EUR 120.00 For Business Accounts Only

MOrning India (30/May/19): 1. M&M (Superior op. performance); 2. Power Grid Corpn; 3. Havells India; 4. PNB; 5. Aurobindo Pharma; 6. United Spirits; 7. NMDC; 8. Bharat Electronics

MOrning India (30/May/19): 1. M&M (Superior op. performance); 2. Power Grid Corpn; 3. Havells India; 4. PNB; 5. Aurobindo Pharma; 6. United Spirits; 7. NMDC; 8. Bharat Electronics

 

Today’s top research idea

Mahindra & Mahindra: Softening RM prices/lower discounts combine driving superior op. performance

• Revenues increased (incl. MVML) 5% YoY to INR138b (est. of INR131b), as realizations grew 5% YoY (+6% QoQ) to ~INR586.2k (est. of INR556.6k). Total volumes declined 0.4% YoY.
• EBITDA margin came in better than estimated at 13.5% (est. of 11.5%), led by lower RM cost at 68.3% (est. of 69.7%) and staff cost at 5.5% (est. of 6.7%).
• Auto PBIT margin expanded 300bp QoQ (-170bp YoY) to 8.8%, while Tractor EBIT margin contracted 300bp QoQ (-330bp YoY) to 16.2%.
• For FY20, it expects tractor industry to grow 5%, domestic PV industry growth to be better than SIAM outlook of 3-5% and CV industry growth of 10-12% (SIAM).
• We raise FY20/21E consol EPS by 5%/3%. Maintain Buy with an SOTP-based TP of INR810 (Mar'21E).

Piping hot news

IL&FS may soon begin servicing debt of 13 group entities

• Infrastructure Leasing & Financial Services (IL&FS) may soon begin servicing the debt of 13 more group entities, in what could be the first step by the infrastructure group to find a resolution to its debt issues. These 13 entities have total outstanding debt of Rs 16,372 crore. In a submission before the National Company Law Appellate Tribunal (NCLAT), IL&FS said it would begin the reclassification process for these companies so that they could make the payments that are currently on hold.