As the earnings upcycle seems to be over, we cut our target multiple to 35x (37x. Although home improvement and new housing theme is expected to sustain, we believe rising competition (renewed Butterfly under Crompton, etc.) will continue to keep earnings for TTK in check. 1 Month: Hero MotoCorp share price moved up by 0.98.
Return Performance of Hero MotoCorp Shares: 1 Week: Hero MotoCorp share price moved down by 1.56. Hero MotoCorp share price was Rs 2,782.55. EBITDA was up 13% on three-year CAGR to INR 830mn (HSIE INR 951mn). As on 27 Jul, 2022, 03:56 PM IST Hero MotoCorp share price was down by 0.65 basis the previous closing price of Rs 2,838.85. EBITDA margin came in at 13.8% (HSIE 15%). With carrying high cost inventory, we expect RM softening benefits will be majorly visible from Q3FY22. Gross margin contracted 257bps YoY to 42% (HSIE 41.5%). The revenue growth was primarily led by strong performance in cookware, which was up 18% three-year CAGR. Standalone revenue was up 68% YoY (HSIE 77%), clocking 11% three-year CAGR. TTK Prestige: TTK Prestige's Q1FY23 revenue and EBITDA margin was a miss. We maintain ADD on the stock with a reduced target price of INR365 (with a lower multiple at 27x Mar-24E EV/NOPLAT, following a derating in the AMC sector even as we roll forward our earnings). We lower our FY23E/24E earnings by 11%/ 5% to factor in lower margins and expect NAM to deliver FY22-24E revenue/NOPLAT CAGR of 9.3/12.1%. Additionally, we expect NAM to benefit from higher credibility to raise HNI/institutional capital. We expect NAM to focus on improving performance to recoup its lost market share. Falling market share in the high-margin equity segment, at 6.2% (-17bps), was a double whammy in a falling equity yield environment. Nippon Life India Asset Management: Revenue was 3.8% below estimates as a result of pressure on revenue yields.
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