Narayana Hrudayalaya Ltd | Q2FY24 Result Update | India business to drive strong growth… CMP: Rs 1,134 | Target Price: Rs 1,334 | Upside: 18% | Rating: BUY Narayana Hrudayalaya (NARH) exceeded our expectations due to strong revenue performance in both the Indian and Cayman operations during Q2FY24. This was driven by improvements in ARPOB and increased foot traffic in both Inpatient (IP) and Outpatient (OP) services. The growth prospects for the India business appear promising, thanks to anticipated advancements in case mix, enhanced throughput, and a reduction in ALOS. With minimal greenfield capital expenditure expected, except for the Kolkata project, the India business has additional potential to elevate EBITDA margins to 25%-26% by FY25, compared to the current 23%. In the Cayman Islands, the recently established oncology unit played a key role in boosting foot traffic and enhancing ARPOB. We anticipate a continued upward trajectory in overall group margin. Looking ahead, growth will be fueled by a structural rebound in foot traffic at flagship hospitals, where the company is streamlining capacities. Combined with improvements in case mix, this is expected to result in an 21% CAGR in EBITDA from FY23 to FY26E. With increased clarity on enhanced ARPP and a robust performance in the Indian business, we are revising our EV/EBITDA multiple for the Indian segment to 20x, up from the previous 19x, aligning it with industry peers. In the Cayman Islands, the operational oncology unit has commenced patient treatments, and an additional block is slated to be introduced in Q1FY25, contributing to sustained revenue growth in the future. On an overall basis, the growth prospects of Narayana look good. We have a BUY rating with a target price of 1,334 per share. Strong performance due to growth in ARPOB and patient footfalls • In Q2FY24, India business reported revenue growth of 14.7% YoY and 6.7% QoQ to Rs. 10,527 Mn. The growth was mainly due to 7.6% growth in inpatient volume which were at 64,000, while OP footfalls were 685,000, growth of 11.7%. • ARPOB for India business witnessed growth of 10.7% YoY to Rs. 36712 with occupancy level of 60%. However, ARPOB was flat on sequential basis whereas we believe occupancy improved by 900 bps from 51% in Q2FY24. • Cayman business recorded revenue of 12.7% YoY and 5.7% QoQ to Rs. 2,607 Mn. This was mainly due to improvement in ARPOB by 9.5% YoY and incremental revenues from addition of oncology unit. • ARPP for IP in Cayman was USD 34,100 in Q2FY24 which has witnessed decrease of 13.2% YoY. Outlook & Valuation Anticipating positive performance in both Cayman and India operations moving forward, we expect improvements in patient mix and case mix, leading to a rise in EBITDA. The turnaround of previously loss-making facilities and the maturation of recently established hospitals are expected to be key drivers of EBITDA growth. Additionally, a higher surgical mix and enhancements in payor mix are poised to contribute further to overall growth. Due to healthy return ratios as compared to peers and steady growth in India business, we value India business at 20x and Cayman at 14x (EV/EBITDA with respect to Sep 2025E EBITDA to arrive at a target price of Rs 1,334. Buy.

Apollo Hospitals Enterprise Ltd | Q2FY24 Result Update | Hospitals business to drive growth CMP: Rs 5,223 | Target Price: Rs 5,810 | Upside: 11% | Rating: Accumulate Q2FY24 results were mainly in-line with our estimates. Hospitals revenue grew 12% YoY (Volume growth of 4%, price and case mix led another 8%) and EBITDA grew by 11% YoY. The overall occupancy for hospitals was at 68% vs 62% Q1FY24, aided by a robust increase in patient flows across hospitals. A robust 14% growth in ARPOB is driven by significant contributions (63%) from Cardiac, Onco, Neuro, Nephro, Gastro, and Ortho services. Anticipated growth in international patients' revenue aims to increase their contribution to 10% by FY24, up from the current 6-7%. The hospital business foresees a potential 100 bps yoy margin expansion in the next two years, fuelled by improved payor mix and cost optimization. The Pharmacy distribution segment registered a growth of 22%YoY with revenues of Rs. 17.1 bn during the quarter due to increased patient’s base. There has been 32% reduction in EBITDA losses in Q2’ FY24 (Rs 387 Mn) vs Q1’ FY24 (Rs 566 Mn) on account of reduction in digital operating cost and increase in operational revenue coming from Pharmacy distribution. Management guided, this segment will break-even in Q3’ FY24 pre-ESOP and post ESOP in Q4’ FY24. Apollo plans to add 2860 beds by FY27 with capex of Rs.32 Bn, contributing to revenue growth. The pharmacy distribution business aims for a Rs. 32 billion GMV in FY24 due to an expanding customer base. With anticipated declines in the losses of the 24*7 diagnostics business, EBITDA margins are expected to improve in the future. The next leg of growth will come from 1) Addition of Beds in hospital segment with further improvement in payor and case mix 2) Significant growth in GMV 3) Expansion of offline pharmacy stores (500-600 stores addition in FY24) 4) Cost optimization, reduction in losses of 24*7. On an overall basis, we are positive about the prospects of Apollo. We retain accumulate rating on the stock. Decent topline growth lower losses from digital business led to improved margins • The company registered revenue growth of 14.0% on YoY basis and 9.7% on QoQ basis to Rs. 48.4 Bn. This was mainly due to higher growth Pharmacy distribution which has witnessed growth of 17% YoY, whereas hospitals revenue grew 12% YoY to Rs. 25.4 Bn. • EBITDA margin for Q2FY24 decreased by 35 bps YoY but increased by 142 bps QoQ to 12.9%. The sequential improvement was due to 30% reduction in losses of Online Pharmacy. • Occupancy across the group was 68% in Q2FY24. ARPOB was Rs 57,391 in Q2FY24 as compared to Rs 50,353 in Q2FY23 registering growth of 14%. ALOS was 3.26 days. • Healthcare services posted an EBITDA margin of 24.9%, Pharmacy has margin of -2% (after adjusting for 24x7 operating costs) and AHLL—9%. Outlook & Valuation We hold a positive outlook on Apollo's future, driven by favourable demand dynamics. We anticipate strong performance in both healthcare services and the pharmacy segment. Furthermore, we anticipate AHLL to achieve remarkable outcomes. Based on SOTP valuation we arrive at target price of 5,810 (implied EV/EBITDA multiple of 22 on its Sep 2025E EBITDA), offering 11% upside from current levels. Accumulate.

I G Petrochemicals Ltd. | Q2FY24 Result Update | Demand weakness persists, Downgrading to REDUCE CMP: Rs 444 | Target Price: Rs 440 | Downside: 1% | Rating: REDUCE The company reported a very weak operational performance. Revenue de-grew by ~12% YoY & ~10% QoQ. Sequential decline is largely led by lower volumes owing to shutdown taken for change of catalyst. Shutdown led to 10% dip in volumes during the quarter. Gross margins contracted by steep 850bps YoY & 444bps QoQ to ~18% in Q2FY24. The decline in gross margins was because of lower spreads of PAN-Ox & lower MAN spreads. Market spreads of PAN-Ox stood at $80-100/ton in Q2FY24 vs $100-150/ton in Q1FY24. Inching up of non phthalic business revenue share to 15-25% of revenues by FY27E (vs ~7% of H1FY24 revenue) might provide some stability in the margins which remains a key factor of company’s further expansion in downstream derivatives of non phthalic businesses. The company would witness volume growth largely from Q1FY25 post expansion of its 53,000 tonnes PA 5 plant. The company has also stated its intent to venture into new businesses like green chemicals, ethanol derivatives, CBG etc however specific details has not been shared. Currently lower PAN-Ox spreads, demand uncertainty & declining MAN realization are a cause of concern. The concerns might continue H2FY24E, hence, we downgrade to REDUCE rating from earlier ACCUMULATE rating on the stock. Flattish volumes for FY24E, demand weakness & lower Pan-Ox spreads a concern • The current capacity of PAN is operating at peak utilization levels which leaves no scope for volume growth in H2FY24E. Plus, lower PAN-Ox spreads would lead to lower operating profit. However, for FY25E & FY26E we are modelling in ~10% volume growth each & de-bottlenecking of plasticizer to support volumes in FY26E. • In Q2FY24, company undertook shutdown for catalyst change which impacted volumes by 5,000-6,000 tons which will normalize in the coming quarter. Contraction in gross margins on YoY & QoQ basis mainly due to decline in PAN-Ox spreads, might remain at the lower end unless material uptick in demand is witnessed • The company reported gross margin contraction of 850bps YoY & 444bps QoQ to 18% in Q2FY24. The margin contraction was due to decline in the spreads of PAN-Ox. • For the quarter, the market spreads stood at ~$100/ton. We anticipate that spreads might remain in the same range in H2FY24E unless material uptick in demand is witnessed. Factors like inventory re-stocking, improvement in pigments demand & robust exports market might have positive effect on the spreads, which would largely be visible in H1FY25E. • Management believe that PAN-OX spreads average between $150-250/ton in the long term, considering wider applications of PAN in end user industries. Valuation • We introduce FY26E estimates & value the stock on Sept 25E earnings. Currently, the stock is trading at Sept 25E P/E of ~9.1x. We maintain our forward multiple of 9x on Sept 25E EPS of Rs ~49, thereby, arrive at target price of Rs 440 per share which offers downside of ~1% from current valuations. • There, we downgrade to REDUCE rating from ACCUMULATE rating on the stock.

Galaxy Surfactants Ltd | Q2FY24 Result Update | Strong volumes pickup, limited room for upside, Downgrade to ACCUMULATE CMP: Rs 2,935 | Target Price: Rs 3,103 | Upside: 6% | Rating: ACCUMULATE The company reported nearly in line revenue numbers growing by 4.4% QoQ & dip of ~21% YoY. Volumes reported high single digit growth of 9.8% YoY & 9.7% QoQ. Realizations witnessed steep decline on YoY & QoQ basis because of weak demand in international markets. Gross spreads declined by 15% YoY & 8% QoQ to Rs ~47.5 per kg & EBITDA spreads per kg declined by 14% YoY & 8% QoQ to Rs ~19 per kg in Q2FY24. Overall major export geographies like US & Europe remain weak with uptick visible in AMET markets. Going ahead with subsiding inflation & increasing personal expenditure is likely to continue volume momentum. Also, Galaxy’s has expanded capacity to cater to increasing demands of large MNCs, local & regional players. We forecast performance & speciality volumes both to rise by ~8-8.5% during FY23-26E. High single digit volume momentum along with pickup in export market would lead to Galaxy generating ~13% EBITDA margins & ~16% ROCE by FY26E. Near term pain in some international market is transitory and the same is expected to resolve in the coming quarter. The company’s long-term outlook is bullish considering the FMCG premiumization undertaken by large MNCs in a bid to supply high quality products to its customers. Since our recent initiating coverage report, the stock price has witnessed ~11% rise, which reduced the room for upside. We maintain our 27x P/E on Sept 25E EPS and arrive at Rs 3103 per share and downgrade to ACCUMULATE rating from earlier BUY. Robust volume growth, gross spreads weakened further because of weak international markets • The company reported volume growth of high single digit of 9.8% YoY & 9.7% QoQ. Performance segment reported high single digit growth & speciality segment reported double digit growth because of pickup in masstige segments. High end speciality volumes is still muted. • Domestic market continues to remain robust with double digit growth & pickup in premiumization. AMET market reported high single digit growth despite higher inflation as consumers adapted to changing environment. Other markets like US, Europe remained weak with low single digit growth. Increasing product portfolio in speciality will increase greater visibility in international markets • The company has launched several new grades in the speciality and performance surfactants with milder, safer, non-toxic, bio-degradable in nature. • In Q2FY24, the company has added 1 new patent which has increased its approved patent count to 91 and applied for another 16 global patents. • Increasing number of patents has helped in improving its product mix within the specialty care portfolio and thereby higher margins in the recent years. • This has led to a consistent increase in the product basket from 109 products in 2009 to now close to 216 products with new products like sulphate-free cleansers (Galsoft GLI 21), UV filters (GalShield UV Care Plus), waterless cleansing formulations (Galsoft Tils (G)) in the recent years. Valuation • Since our recent IC report, the stock price has witnessed ~11% rise, which reduced the room for upside. The stock is currently trading at 25.6x on Sept 25E EPS. We maintain our forward P/E multiple of 27x and arrive at target price of Rs 3103 per share which offers upside of ~6% from current levels. Therefore, we downgrade to ACCUMULATE rating from earlier BUY rating.

Fortis Healthcare Ltd | Q2FY24 Result Update | Beds expansion to drive revenue growth CMP: Rs 369 | Target Price: Rs 450 | Upside: 22% | Rating: BUY Fortis delivered results above estimates. This was mainly due to strong revenue growth in hospital segment steady growth in diagnostic business which is continuously seeing signs of improvement. The EBITDA margins for the hospital business has seen a marginal improvement due to higher occupancy (despite weak rainy season) and 12% YoY growth on ARPOB to Rs.60,548. International business has seen strong growth of 16% YoY and it now contributes 8.3% to the total revenue. Anticipated progress in the hospital business remains robust, fuelled by efforts to enhance capacity, refine case mix, and elevate the ARPOB. Concurrently, the company is dedicated to optimizing costs and streamlining its hospital portfolio by divesting underperforming units, a strategy poised to enhance future profit margins. We expect 17% CAGR in revenue from FY23- FY26E, attributed to heightened hospital occupancy resulting from expanded bed capacity and an improved case mix, consequently boosting ARPOB. Over the next 3-4 fiscal years, approximately 1500 beds will be added, excluding those in Manesar and Shalimar Bagh. Occupancy rates are anticipated to rise from 68% in FY23 to a range of 70%-75% by FY26E. Meanwhile, Agilus diagnostics business (formerly SRL) is displaying initial signs of stabilization and navigating a challenging industry landscape. On overall basis, we are positive about the growth prospects of both Hospitals and Agilus, and accordingly we recommend an "Buy” rating on the stock. Hospital business boosted by increased ARPOB and improved occupancy • In Q2FY24, hospitals business witnessed growth of 12% YoY and 7.3% on sequential basis to Rs 12,970 Mn mainly due to increase in ARPOB which saw growth of 11.8% YoY and was flat on QoQ basis at Rs. 60,548. • International patient revenues grew 16% YoY to Rs. 1,270 Mn in Q2FY24.Revenue contribution for the same was 8.3% to hospital revenues as compared to 8% and 8.5% in Q2FY23 and Q1FY24 respectively. • EBITDA margins for the hospital business expanded by 20 bps YoY and by 320 bps QoQ to 18.4%. EBITDA in the quarter was Rs. 2,677 Mn. Diagnostic business continues to witness degrowth We expect that the Diagnostics business gross revenues increased 2.2% YoY to Rs 3,170 Mn versus Rs 3,102 Mn in Q2FY23. Revenue was grew 4.6% on sequential basis. It is expected that the number of test increased by 1.8% YoY at 10.15 Mn test in the quarter Despite this growth, the average realization rate is expected to remain unchanged on YoY basis, resulting in subdued revenue growth. Outlook & Valuation Both the Hospitals business and Agilus should perform robustly in the future. We have valued the Hospitals business at 18.5x on Sep 2025e EV/EBITDA and the Diagnostics business (SRL) at 18x to arrive at a Target Price of Rs 450. This provides an upside of 22% with respect to the current market price. Accordingly, we recommend a “Buy” rating on the stock.

Eicher Motors Ltd| Q2FY24 Result Update | Reiterating – competition will take long time to hit structurally, upgrade to BUY! CMP: Rs 3,542 | Target Price: Rs 4,101 | Upside: 15.8% | Rating: Buy Q2FY24 Revenue/EBITDA/PAT is higher than estimates by ~1%/4%/10% respectively. Reported highest quarterly Revenue/EBITDA/PAT and EBITDA per unit with strong FCF generation (Rs 16.1bn, +63% YoY). Margins are sustainable as exports situation to improve in H2, no major pain visible in commodities, along with VAVE & operating leverage benefits. Domestic demand is improving and festivals reporting healthy ~14% like-to-like growth. In our view, RE will be able to deal with the competition due to the combination of 1) healthy new product pipeline, 2) recent launches Himalayan & Bullet received noble response, 3) reach & smart expansion of the network, 4) eight strong existing brands (more to come), 5) service network, and 6) bikers community will be able to withhold competitive pressures for the initial few years. We strongly believe that the market itself is expanding, but new global competitors have the power to slow down Royal Enfield’s growth. Maintain 23x multiple, upgrade EPS by 4%/4% in FY24/FY25 respectively driven by margin surprise in Q2. Roll-over from Mar 2025 to Sept 2025 with a revised fair value of Rs 4,101. Upgrade from Accumulate to Buy. Q2FY24 result analysis – higher than estimates due to better operational performance  The result is above our estimates, reported highest ever quarterly Volumes/Revenue/EBITDA/PAT/EBITDA per unit in Q2FY24. Generated strong FCF of Rs 16.1bn in H1FY24, higher by 63% YoY.  Realization increase (+~6% YoY to ~Rs 179K) is largely due to pricing action & mix, the increase is despite drop in export sales (-~21% YoY to ~19.5K units).  EBITDA Margin at 26.4% is higher by 68bps than our est. is on account of higher than expected benefits of commodity softness & mix, offset by a higher increase in Other expenses (+12% QoQ).  Overall, the reported PAT at ~Rs 10.2bn is higher than estimates by ~10% due to better operational performance and lower effective tax rate.  There was a one-off non-recurring income of Rs 500mn sitting in Other income line item. It relates to grants received from the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT). Hence, Adj. PAT is Rs 9.67bn, higher by 5% than our estimates.  VECV PAT matched our estimates of ~Rs 1bn. RE has strong positioning, not expecting a major share loss in the foreseeable future  Royal Enfield dealers have not witnessed any cancellations post Harley/Triumph launch, and inquiries/bookings run-rate continues to remain healthy. Festivals are going well in retails. New models from RE will be able to handle the competition effectively.  However, a few dealers indicated that some customers are trying X440, and once the HD dealer network expands effectively, and service network usage clarification comes then over the period Royal Enfield’s sales growth will taper down.  Our view is that in this competitive environment, it’s not possible for any automobile brand to hold on to a 90%+ market share for a long time. However, post some share loss in the mid-term, RE will still hold the lion’s share in the 350cc+ segment.  We strongly believe that the market itself is expanding in the 350cc category. As per our checks with HD dealers, they are getting some upgraders not only from RE, but also from Pulsars/Apache/H’ness as well. Hence, new breed, young crowd is getting pulled towards 350cc segment. Competitors will take time to eat RE’s share due to strong existing/new products & reach  Harley/Triumph are globally aspirational brands, however RE’s existing eight brands, strong new upcoming distinguished products and its premium stores reach in the semi-urban zones (in total 2,017 touch points), along with strong fan base will keep the competitors at a bay.  There are structural changes happening in the upper

Global Health Ltd (Medanta) | Q2FY24 Result Update | Empowering Success: Where Operating Leverage Takes Centre Stage CMP: Rs 906 | Target Price: Rs 1,018 | Upside: 12% | Rating: Accumulate Medanta experienced strong and sustained growth across all its clusters (GHL, Patna and Lucknow). ARPOB grew by 4.8% YoY to Rs. 61,003 in Q2 FY24 driven by increase in tariffs at Gurgaon unit and growth in Lucknow and Patna. Despite weak season in the quarter, the company’s occupancy increased to 65% in Q2FY24 as compared to 59% in Q2FY23. Medanta plans to add 50 beds in Patna and 120-150 beds in Lucknow in FY24, it further plans to add 100 beds in Gurgaon unit. Management is further confident of operationalizing Noida facility in 2 years’ time leveraging its healthy balance sheet & operating cashflows. Going ahead EBITDA margins would expand 1) due to benefits of payor mix in Lucknow, the company has 100% cash and insurance patients 2) Expansion of beds capacity as 1000-1500 beds will be added over a span of 2 years 3) operating leverage playing out as Medanta has in-house doctors, and large facility of more than 500 beds in single location which will result in EBITDA CAGR growth of 27% from FY23-FY26E. We upgrade our EV/EBITDA multiple by 10% to 23x (21x earlier) due to strong margin expansion and significant volume growth at both mature and new hospitals. We value the stock at 23x EV/EBITDA on FY25E EBITDA and arrive at a target price of Rs 1018 per share, translating into an upside of 12% and hence, we retain Accumulate rating on the stock. Strong revenue growth aided by ARPOB growth • Revenue increased 24.3% YoY and 9.2% QoQ to Rs 8,439 mn. This was mainly due to increase in inpatients admission which saw increase of 19.4% YoY to 42,000 in Q2FY24. Out-patient volume increased by 23.2% to 728,000. • ARPOB (Rs. 61,003- growth of 4.8% YoY) and Occupancy levels (65% in Q2FY24 vs 59% in Q2FY23) increased by 600 bps due to volume growth in Lucknow and Patna hospitals. • EBITDA for the quarter saw robust growth of 36% YoY and 19.7% on sequential basis to Rs. 2,129 Mn, whereas EBITDA margin was at 25.2% which witnessed expansion of 216 bps YoY 221 bps on sequential basis. • Mature hospitals revenue has seen 20% YoY growth to Rs. 6,064 Mn with 7.2% improvement in ARPOB from Rs. 58,896 in Q2FY23 to Rs. 63,132 in Q2FY24, whereas EBITDA margins has improved from 22.9% in Q2FY23 to 25.5% in Q2FY24. The developing hospitals reported revenue growth of 40% to Rs. 2,643 Mn with ARPOB increase of 0.5% from Rs. 56,823 in Q2FY23 to Rs. 57,082 in Q2FY24. Outlook & Valuation With strong execution in new hospitals, we raise the multiple of Medanta at 23x (21x earlier) due to 1) operating leverage due to doctor led model (most of peers are facing inflationary pressure to high talent acquisition cost) 2) 70% of capex in existing territory thereby leading to lower capex/bed 3) continued ramp up in Lucknow and Patna facility 4) continuous improvement in return ratios despite heavy capex. Thereby, we arrive at target price of Rs. 1018 per share which offers upside of 12% from current valuations. Accumulate.

HealthCare Global Enterprises Ltd | Q2FY24 Result Update | Unlocking Operational Leverage for Margin Expansion CMP: Rs 375 | Target Price: Rs 440 | Upside: 17% | Rating: Buy HealthCare Global Enterprises (HCGEL) continued to register the highest ever quarterly revenues and EBITDA due to growth in both new and matured centres. The new centres continued their scale-up trajectory with strong revenue growth of 28.7% YoY and 7.7% QoQ while existing HCG centres registered a growth of 12.5% YoY and 4.9% QoQ. ARPOB have been steadily increasing and has seen growth of 13.9% YoY. Anticipating a 200-300bps EBITDA margin enhancement in the next 6-9 months. Fuelled by double-digit revenue growth, consolidation of NCHRI Nagpur's operations, improved payer mix, and the maturation of new centers contributing to ARPOB growth. We are optimistic that HCG has the potential to enhance its profitability through a synergy of initiatives focused on enhancing operational efficiency, refining pricing strategies, optimizing cost frameworks, and elevating the fertility business and new centers' performance. Taking all factors into consideration, our outlook on HCGEL is favorable. We retain our “Buy” rating on the stock. Sustained increase in topline driven by the growth of ARPOB • HCGEL demonstrated robust top-line growth in Q2FY24, with the resulting operating leverage extending to improved EBITDA and PAT figures. Revenue on a YoY basis witnessed robust growth of 15.9% YoY and 5.7% QoQ due to improvement in ARPOB (13.9% growth and case mix improvement- increased chemo sessions). • ARPOB was at Rs 42,054 for Q2FY24 as compared to Rs 39,686 for Q1FY24 and Rs. 36914 in Q2FY23. Overall ARPOB improved by 13.9% due to improvement in case mix. The chemo sessions administered in the quarter has witnessed growth of 12% YoY and 19% QoQ to 38,000 sessions. • The employee cost, medical consultancy expenses and others costs have witnessed a sharp increase of 15-18% in the quarter due to investment in LINAC in 3 which have become operational in the quarter. These expenses are expected to normalize in coming quarters. The existing hospitals had an EBITDA margin of 23.9% while the new centers have EBITDA margin of 10% in the quarter. • The number of IVF cycles for Milann in Q2FY24 was 465 as compared to 473 in Q2FY23, but has seen growth of 12.3% QoQ. The company is scaling down its losses and has closed one centre in Delhi. Milann recorded revenues of Rs 177 Mn in Q2FY24 which has seen growth of 7% YoY. Outlook & Valuation We hold an optimistic view on the potential of HCGEL. Both the existing and newly established centers are expected to exhibit strong performance in the future. We expect EBITDA CAGR of 16% from FY23-FY26E. As the emerging centers would move closer to mature centers, the EBITDA margins would improve from 17% in FY23 to 19-20% in FY26. We value the stock at 15x EV/EBITDA with respect to Sep 2025 EBITDA to arrive at upwardly revised Target Price of Rs 440. The stock of the company is trading near our earlier given target prices. We maintain our “Buy” rating.

Nitin Spinners Ltd | Q2FY24 Result Update | New capacity commissioned on time, Growth path is clear CMP: Rs 300 | Target Price: Rs 380 | Upside: 27% | Rating: Buy Nitin Spinners Ltd (NSPL) came out with a decent performance in a tough business environment during Q2FY24. Recent capacity addition led to ~46%/~44%/~56% growth in sales/EBITDA/PBT on YoY basis. Reported PAT was up ~9% YoY as now the company is paying full tax. The company had adopted new tax regime in FY23 onwards and the effective tax rate was very low on account of remeasurement of liabilities in FY23. Slowdown in the US market and geo-political situation in the European region are still posing challenges and due to soft demand, profitability is still far from normal levels. With continued 90%+ utilization, even on expended capacity basis, in yarn and woven fabric segments and some recovery in knitted fabric business, sales performance was strong despite subdued realization. A major portion of new capacity is already commissioned, and rest portion will be on stream by Nov’23. All this will support growth 2HFY24 onwards. With cotton prices stabilising at current rates and expectation of demand recovery, we believe QoQ performance would improve. Considering continued pressure on profitability levels, we have toned down our earnings estimates. Maintain BUY rating with target price of Rs380 per share, 9.5xSept’25e EPS. Decent performance in a challenging environment • During the quarter, the company posted a growth of 32.8% QoQ at Yarn sales volume front as utilizations remained at elevated levels even on expanded capacity. Knitted fabric sales volume promised some recovery with a sequential growth of ~51% on low base. • Woven fabric business remained strong with its sales volume grew by 5.4% QoQ/~50% YoY. With economic activities back on track post covid, demand for woven fabric remains good. • With correction in cotton prices, realization moderated further. Realization in Yarn/Knitted Fabric/woven fabric segments were down by ~5%/5%/2% QoQ. Textile demand should be on track, capacity addition to propel medium term growth • The Indian textile industry has been facing tough times due to a slowdown in demand in the international market. Demand in the domestic market is also subdued. • Indian cotton prices have stabilized at low levels, but yarn prices also corrected a lot and industry is reeling under lower profitability. Not much capacity is getting added in spinning industry and hence pricing comfort should be there in the future. • Capex plan of Rs9.5bn is almost fully executed. 2500 MT/PA knitted fabrics and 10 mn Metres woven fabric got added during Q4FY23. With full commissioning of 1.5 lakhs spindles by Nov’23, yarn capacity will be enhanced from 75,000 MT to 1,10,000 MT. Valuation and risks • With new capex, Nitin Spinners growth path is clear from here till FY25. • We assign slightly higher multiple 9.5x PE multiple to Sept’25E earnings (earlier 8.5x) as new capacity is already commissioned and arrive at a target price Rs380 per share, offering ~27% upside from current levels. BUY.

Mayur Uniquoters Ltd | Q2FY24 Result Update | Good margin continues, set for a respectable growth path FY25 onwards CMP: Rs 519 | Target Price: Rs 624 | Upside: 20.1% | Rating: Buy Saved by strong domestic auto market, Mayur Uniquoters came out with a decent performance in Q2FY24 amid labour strike in the US auto market and BIS related issues in the footwear business. With PVC price stabilization, the company maintained its margin performance, above 20%. The management highlighted many growth levers especially at auto exports front where they have got good order indication for the next several years. With Chinese imports continuing, PU front issues continue, and Mayur is in talks with several brands to propel this business. We rolled over our valuation multiple to Sept’25E EPS and maintain BUY rating on Mayur Uniquoters with a slightly upgraded TP of Rs 624, as the company is expected to get traction in higher margin business clients. Mayur is set to get good amount of new businesses from Ford, Mercedes and BMW in coming years. With volume recovery in footwear, the ramp up of PU plant and businesses from new clients such as VW, Mercedes, and BMW, we expect a much stronger performance from FY25 onwards. Decent operational performance during the quarter, better performance Q4FY24 onwards  Standalone revenue came in at Rs 1,816mn, a small de-growth of 6.6% YoY / 5.4% QoQ, tad lower than our estimates. BIS related issues in the footwear market and labour strike in the US auto market hurt the performance.  Good performance in the Indian auto market was a saving grace and the management highlighted that they would cover up the lost business in the US auto market in H2FY24. Margin has been stabilized above 20%  EBITDA stood at Rs 376mn, with a margin of 20.7% during the quarter compared to 17.3% in Q2FY23 and 20.1% in Q1FY24. Decline in the PVC prices is helping at Gross margin level and the company was able to maintain decent margin.  At consolidated level in Q2FY24, the company has posted sales of Rs 2,029mn, down 0.6% YoY and PAT of ~Rs 324mn, up 19.3% YoY. Guidance cut for FY24 but strong growth expected FY25 onwards  The management continues to indicate that export OEMs business to multiply when businesses from new clients reach to guided levels by clients.  Considering the business impact due to BIS related issues and labour strike in the US market, management has lowered down its guidance for FY24 and guided for ~10% growth (earlier 12%-15%) in FY24 with better traction in H2FY24.  Start of BMW business and ramp up of Mercedes business will boost margins going forward. As per management, BMW business will start kicking in Q4FY24 onwards. Outlook and Valuations  Besides working on high margin export business, the management is focused on the increasing presence at retail front. They are onboarding dealers across India to increase brand visibility.  The management is confident of ~10% sales growth in FY24 and hinted for further higher double-digit growth to continue FY25 onwards.  We have cut both FY24e and FY25e earnings by ~4% considering some business impact due to near term issues mentioned earlier and slow traction in the PU business.  We have introduced FY26e projections and rolled over our valuation multiple to Sept’25E EPS. Considering BS strength and consistent handsome payouts to shareholders, we value Mayur at 18.0x Sept’25e earnings to arrive at fair value of Rs 624 apiece and maintain BUY.