Morning Update – 7th November 2022

SSL Research Morning Update 7 t h November 2022

Equity Market Update

Positive opening likely amid supportive global cues

The benchmark indices on Friday closed on a positive note as Nifty ended with a gain of 0.36% largely supported by
PSU banks and Metal stocks. The broader market though continued to underperform. FIIs net bought Rs 1436 cr
while DIIs net sold Rs 549 cr in the cash market on Friday. The US market on Friday closed sharply higher snapping 4
days of losing streak as strong job data for the month of October reflect the strength of the economy. The Asian cues
are largely in green and hence we expect a positive opening for our market today.
Key Actionables

 Mahanagar Gas: The Company increased CNG price by Rs 3.50 per kg, and domestic PNG price by Rs 1.50
per SCM in its license areas spread in and around Mumbai- Positive for MGL in the short te rm
 Jagran Prakashan: The Company announced Rs 345-crore buyback plan, where it will buy back 4.6 crore
equity shares at Rs 75 apiece via tender offer route. The buyback size represents 17.45% of the company's
total equity shares- Ne utral for Jagran Prakashan in the short te rm
 Mahindra Lifespace D evelopers: The realty firm's sale bookings rose 32% YoY to Rs 399 crore during
September quarter 2022-23 on better housing demand- Positive for Mahindra Life in the long te rm

2QFY 23 Key Result s Today

Jubilant FoodWorks, Aegis Logistics, Arvind, Bajaj Electricals, Bosch, CARE Ratings, Godrej Consumer Products,
Honeywell Automation, Dr Lal PathLabs, Laxmi Organic Industries, Metropolis Healthcare, MRF, NCC, Piramal
Pharma, Shankara Building Products, Sundram Fasteners, VST Industries, and Welspun India.

2QFY 23 Key Result Updates

 B ank of Baroda: Net Interest Income (NII) rose by 34.5% YoY (+15.1% QoQ) to Rs. 10,174 Cr while fees-based
income rose by 12.3% YoY (+18.6% QoQ) to Rs. 1,515 Cr. 2QFY23. NIM improved to 3.4% in 2QFY23 vs. 2.9%
in 2QFY22 and 3.1% in 1QFY23 on domestic advances. Operating profit rose by 6.4% YoY (+ 33.2% QoQ) to
Rs. 6,031 Cr. If it was adjusted for corporate Bond's revaluation post their upgrada tion of account, the
operating profit increased 20.6% YoY (+ 51.0% QoQ) to Rs. 6,839 Cr. Total provisions declined 40.9% YoY (-
3.4% QoQ) to Rs. 1,628 Cr. This was due to 36.4% YoY (+6.0% QoQ) decline in NPA provisions and bad debts
and write offs. As a result, net profits increased at 58.7% YoY (+ 52.8% QoQ) to Rs. 3,313 Cr in 2QFY23.

Global Advances grew at 19.0% YoY to Rs. 8.7 tn while domestic advances grew at 15.0% YoY to Rs. 7.2 tn
while international advances increased at 41.7% YoY to Rs. 1.6 tn in 2QFY23. Retail advances grew at 28.4%
YoY to Rs. 1.6 tn in 2QFY23, largely driven by home loans, auto loans, personal loans, and gold loans etc.
Advances to MSME grew at 13.4% YoY Rs. 1.0 tn while corporate loan book grew at 10.5% YoY to Rs. 3.0 tn
in 2QFY23. The bank largely is exposed to the Infrastructure sector with 14.8% of gross domestic advances
in the quarter, followed by other industrial sector, retail loans, and agriculture and NBFC loans. Nearly 82%
of domestic advances are to A and above rated loans in 2QFY23 vs. 76% it was a year ago.

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 GNPAs declined 22.1% YoY (- 11.8% QoQ) to Rs. 46,374 Cr. in 2QFY23. GNPA ratio declined to 5.3% in 2QFY23
vs. 6.3% in 1QFY23 and 8.1% in 2QFY22. The slippage ratio improved YoY to 1.8% in 2QFY23 vs. 1.7% in
1QFY23 and 3.2% in 2QFY22. Credit cost improved YoY to 0.8% in 2QFY23 vs. 0.8% in 1QFY23 vs. 1.5% in
2QFY22. NNPAs improved to 1.2% in 2QFY23 vs. 1.6% in 1QFY23 and 2.8% in 2QFY22. The Provision Coverage
Ratio (PCR) increased to 91.7% in 2QFY23 vs. 89.4% in 1QFY23 and 83.4% in 2QFY22. Capital Adequacy Ratio
improved to 15.8% in 2QFY23. Currently, the stock is trading at a cheaper forward P/B of 0.7× it's FY25E book
value, If we value BoB at 0.8× it's FY25E book value, we get a TP of Rs. 175 indicating a BUY with a 21% upside

 B ritannia Industries: Q2FY23 profit grows 28.5% YoY to Rs 490.6 crore driven by strong operating
performance & top line. Revenue jumps 21.4% YoY to Rs 4379.6 cr aided by mid-single digit volume growth.
The market share isn now reach to new 15-year high. EBITDA at Rs 711.7 crore for the quarter grew by 27.5%
and margin expanded by 78 bps YoY to 16.25% in Q2FY23. The commodity inflation remained on the boil on
the back of rising inflation in flour and milk products. The company's direct distribution jumped to 26 lakh
outlets, with an addition of 4 lakh outlets in the last 6 months. It now has 28,000 rural preferred dealers,
which has led to consistent market share gains- The stock may re act positive ly in today ’s trade

 Titan Company: The Company has recorded a 30.3% YoY growth in consolidated profit at Rs 835 crore for
the quarter ended September FY23 despite higher input cost, supported by strong operating performance
and top line growth. Total income for the quarter grew by 22% YoY to Rs 9,224 crore with jewellery business,
excluding bullion, saw an 18% YoY growth in revenue to Rs 7,203 crore. Watches and wearables business
revenue increased 21% on year to Rs 829 crore. The eye care business reported a 4% growth in revenue to
Rs 167 crore. Titan net added 105 stores as of September 30. The company's retail chain, including Caratlane,
had 2,408 stores across 382 towns as of September. The management remains optimistic about growth in
the future given the upbeat consumer sentiment- The numbers are in line with street expectations; the stock
may re act positive ly in today ’s trade

 C ity Union BankThe bank reported a 52% YoY growth in profit at Rs 276.46 crore for the quarter ended
September FY23 supported by lower provisions and pre-provision operating profit. Net interest income for
the quarter at Rs 567.91 crore increased by 19% compared to corresponding quarter of last fiscal- Strong
re sult; the stock may re act positive ly in today ’s trade

 InterGlobe Aviation: The IndiGo operator posted loss of Rs 1,583 crore for the quarter ended September
FY23 (including foreign exchange loss of Rs 1,201.5 crore), widening from Rs 1,435.7 crore in same period
last year, as EBITDA fell 33% to Rs 229.2 crore during the same period on higher fuel prices, but revenue
from operations increased by 122.8% YoY to Rs 12,497.6 crore during the quarter- The stock may
underperform in the medium te rm give n the highe r ope rating costs drive n by highe r fue l price s

 TVS Motor Company: The Company has reported a 59.3% YoY increase in consolidated profit at Rs 373.4
crore for the quarter ended September FY23 supported by strong operating as well topline performance.
Revenue for the quarter at Rs 8,561 crore increased by 32% compared to same period last year and EBITDA
rose by 31% to Rs 737 crore during the same period- The numbers are strong and are inline with street
e xpe ctations; The stock may re act positive ly in today’s trade

 Paradeep Phosphates: The 2QFY23 profit tanks 71% YoY to Rs 51 crore impacted by higher input cost.
Revenue jumps 48%. Revenue at Rs 2,863.7 crore for the quarter increased by 48% compared the to year-
ago period- The stock may unde rpe rform in ne ar te rm
Pledg e Share D etails

 Max Financial Services: Promoter Max Ventures Investment Holdings created a pledge of 12.04 lakh shares
between Oct. 29 and Nov. 3.

Insider Trades
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  Maharashtra Seamless: Promoter Group Sudha Apparels bought 40,000 shares on Nov. 11.
 Supreme Petrochem: Promoter Groups Jovial Investment & Trading Company bought 30,000 shares and
Venktesh Investment And Trading Company bought 10,633 shares on Oct. 2.
 D hampur Bio Organics: Promoter Shudh Edible Products bought 1.24 lakh shares between Nov. 2 and Nov.
4.
B ulk D eals
 RateGain Travel Technologies: Plutus Wealth Management LLP bought 10.5 lakh shares (0.97%) at Rs 281.16
per share.

Trading Tweaks / C orporate actions

 Ex-D ate Interim D ividend: Supreme Industries, Supreme Petrochem, REC

 Record-D ate Inter im D ividend: Crisil, Allsec Technologies, Kewal Kiran Clothing

Fund Flows – C ash Market

 FII (Rs cr): +1436.3
 DII (Rs cr): - 548.6

Source: B SE/NSE/Economic Times/Bloomberg Quint/Business Line/Business Standard/Financial Express/Money

control

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