Kotak Insti India Daily 19th July: Results - Axis Bank, DB Corp, Mindtree; Results, Change in Reco - TCS, Bajaj Finserv; Updates

Results

Axis Bank: Mixed performance continues

l No change in key metrics; asset quality stress rising steadily l Strong capital, healthy liability profile driving our rating despite headwinds in business l Headwinds remain: Loan impairment and pressure on revenue growth

DB Corp: The stars align

l 1QFY14 results analysis: Whatever happens when all the stars are aligned l Growing in strength: BUY with 12-month forward FV of Rs300 (Rs280 previously)

Mindtree: Good headline, internals could have been better

l Good headline numbers, excellent pick-up in revenue growth l Internals could have been better; cash generation disappoints l Consistent growth in IT services is impressive; we expect it to continue. Maintain ADD

Results, Change in Reco

TCS: Lack of alternatives, solid execution; upgrade to ADD

l Delivers yet again; cash flow generation not as good l Good environment or bad, TCS delivers l Rupee to the rescue, lack of alternatives could push up P/E multiple; upgrade to ADD

Bajaj Finserv: NBFC posts strong performance; upgrade to BUY

l Valuations attractive, upgrade to BUY l General insurance: Higher earnings despite lower underwriting profits l Stable earnings in life insurance, low conservation ratio is a concern

Company alerts

Larsen & Toubro: Cautious takeaways from AR2013

l EBITDA margin propped by provision reversals; FX loss buffer exists but may not benefit in FY2014 l Contracting customer advances raise execution concern; higher debtors further put Wcap. pressure l Management sees a few bright spots in dull macro; focus on cash and current yield l Subs: Weak toll collections, both for old and new projects; large loss taken in forging, shipbuilding l Broadly maintain estimates; retain ADD on reasonable valuations

Godrej Consumer Products: AR analysis: Costly growth or platform for the long-haul?

l Domestic business steady, IBD revenue growth led by acquisitions l Margins paint a different picture, significant spike in advertising and sales promotion l Balance sheetRoE deterioration continues, FCF negative yet again l We retain our REDUCE rating; choppy IBD margins, rich valuations are cause for concern

JSW Energy: Annual Report analysis: Commissioning complete, focus on operations

l Sharp improvement in operational performance yields three-fold jump in net income l Capex commitments largely behind us, working capital increases by Rs11 bn l We retain our ADD rating though highlight JSW Energy's vulnerability to Rupee depreciation

Sector alerts

Telecom: RCOM slashes 3G data pricing by 50%

l The event - RCOM announces 50% cut in 3G data pricing l The nub - cut on expected lines, directionally, even as the extent is a bit of a surprise l The impact - modest immediate negative if incumbents follow; we don't see RCOM gain much

��

-->