Research

Fundamental View:

Mindtree posted robust revenue growth and in-line profitability. Revenue came at USD 226mn, 5.5% QoQ led by digital (45% of rev) growth at 8.3% QoQ.

Management has guided for higher revenue growth/margins in FY19 as compared to FY18. We reiterate our positive outlook on Mindtree based on (1) Strong deal pipeline and deal wins (>60% increase in pipeline and higher win-rate in transformational deals), (2) Strong outlook in top account (9.6% CQGR in last 4-qtrs), (3) Continuity in digital traction (highest YoY growth in last six qtrs) with industry leading digital mix, (4) Recovery in BFSI vertical and top 2 to 10 accounts (26% of rev) ahead, supported by ramp-up of prior deal wins.

Mindtree to add 1,900 freshers in FY19 and currently 27% of employees in 0 to 3 years exp. Band is a debt free company.

Fundamental View:

Heritage Foods is a Fast Moving Consumers Good company engaged in dairy, Retail, Agriculture, Bakery and Renewable Energy. Its principal products/services are milk, value added products and FMCG (food and non-food). The dairy segment mainly deals with procuring milk, processing and selling of milk, value added products, fat products, skimmed milk powder, tradable goods and job work. The retail segment mainly deals with buying and selling of FMCG – Food, FMCG – Non Food and fruits and vegetables. The agriculture segment mainly deals with procuring, processing and selling of fruits and vegetables, tradable goods and job works. The bakery segment mainly deals with procurement, production and selling of bakery products. The Renewable Energy segment mainly deals with generating and supply of solar power and wind power to the diary segment for its captive consumption. It has operations across approximately 10 states in India.

Increasing demand for dairy products is giving and expectation to report net profit of Rs.24.7 crore up 68.2% year -on-year (up 47.8% quarter-on-quarter).

Net sales are expected to increase by 11.5% Y-O-Y (up 34.9% Q-O-Q) to Rs.780.8 Crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 41.8% Y-OY (up 38% Q-O-Q) to Rs.48 Crores.

The expectation of good monsoon prediction by the Metrological Dept. and increasing demand for FMCG products the company is expecting good revenue growth for the company in the next quarter.

Looking at the above conditions , it is a good buy of Heritage Foods at the CMP with a target of Rs.795/- in six months time.

News Updates:
(Sector / Scrip related news)

Fundamental View:
Strong performance in a challenging quarter
1. Yes Bank reported robust growth for the Q4 with better than expected margin.
2. Net stressed loans as of 4QFY18 at 1.73% of total advances (Dec 17 : 2.41% of the advances).
3. Yes bank added 50 branches during the quarter to 1100.
4. Recommended Payment of dividend of Rs. 2.70 per share.
5. Loan & Deposits doubled Y2Y is positive for the bank.
6. Well managed asset Quality is another positve.
Short Term view: Positive
Long Term view: Positive
News Updates:
1. Asset quality performance so far has been significantly better than industry;
bank expect this trend to continue.
2. YESBK has been growing at a much faster clip than the industry’s growth rate.

Fundamental View:

1Greaves Cotton Limited manufactures and sells engines and engine application product in India, the Middle East, Africa, and South-east Asia. It offers lightweight diesel/gasoline engines for automotive engines applications, such as three- wheelers and small four-wheeled commercial vehicles and engines for portable agricultural pumpsets, gensets, small boats, construction equipments and other applications. The company also provides engines for various applications in marine, agricultural equipment, fire fighting pumpsets, mining and construction, material handling, rail cars, road sweepers, etc. In addition, it offers diesel generating sets and trades power tillers, spares related to engines, construction equipments/infrastructure equipments etc.

Short Term view: Positive

Long Term view: Positive