EUR 120.00 For Business Accounts Only

MOSL: Morning India (06/June/19): 1. Eicher Motors (Gearing up for a ride to under-penetrated states); 2. Eicher Motors; 3. ICICI Prudential Life Insurance; 4. Tata Motors; 5. Page Industries; 6. DCB; 7. EcoSco

MOrning India (06/June/19): 1. Eicher Motors (Gearing up for a ride to under-penetrated states); 2. ICICI Prudential Life Insurance; 3. Tata Motors; 4. Page Industries; 5. DCB; 6. EcoScope – EAI; 7. Metals; 8. Dewan Housing

 

Today’s top research idea

Eicher Motors: Gearing up for a ride to under-penetrated states

• Eicher Motors (EIM) engaged in a dialogue with the investing community at the UK Technology Centre (started operations in May-17), where entire senior management of the motorcycle and CV businesses presented on their strategy and focus areas (link to the webcast). Throughout the discourse, management did not appear perturbed by the ongoing demand slowdown for Royal Enfield (RE) as they looked at it as a cyclical and industry wide phenomenon. In fact, the company continues focusing on upping its game on product quality, distribution and brand strength. At the same time, it would attempt to capitalize on the continued premiumization trend in developing markets (including India).
• Valuation are reasonable at ~22.9/19.9x FY20/21E consol. EPS. Maintain Buy with a target price of ~INR23,500 (Mar’21 based SOTP).

Piping hot news

Services sector growth slows, PMI at 12 month low with 50.2 in May

• The manufacturing sector’s performance failed to enthuse the service sector after the Purchasing Manager's Index (PMI) for services in May dropped to 50.2 as against 51 in April. This is the weakest expansion in a year. According to a report prepared by the IHS Market, India’s service economy had weakened in May due to disruptions arising from the elections in the earlier part of the month. There were signs that the slowdown may prove temporary as companies stepped up hiring and became more confident about future prospects.