EUR 120.00 For Business Accounts Only

MOSL: Morning India (01/August/19): 1. Eicher Motors (Higher RM and staff costs impact margins); 2. IOCL; 3. UPL; 4. CONCOR; 5. Ashok Leyland; 6. Future Retail; 7. Chola. Inv. & Fin; 8. PNB Housing

MOrning India (01/August/19): 1. Eicher Motors (Higher RM and staff costs impact margins); 2. IOCL; 3. UPL; 4. CONCOR; 5. Ashok Leyland; 6. Future Retail; 7. Chola. Inv. & Fin; 8. PNB Housing

 

Today’s top research Idea

Eicher Motors: Higher RM & staff costs impact margins; Accelerating pace of setting up RE Studios

• revenues declined ~6.5% YoY to ~INR23.8b (v/s est. INR23.3b). Higher other income restricted PAT decline to ~22% at ~INR4.5b (in-line).
• RE's EBITDA margin declined 160bp YoY (-640bp QoQ) to 25.9% (v/s est. 27.3%) due to higher RM and staff costs (seasonal factors).
• VECV's margins were impacted by higher discounts and negative operating leverage, resulting in decline of 370bp YoY to 5.5% (v/s est. 6.2%).
• It is accelerating the pace of setting up RE Studios to improve accessibility of RE products, with ~350 outlets by 1HFY20 and ~500 outlets by end-FY20 (v/s earlier target of 350 outlets in FY20).
• Dealer inventory is <1 month. Barring exceptions, its network is financially healthy with no problems in either dealer/customer financing.
• No benefit of commodity cost in 1Q, expect benefits to reflect in 2Q-3QFY20.

 

Piping hot news

Monsoon revival in July cuts rain deficit to 9%

Powered by prodigious flows from the Bay of Bengal, the monsoon generated a significant amount of rain in July, cutting down the rainfall deficit from a peak of 33 per cent to a single digit (9 per cent) by the month-end for the country as a whole. The prognosis looks good, at least initially, for August, with a prevailing rain-gushing low-pressure area sitting pretty over Central India on Wednesday and a much stronger system to follow in four to five days.