a piece.
Motilal Oswal said SBI Card has been reporting a modest performance with a healthy spends momentum, while higher credit cost and lower margins are dragging its earnings. It expects the revolver mix to increase gradually as spends mature, while near-term margin may continue to remain under pressure as borrowing cost increases further. Growth in spends is likely to stay healthy, aiding the overall loan growth. Moderation in ECL will keep credit costs under control, it said.
HUL has signalled its serious intent to build a ‘Health & Wellbeing’ portfolio, JM Financial said. While this may appear to be an ‘extension’ of the earlier Horlicks malted food drinks acquisition, the foray is also a global phenomenon. Unilever has itself acquired 7 such brands over the last 4 years and built a 1 billion euro business therefrom – Equilibra, Smartypants, Liquid IV etc – inline with its strategic priority of focusing on high-growth spaces.
Health & Wellbeing is far more premium in terms of price-point, JM Financial said. The job at hand is to leverage its market development and R&D expertise, distribution might, and at an appropriate time, the global Unilever portfolio to scale and unlock value in what is estimated to be a potential Rs 30,000 crore-segment (4-5 years out). As a start, HUL has acquired two brands (details below) and more M&As could follow, in our view,” it said.
Dalmia Bharat entered into a binding framework agreement for acquisition of the cement assets of Jaiprakash Associates (JAL). Dalmia Cement (Bharat), a wholly-owned subsidiary of Dalmia Bharat, entered into a binding framework agreement for the acquisition of the cement assets of JAL. The assets include cement capacity of 9.4 million tonnes, clinker capacity of 6.7 million tonnes and thermal power plants of 280MW. The said plants are situated at Madhya Pradesh, Uttar Pradesh and Chhattisgarh. The acquisition is at an enterprise value of Rs 5,670 crore. The transaction requires requisite approvals from lenders/JV partners of JAL and regulatory authorities.
Nuvama interacted with Om Manchanda, MD of Dr Lal Pathlabs to gain insights into the company’s strategy and outlook. The management expects two more quarters before Dr Lal Pathlabs attains stable growth trajectory. Garnering market share in the rest of India’s markets and suburban integration remain key, Nuvama said.
