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Geojit BNP Paribas
Supreme Ind (Accumulate)
CMP: ₹603.3
Target: ₹612
Supreme Industries Ltd (SIL) first quarter (current fiscal) top-line and bottom-line were below our estimate by 10 per cent and 45 per cent respectively. The softening of raw material prices led to inventory write-down coupled with lower volumes in PVC piping segment, led decline in EBITDA margins by 230 bps. We believe that current hiccups in performance is largely one- off, even though it is likely that inventory write-down is likely to happen in coming quarter also, but the impact would be very limited. Keeping in view of subdued performance, we downgrade SIL to "Hold from "Accumulate".
Spark Capital
South Indian Bank (Buy)
CMP: ₹26.70
Target: ₹30
We retain our positive outlook on South Indian Bank and view the quarter’s results as a significant step in the bank’s journey to transform itself into a SME/retail focussed bank. While margins, other income, credit growth/mix and slippages trended according to plan, restructuring and related provisioning were ahead of estimates. Although slow, we expect the transformation to be value accretive and result in a structural uptick in RoAs.
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