Continuing stellar performance; maintain Hold Aarti Industries Ltd (AIL), for Q4FY19, reported strong set of numbers. Revenue has grown by 17.7% mainly due to healthy performance across all segments. EBITDA grew by 31.4%YoY to INR2,369mn with 205bps improvement in margins to 19.6% on account of increasing share of value added and high margin products. Net profit grew at a higher pace of 46.9% to INR 1245mn, due to slower growth in depreciation and interest expenses bolstered by operationally strong performance. Overall volumes in the specialty chemical segment grew by 3% YoY in Q4FY19 (FY19: 8%); For FY20, the management has guided for midteen volume growth. Moreover, they have alluded an increase in realization in many of the products leading to a better margin profile, which would aid in supporting growth going forward. During the quarter exports accounted for ~41% of revenue. Better realization with favorable margin profile compensated to low volume growth in specialty chemicals During the quarter, the speciality chemicals business, which accounts around 76% of AIL’s overall revenues. EBIT margin has also shown 349bps improvement on the back of increasing share of value added and high margin products, as increasing raw material costs, which are typically built into as a pass through mechanism in their selling prices. The board has already approved for a brownfield capacity expansion plan in nitrochlorobenzene from 75,000MTPA to 108,000 MTPA resulting in a capex of INR1.5bn.These capacities would be fully commissioned in two phases, Phase 1 in 2HFY20 and Phase 2 in FY21. The expanded capacity would not only help in meeting the increasing domestic demand but also for downstream captive requirement. AIL’s nitrotoluene facility reached 53%utilization level, since its commissioning in Sep 2017 during Q4FY19, which the management expects to be ramped up to at least 80% by FY20. Pharma business: Momentum accelerate The pharmaceutical segment reported strong growth of 22.1% in Q4FY19, lead by expanding volumes across markets. However, EBIT margin witnessed 414bps contraction to 13% compared to Q4FY18, due to adverse revenue mix. The Management expects pharma revenues to grow at 20- 25% with margin improvement. Since major fixed costs are already built-in, incremental volumes will result in significant increase in segment profits. We expect AIL’s pharma segment to deliver strong revenue growth of 21.7% CAGR over F19-FY21E. Valuation and Outlook AIL is well placed to capture the benefit on account of shit in manufacturing base from western countries to emerging economics like India and China. With China facing environmental and cost pressures leading to the creation of a supply risk situation. This situation is beneficial for the company and it is expected to capitalize this opportunity and increase its market penetration. Improving demand visibility and new product introduction would lead to increased capacity utilization. Further, strong volume growth and new high margin order wins are expected to drive healthy revenue and profitability growth going ahead. Overall, we remain optimistic on the future growth prospects of the company. However, the recent run in stock price limits upside from the current level. Hence, we retain our Hold rating, with a price target of INR 1,881 by assigning P/E of 21x on its FY21E earnings.

UPL reported a revenue growth of 49.8% YoY and 73.2% QoQ to INR 85.2 bn driven by strong performance across the LatAm and European regions.

For Q4FY19, Tata Motors reported total revenue from operations of INR 86,422 Cr, a degrowth of 3.9% YoY (+12.4% QoQ)

Lumax Industries Ltd. (LIL) reported revenues of INR 4327 mn (down 22.6% YoY & flat QoQ), EBIDTA of INR 307 mn (down 33.6% YoY, down 25.8% QoQ) with EBIDTA margin (Excl. Other Income) at 7.1% (8.3% YoY).

Below est.; Negative op. leverage dents margins; FY20 outlook cautious

Steady quarter; Acquisition of IIFL’s CV financing business complete

Communication and Enterprise swap momentums

Earnings growth hits a bump, long-term outlook intact

Minda Industries Limited (MIL) Net Sales for Q4FY19 stood at INR 14865 Mn which was up by 8.43% YoY and 1.11% QoQ