![]() ![]() While the management highlighted the lagged impact of asset-side re-pricing (175bps hike in LHPLR during FY23 so far) on margins, we argue that LICHF is likely to continue disappointing on the margins front in an increasing interest rate environment in light of continued elevated competitive intensity. AUM growth was muted (+10.4% YoY), with disbursals growing at ~4% YoY, as the developer portfolio continued to shrink. Asset quality witnessed marginal deterioration, with the stressed pool (GS-II + GS-III) staying flat despite high write-offs. NIMs dropped sharply QoQ to 1.8% (Q1FY23: 2.54%) due to a sharp rise in funding costs (+40bps QoQ) and the impact of converting select prime home loans from fixed-rate to floating-rate loans. LIC Housing Finance: LICHF reported a disappointing performance, with P&L outcomes significantly below our/consensus estimates. KNR Constructions: KNR delivered a strong quarter, with revenue/EBITDA/APAT of INR 8.3/1.6/0.8bn beating our estimates by 1/(2)/(9)%. We reiterate BUY, with an unchanged TP of INR 632/sh. Given BEL's strong cash position of INR 19bn, a robust business development pipeline, and a healthy balance sheet, we remain constructive. At full occupancy, the annual exit rental will be INR 7.5-8bn. The segment is expected to receive an impetus with the implementation of the DESH bill. The leasing segment is robust with 1msf leased in 9MFY23 and 1.44msf of the active pipeline. The hospitality segment is doing well again with all metrics above pre-COVID levels the monetisation plan is back and BEL is in the preliminary stages of discussions with investors. In terms of BD, it has added INR 17bn worth of GDV (INR 2bn commercial and INR 15bn residential, both in Bengaluru) and an additional 75-acre land earmarked for mixed-use in 9MFY23. BEL has a total of 1.4msf of plotted development in its land bank. The average realisation dropped sequentially by 1.3% on account of 0.4msf of plotted development presales and, on account of new phase launches of the same project, the realisation will remain affected in Q4FY23 and Q1FY24. For FY23, the company expects to clock total presales of INR 40bn on the back of 2.5msf of new launches planned for Q4FY23. For 9MFY23, presales stood at INR 26bn (+31% YoY). EBITDAM contracted 264bps YoY.īrigade Enterprises: Brigade Enterprises Ltd (BEL) reported presales of 1.5msf (+40%/+28% YoY/QoQ), valued at INR 10bn (+48%/+27% YoY/QoQ), beating our estimate of INR 9bn. However, with aggressive expansion comes costs. The F&G format Star is finding its bearings too and improving its value proposition/sales density. Zudio's blitz scaling continues to be the big needle-mover. Westside's strong growth was SSSG-heavy (23%). Both flagship formats (Westside/Zudio) fired. ![]() Standalone revenue grew 75% YoY (4-year CAGR: 33%) to INR20.8bn. Trent: Trent continued its stellar topline growth. Maintain ADD on TECHM with a reduced TP of INR 1,060, at 15x Dec-24E EPS based on 14% EPS CAGR over FY23-25E. Higher payout (dividend yield >5%) and >4% FCF yield will support TECHM's valuations (16x FY24E vs. The continued decline in T5 accounts and muted commentary on the communication vertical (TECHM's largest vertical) by peers remain concerning. The structural improvement in margins over the medium term remains the big catalyst for rerating (low probability currently). In an environment with fewer supply-side concerns, the room for TECHM to improve margin is significant, supported by growth recovery (SG&A leverage) and levers of sub-con, offshoring and business mix. acquisition playbook earlier) with less than three quarters remaining for CEO transition. ![]() TECHM continues towards the organic growth focus (vs. FY23 revenue growth of 10.1% is expected to moderate to 4.3% in FY24E before recovering to 9.8% in FY25E. Growth in Q4 was led by the CME vertical, which was offset by a sequential decline in the enterprise segment (retail and transport). Tech Mahindra: Tech Mahindra (TECHM) delivered soft yet in-line revenue and deal intake, but a lower-than-expected margin in Q4FY23. ![]()
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