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Incorporated in 2004 Route Mobile is a leading Cloud Communication Platform provider

Rajesh Exports [RJEX_IN; Rs.134 billion/US$1.82 billion market cap; US$2.62 million total average daily value traded] reported resilient growth in revenues, ahead of our expectations, on a YoY basis despite a global economic slowdown and a higher gold price. Revenues for the fiscal first quarter [ended June] came in at Rs.461 bn, up 14% on a YoY basis. The rising price of gold in the international market was the primary reason for an increase in revenues in the first quarter due to sustenance in the gold refining business. The increase in the price of gold in the international market more than made up for a decline in the volume of refined gold to ultimately show an increase in revenues. The company however continues to focus on the strategy of sale of high margin products to accelerate revenue growth in the longer term. The surging order book also indicates that the company will show sustained growth in revenues and profitability after FY03/2021 [ending September 2020] and beyond [more details below]. For the first quarter, EPS decreased by 50% to Rs.5.15 vs. Rs.10.23 in Q1 FY2020, while net profit also decreased by 50% from Rs.3 bn in Q1 FY2020 to Rs.1.52 bn in Q1 FY2021. The net profit declined drastically, but only temporarily, as compared to the significant rise in revenues on account of a severe impact on the high margin jewelry business due to the imposed lockdown in the first quarter of the current financial year. Our conversations with the senior management and CEO Rajesh Mehta suggest that the business will post sustained growth YoY and QoQ in both revenue and EPS once the global situation normalizes on account of higher contribution from the gold refining business. The CEO also mentioned that the company’s business witnessed a golden period in the first quarter of FY03/2021 as prices of gold have continued to remain strong making refining even more lucrative for its Switzerland-based subsidiary Valcambi, which is the largest refiner of gold in the world. The first quarter of FY03/2021 was expected to be impacted severely in terms of revenue and profitability on account of the lockdown in most of the countries due to the global pandemic. However, Rajesh Exports has delivered a double digit growth in revenues for the first quarter showing absolute resilience amidst a severe crisis situation. The economic situation despite being far from normal, revenue growth has not been affected for Rajesh Exports. Since the bulk of the business of the company comes from refining of gold, we expect revenue and profitability to witness minimal impact going forward as supply seems to be back on track running at full scale as the situation continues to stabilize globally. The demand for luxury goods, such as cars [both mass market as well as high-end], apartments and real estate, and gold/jewelry will however remain muted in the current year. The jewelry business of the company which has higher margins but relatively lower volumes in comparison to the gold refining business did get impacted to a significant extent not only for the company but for the entire industry only to begin gradual recovery in the second quarter. Our FY03/2022 earnings forecast of Rs. 40.24 per share implies a growth of 20% over the FY03/2021 earnings. The USA end market continues to remain robust with strong consumer spending expected as employment has started to recover sharply. Maintain Estimates and Price Target Rs. 800; 76% Upside We maintain our FY2022 earnings estimates of Rs.40.24 per share on account of an expected fall in revenues and profitability due to the ongoing global pandemic situation which would return to normalcy in FY03/2022. We maintain our price target at Rs.800 on the stock and expect business conditions to come back to pre-pandemic levels at the end of 2020. Our price target represents an upside of approximately 76% from the current levels. Our 12- month price target on the stock is based on DCF methodology and backed

Skipper Ltd’s Q1FY21 revenue de-grew by 35% YoY to Rs2207mn, better than our estimate of Rs1856mn. The revenue decline is majorly due to lockdown impact which hurt the volumes majorly in the engineering segment. Gross margins contracted by 502bps to 32.8% in Q1FY21. EBITDA margin reported a contraction of 850bps to 4.1% YoY (vs our estimate of 5.8%) in Q1FY21 led by sharp gross margin contraction. Overall, EBITDA de-grew by 79% YoY to 90mn in Q1FY21. Lower than expected operating profit led to a net loss of Rs116mn in Q1FY21 as compared to profit of Rs79mn in Q1FY20. Revenue beat estimates, bottom-line reported loss led by gross margin contraction • The company reported revenue de-growth of 35% to Rs2207mn better than our estimates of Rs1856mn in Q1FY21. Polymer and infrastructure segment recorded growth of 30% & 42% respectively despite COVID-19 and lockdown issues. Engineering segment reported decline of 46% YoY to Rs1592.5mn in Q1FY21. • However, higher raw material cost led to losses at EBIT level in polymer and infra segment of Rs37.6mn and Rs22.9 respectively. Engineering segment reported decline of 82% to Rs67mn at EBIT level. • We expect performance to improve in the subsequent quarters led by improvement in utilization and demand recovery. Domestic T&D activities showing signs of recovery, International T&D share to improve in overall order book • The domestic T&D activities are showing signs of pickup after witnessing 2 years of lull. This is getting reflected in the subsequent pick up of orders in domestic market. • The company has the highest bidding pipeline of Rs51.5bn as on 30th June 2020. New domestic tenders worth Rs20.5bn and international tenders worth Rs31bn are under different phase of bidding for new transmission lines. • Total T&D order book stood at 16.5bn as on 30th June 2020. Management has clear focus on strengthening the international T&D order book and aims to grow exports at 50% of revenue in next 2 years. • We believe ordering and execution in domestic and international T&D market to gain pace from H2FY21. Valuation • We value the stock on 11x FY22E EPS of Rs 5.0 to arrive at a target price of Rs 55 per share, an upside of about 28% from the current levels. • Hence, we maintain BUY rating on the stock.

Commercial benefits from complex products underway

Focus on a one-stop financial intermediary

Catalysts emerging; Valuation comfort immense