Rajesh Exports [RJEX_IN; Rs.163 billion/US$2.01 billion market cap; US$2.62 million total average daily value traded] reported stellar results, ahead of our expectations, both in terms of revenues as well as profits, for the fiscal fourth quarter [ended March]. The performance continues to beat expectations as growth in the previous quarter was also solid. Revenue increased significantly by 35% YoY to a record high level of Rs.1154 bn as compared to Q4 FY2022.

Lux Industries Ltd | Q4FY23 Result Update | Robust volume growth in Q4FY23, margins impacted CMP: Rs 1,510 | Target Price: Rs 1,607 | Upside: 6% | Rating: Accumulate Lux Industries Ltd. (LUX), reported results for Q4FY23 were below our expectations on EBIDTA & PAT mainly due to lower gross margins. Revenues in Q4FY23 increased by ~21.9% YoY, led by volume increase of ~30% YoY. In FY23 company reported volume decline of ~2% YoY. Volumes in FY23 were impacted due significant volatility in raw material prices. Gross Margins were impacted in FY23 due to consumption of high cost raw material inventory. Since raw material prices are now stable, we do not expect any significant inventory related loss in FY24e. There has also been improvement visible in the sentiments of the distribution channel. We expect performance of the company to improve fom Q2FY24 onwards led to stability in raw material prices. Sales volumes in Q1FY24 may be impacted due the impact of channel re-stocking done by the distribution channel in Q4FY23. We remain positive on Lux’s mid to long term growth prospects for its strong brand equity and long-standing operations in the innerwear industry. We maintain our “Accumulate” rating on the stock. FY23-Key Earnings Highlights • In FY23, the company reported sales growth of ~3.6% YoY, with a volume decline of ~2% YoY. Average selling price increased by ~5.8% YoY. • Gross margin in FY23 declined by ~803 bps YoY to ~29.3% on account of volatility in raw material prices and impact of inventory loss due to high cost inventory. • In FY23 company reported EBIDTA margins of ~9% vs ~20.6% YoY. EBIDTA margins were impacted due to lower gross margins, lower absoption of overheads & increase in advertisement expenditure. • PAT for FY23 declined by ~58.2% YoY to ~Rs 1.42 bn. PAT Margin was at ~6% vs ~14.8% YoY. Continued focus on power brands Company aims to strengthen its market share in its legacy and power brands like Lux Cozi, Lux Venus, Lux Inferno, Lux Cottswool, Lyra and ONN among many others. To achieve the same, company has repositioned some of these brands and has rolled out targeted ad campaigns along with elevated business operations across India. Company has engaged celebrity Jacqueline Fernandez for promoting its products under the brand Lux Cozi. Lux Venus has been re-branded and re-launched with Mr Salman Khan being onboarded as the brand ambassador. Management believes that these marketing initiatives should help the company in gaining further traction in the market. Outlook and Valuation: • We believe, company is well-poised for growth on the back of stability in raw material prices, increasing share of premium products (mainly Lyra and ONN), new product launches and growing retail & online presence. • We have valued the stock at 15xFY25e EPS of Rs 107.1, to arrive at a target price of Rs 1607 and maintain our “Accumulate” rating on the stock.

Bodal Chemicals Ltd | Q4FY23 Result Update | Greenshoots of revival witnessed, recovery will be slow paced, Upgrade to BUY CMP: Rs 65 | Target Price: Rs 78 | Upside: 20% | Rating: BUY The company reported subdued operational performance. Revenue de-grew by 35% YoY but grew by 21.5% QoQ. Sequential growth is largely led by higher production of dye-intermediates & chlor alkali segments. Dye-intermediates & chlor alkali business on QoQ basis recorded growth of ~16% & 54% in volumes in Q4FY23. Dyestuff business continue to remain weak with volumes dipping by 9% QoQ. Demand witnessed revival as compared to last quarter led by inventory re-stocking & opening up of international markets. Gross margins contracted by 117bps YoY & 599bps owing to higher RM prices, however, the silver lining is some major raw material prices have softened which will support the operating margins in the coming quarters. The legacy business dye-intermediates and dyestuffs will continue to witness volatility led by China factor & rebound of demand in international markets and because of this the company is now foraying into newer businesses which would insulate itself from majorly depending on sectors like textiles, dyes etc. We feel the company has seen major downturns in the last 3-4 quarters because of weakeaning of demand in textiles and other allied sectors, and the same if normalized alongwith commissioning of newer businesses will drive the growth going ahead, and therefore we upgrade to BUY from earlier ACCUMULATE rating on the stock. Demand improved sequentially but meaningful recovery is along affair • The dye intermediates business improved sequentially led by recovery in demand but dyestuffs business remained weak owing to slow exports of textiles, leather & dyes. • The global demand has started to pickup showing signs of greenshoots in demand but the recent issue of Turkey earthquake will slow the recovery going ahead majorly in dyestuffs. • We feel the pain is mostly in the numbers and improvement should be visible from the coming quarter but meaningfully it should recover from H2FY24 which seems to be a long affair. Major subsidiaries continue to report profits, is a positive sign • The Turkish subsidiary Sener Boya has reported revenue decline of 55% YoY to Rs66.2mn in Q4FY23 owing to earthquake issues impacting production. However, on the operating profit the business has reported profits of Rs1.4mn in Q4FY23. • Apart from Sener Boya, other subsidiaries like Bodal-China also reported profits of Rs12.9mn in Q4FY23. Valuation • The company’s major end users are textiles, leather, dyes & pigments wherein demand had weakened in the last few quarters and is now anticipated to rebound in the coming quarters led by inventory re-stocking, exports market pickup & easing of commodity prices. But the turkey earthquake is still exerting pain on exporters of textile dyes manufacturers which might slow the recovery in demand. However, bodal has seen the weakest phase of demand uncertainity, geopolitical issues and with things starting to normalize and improve we feel the best quarters lie ahead of the company. • We value the stock on PE multiple of 12x FY25E projections and arrive at a target price of Rs 78 per share which is an upside of ~20% from current levels. Therefore, we upgrade to BUY rating from earlier ACCUMULATE rating on the stock.

Greenply Industries Ltd | Q4FY23 Result Update | Ramp-up of MDF plant-A key future growth driver CMP: Rs 156 | Target Price: Rs 167 | Upside: 7% | Rating: Accumulate Greenply Industries Ltd. (Greenply) reported Q4FY23 PAT came below our estimates. Company reported consolidated sales of ~Rs 4.69 bn up ~4.6% YoY & ~9.6% QoQ. Plywood segment reported volume growth of ~1% YoY in Q4FY23. Average selling prices (ASP) for plywood business in Q4FY23 was at ~Rs 246/sqm up ~3.4% YoY. PAT in Q4FY23 was impacted due to loss of ~Rs 166 mn incurred in the JV due to loss on disposal of certain assets. In FY23 company reported volume growth of ~15% YoY in the plywood segment. Going ahead company has maintained a positive outlook on the plywood industry driven by on-going recovery in real estate sector and consumer shift towards branded products. Management has guided for ~10-12% plus volume growth in the plywood business for next 2-3 years with improvement in margins. We expect Sales/EBIDTA/ Adj PAT CAGR of ~15%/21%/16% over FY23-FY25e driven volume CAGR of ~7% in plywood business and ramp-up of MDF plant. FY23 Earnings Highlights • Greenply reported consolidated revenue of ~Rs 18.45 bn up ~18% YoY, driven by volume growth of ~15% YoY in plywood business. ASP increased by ~4.7% YoY in plywood segment. • Company reported EBIDTA of ~Rs 1.69 bn up ~12.5% YoY. EBIDTA margins declined by ~45 bps YoY mainly led by decline in gross margins due to increase in timber prices. • Company’s Adj PAT for FY23 stood at ~Rs 914 mn down by ~3.5% YoY. PAT for FY23 was impacted due to loss of ~Rs 208 mn incurred in the JV due to loss on disposal of certain assets. Ramp-up of MDF plant Greenply has forayed into the MDF business to diversify its revenue and capitalise on the growing demand for MDF. Company has setup up a greenfield manufacturing plant at Vadodara, Gujarat with a capex of ~Rs. 6 bn with an installed capacity of 800 CBM/day with revenue potential of ~Rs. 6 bn/p.a. Company has started commercial production from May 2023. Management aims to achieve capacity utilisation of ~40-45% in Year-1 (ie FY24e) & further increase to ~75%-80% in FY25e. Management expects to reach the optimum capacity utilisation level by FY26e. Valuation Greenply’s strong brand presence, well established distribution network and product portfolio offering at varied price points; improving dealer’s network and healthy demand would support sales growth. Company’s foray into the high growth MDF segment will benefit in the long run by substantially improving its growth trajectory. Thus, we have valued the stock at 18x FY25E EPS Rs. 9.3 to arrive at a target price of Rs. 167 per share and maintain our “Accumulate” rating.

Dollar Industries Ltd | Q4FY23 Result Update | Growth pillars in place driven by project Lakshya CMP: Rs 355 | Target Price: Rs 465 | Upside: 31% | Rating: BUY Dollar Industries Ltd (DIL), reported weak performance in Q4FY23, which was even lower than our estimates. In Q4FY23 company reported volume growth of ~37% YoY, led by increased sales volume in the economy segment. Revenue in FY23 increased by ~3.8% YoY led by volume growth of ~5.5% YoY. Sales and margins in FY23 were impacted due to huge volatility in raw material prices & higher advertisement expenditure. Gross margins in Q4FY23 & FY23 declined on account of consumption of high cost inventory. Since the raw material prices have now stabalised in a range company does not expect any further inventory related loss in FY24e. There has also been improvement visible in the sentiments of the distribution channel & thus management has guided for a topline growth of ~12%-13% YoY in FY24e with EBIDTA margin in the range of ~11%-12%. We expect performance of the company to improve from Q2FY24 onwards due to stability in raw material prices. Sales in Q1FY24 may be impacted due the impact of channel re-stocking done by the distribution channel in Q4FY23. We remain positive on the company’s mid-to long term potential and thus maintain our ‘Buy’ rating on the stock. FY23 Earnings Highlights • In FY23, the company reported sales increased by ~3.8% YoY, volumes increased by ~5.5% YoY. Average selling price declined by ~2% YoY. • Gross margin FY23 declined by ~457 bps YoY to 29.6% due volatility in raw material prices and impact of inventory loss due consumption of high cost inventory. • EBITDA margin for FY23 declined to 7.0% vs 16.4% YoY. EBIDTA margins were impacted mainly due to lower gross margin and higher advertisement expenditure. • PAT for FY23 declined by ~64% YoY to Rs 525 mn. Tax rate was lower at ~18.5% vs 25.6% YoY. Project Lakshya on track DIL is working with Vector Consultants to implement Theory of constraints (TOC), in an attempt to keep a tab on its working capital mainly by reducing receivables and inventories. Company has enrolled ~229 distributors upto FY23 (87 distributors in FY23) under the project Lakshya and target to bring ~70% of its distributors under project Lakshya by FY25. Company has also on-boarded ~270 distributors (~120 distributors in FY23) under channel financing by the end of FY23. Management has maintained its goal to reach sales of ~Rs 20 billion by FY25. Outlook and Valuation • DIL’s strong brand recall coupled with deeper penetration and consumers shifting towards affordable branded quality products are strong macro tailwinds for the company. Currently the innerwear industry is witnessing a structural shift from unorganised to the organised sector. We expect DIL to benefit from this trend. • We have valued the stock at 20xFY25e EPS of Rs 23.3, to arrive at a target price of Rs 465 per share and maintain our “Buy” rating.

Apollo Hospitals Enterprise Ltd | Q4FY23 Result Update | Hospitals business to drive growth CMP: Rs 4,623 | Target Price: Rs 5,220 | Upside: 13% | Rating: Accumulate Q4FY23 saw decline in occupancy levels for the mature and new hospitals of Apollo as company has reduced its institutional business, but it has improved the case mix leading to growth in ARPOB. The patient mix will improve going forward as international patients’ revenue contribution will increase to 10% by FY24 from current levels of 6-7%. The hospital business may see margin expansion of 100 bps yoy in next two years, led by improved payor mix and cost optimization. The Pharmacy distribution segment registered a growth of 31%YoY with revenues of Rs. 17.9 bn during the quarter due to increased patients base and digital initiatives taken. The hospital business is poised to deliver superior growth in the next 1-2 years through better asset utilisation and increase in ARPOBs led by price hike. Apollo is on track to add 2000 beds by FY27 which will aid the revenue growth. The pharmacy distribution business will see increase in GMV to Rs. 15 bn is FY23 and Rs. 32bn in FY24 due to increased customer base. Since, the losses of 24*7 diagnostics business is expected to decline, the EBITDA margins would see improvement going ahead. 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 (700 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 and we assign “Accumulate" rating on the stock. Decent topline growth but higher expenses led to decline in margins • The company registered revenue growth of 21.3% on YoY basis but was flat on QoQ basis to Rs. 43 Bn. This was mainly due to higher growth from hospitals and Pharmacy distribution segment which has witnessed growth of 18% and 31% YoY. • EBITDA margin for Q4FY23 decreased by 172 bps YoY and 51 bps QoQ to 11.3%. This was mainly due to higher losses from Apollo 24*7 which dragged the overall profitability. • Occupancy across the group was 65% in Q4FY23. ARPOB was Rs 53,232 in Q4FY23 as compared to Rs 45,327 in Q4FY22 registering growth of 10%. ALOS for Q4FY23 was 3.41 days. • During the quarter, Healthcare services posted an EBITDA margin of 24.4%, Pharmacy has margin of -3% (after adjusting for 24x7 operating costs) and AHLL—9.6%. • Mature hospitals delivered EBITDA margin of 27.1% (from 24.3% in Q4FY22) while new hospitals delivered margin of 18.1% from (16.6% in Q4FY22). Outlook and Valuation: We are positive about the prospects connected with Apollo due to favourable demand. Both the healthcare services and pharmacy including 24x7 should perform robustly in the future. AHLL should also report superior performance. Based on SOTP valuation we arrive at target price of 5,220 (implied EV/EBITDA multiple of 22 on its FY25E EBITDA), offering 13% upside from current levels. Accumulate.

Global Health Ltd. | Q4FY23 Result Update | New hospitals continue to drive growth CMP: Rs 595 | Target Price: Rs 642 | Upside: 8% | Rating: Accumulate Medanta has experienced good growth due to ramp up in Patna and Lucknow facilities. Additionally, the base business has also shown improvement in terms of EBITDA, indicating that the doctor led model is leading to operating leverage. Improvement in overall occupancy will be key driver for Medanta’s overall EBITDA as there is big room to grow further. Management is further confident of operationalizing Noida facility in 2 years’ time leveraging its healthy balance sheet & operating cashflows. The matured hospitals witnessed revenue growth of 12.3% YoY to Rs. 20,211 Mn whereas the developing hospitals witnessed revenue growth of 83% YoY to Rs. 7,426 Mn in FY23. Going ahead EBITDA margins would expand 1) due to benefits of payor mix as in Lucknow and Patna, 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 which will result in EBITDA CAGR growth of 21% from FY23-FY25E. We assign 19x EV/EBITDA on FY25E EBITDA and arrive at a target price of Rs 642 per share, translating into an upside of 8% and hence, we assign Accumulate rating on the stock. Strong revenue growth aided by ARPOB growth • Revenue increased 35% YoY and 1.3% QoQ to Rs 7,034 mn. This was mainly due to increase in Inpatients admission which saw increase of 32% YoY to 33,834 in Q4FY23. Out-patient volume increased by 15.4% • ARPOB (Rs. 60,880- growth of 7.5% YoY) and Occupancy levels (58% in Q4FY23 vs 54% in Q4FY22) have shown improvements at the group level. • EBITDA for the quarter reported robust growth of 104% YoY and 2% on sequential basis to Rs. 1,631 Mn, whereas EBITDA margin was at 23% which witnessed expansion of 782 bps YoY and 15 bps QoQ. This was mainly due to higher revenue. Positive EBITDA contribution from Patna hospital and higher EBITDA from Lucknow hospital is another reason for high margins. • Mature hospitals have shown 13% improvement in ARPOB from Rs. 55,804 in Q4FY22 to 63,053 in Q4FY23, whereas EBITDA margins has improved from 18.7% in Q4FY22 to 24.7% in Q4FY23. The developing hospitals reported ARPOB decrease of 6% from Rs. 59,846 in Q4FY22 to Rs. 56,194 in Q4FY23. Outlook and Valuation: • Currently, the stock is trading at comforting valuation on FY25E EV/EBITDA of 16x. We value the stock at 19x (in line with its peers such as KIMS and Narayana) due to capacity and geographical expansion, higher ARPOB and robust revenue growth, thereby, arrive at target price of Rs. 642 per share which offers upside of 8% from current valuations. Therefore, we assign Accumulate rating on the stock.

Suprajit Engineering Ltd| Q4FY23 Result Update | LDC turned around, new products showing strong traction. Accumulate! CMP: Rs 389 | Target Price: Rs 445 | Upside: 14.2% | Rating: Accumulate Revenue/EBITDA matched near our estimates, while EBITDA Margin was healthy & above estimates. PAT was lower than estimates mainly due to lower than expected other income (MTM) & higher effective tax rate. FY24 outlook is promising, and the next few years looks to be in a good shape. While, some muted performance (temporarily) anticipated for the non-auto division due to global macro challenges. The margin improvement journey will continue and a band of 12-14% maintained for FY24. Suprajit has been working with all top five 2W EV OEMs for new products, and is confident that new products to add substantial growth in the next five years. Suprajit's fair value comes to Rs 445 per share (21x FY25e EPS), recommend ACCUMULATE. Healthy order book & winning share in core businesses  Auto cables: Suprajit has been winning new orders from domestic & export clients, and aftermarket traction continues to remain healthy. This is despite flattish 2W OEM demand, and mostly order wins is from high realization PV cables in India & globally.  Non-Auto: Margin performance was exceptionally well as a change in the strategy of making in Unit 9 & exporting globally is a success. A mid-single digit volume growth is anticipated as people in the US are cutting discretionary spends, however, order pipeline is healthy.  Phoenix: Strong outlook for domestic, exports & aftermarket with expectation of near double-digit margin in the coming years. Winding down ‘Trifa' should curtail a lot of costs & benefit will be visible in the mid-to-long term. LDC and new products to drive mid-to-long term growth  LDC: The revenue & margin improvement trajectory is clearly visible, we believe it will be able to achieve its guided $100mn revenue in FY24 with high single digit EBITDA Margin.  New products: Working with all top five 2W OEMs for its high realization new products, the response is commendable and orders in hand should drive growth in the mid-term. It will provide new avenues of growth and support Suprajit to diversify & grow beyond cables. The realization & margins are much higher than a normal cable. Reasonably attractive valuations, recommend ACCUMULATE!  Suprajit’s historic year-on-year outperformance is noticeable. We believe apart from strong growth visibility in its traditional business, LDC’s global reach and new products from Suprajit Technical Centre will be new growth drivers for mid-to-long term.  Its trading at 18.4x FY25 estimated EPS of Rs 21.2. Assigned 21x to FY25e EPS to arrive at a fair value of Rs 445 per share. Due to recent run-up in the stock price, the stock is downgraded from BUY to ACCUMULATE. More or less our estimates remain the same.

NOCIL Ltd | Q4FY23 Result Update | Robust pick up in volumes, Maintain ACCUMULATE CMP: Rs 214 | Target Price: Rs 229 | Upside: 7% | Rating: ACCUMULATE NOCIL reported mixed set of results with subdued gross margins & healthy operating margins during Q4FY23. Revenue de-grew by ~15% YoY & grew by 20.6% QoQ. Sequential growth is largely because of stronger volumes which grew by 26% QoQ. Realization witnessed decline sequentially because of higher supply & moderate demand. Pickup of international markets like Europe & Asia aided volume growth. Despite gross margin witnessing contraction by 952bps YoY & 546bps QoQ, EBITDA margins expanded by 108bps QoQ owing to lower employee and other expenses in Q4FY23. We anticipate pickup in volumes from the coming quarters but increased competition from imports could be a near term concern which could impact its EBITDA spreads for the near term. Although, the long-term growth story remains positive for NOCIL, owing to tyre players expanding capacity which leads to increased usage of rubber chemicals, still competitive intensity is set to increase with competitors ramping up capacity (For instance. China Sunshine recently completed 30,000 TPA anti-oxidant capacity addition & planning another 20,000 TPA accelerator capacity addition by end of 2023) could spoil the party for NOCIL. We continue to maintain ACCUMULATE rating on the stock. Gross margin contracted sequentially, EBITDA spreads largely stable on sequential basis • The company’s gross margin contracted by 952bps YoY & 546bps QoQ to 40.5% in Q4FY23. This is largely due to higher raw material prices & lower finished product prices. • EBITDA spreads reported improvement of 5% QoQ to Rs ~36 per kg in Q4FY23, despite 16% dip in gross spreads on QoQ basis because of lower other and employee expense. Considering the improved mix towards specialized/higher value added products and rising exports share over the last few years, we feel the current spreads (reported in Q4FY23) should improve over the next 2-3 years. • Accordingly, we model in EBITDA spreads of Rs 48 & Rs 48.3 per kg for FY24E & FY25E respectively. • Since, company works on a competitive pricing model, wherein increase/decrease in input cost would be passed on subject to similar approach adopted by competitors in the market. For the coming quarter, one of the major raw material viz. Aniline prices has witnessed steep decline in prices and will remain volatile due to which the company to adopt similar approach in their product basket. Sequentially volumes improved, robust volume outlook for next 2 years • In Q4FY23, volume grew by 26% QoQ & remained flattish on YoY basis majorly because of stronger offtake in international markets like Europe & Asia. Domestic demand remained good although not completely out of the woods. We feel uncertainity of demand in both domestic and exports market is now behind us and company should witness improvement in volumes as tyre players expand their base. However, weak china demand might lead to increase in imports which could spoil the party for NOCIL in the short term for the coming quarters. • We expect the company expanded capacity of 55,000 TPA is likely to reach optimum utilization levels in the next 2 years & debottlenecking to support volume growth beyond FY24 for more than a year. On the back of this, we expect NOCIL to report volume CAGR growth of ~9.5% from FY23-25E. Valuations • We feel that demand comeback is a positive sign in exports market but near term concerns like increase in imports, global recessionary trends & weakness in replacement segment could impact rubber chemicals market remain an overhang in the near term. • We value the stock using P/E multiple and arrive at target price of 229 per share (assigning ~21x P/E to FY25E projections) which indicates upside of 7% from current level. Hence, we maintain ACCUMULATE rating on the stock.