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MOSL: Morning India (16/March/18): 1. Wipro; 2. Mahindra & Mahindra; 3. Fund Folio | Indian Mutual Fund Tracker

MOrning India (16/March/18): 1. Wipro; 2. Mahindra & Mahindra; 3. Fund Folio | Indian Mutual Fund Tracker

 

Today’s top research idea

Mahindra & Mahindra: UVs to be fuel-agnostic by 2020; three launches by CY18-end; launching third brand in tractors at disruptive prices

• The upcoming three new launches are largely developed at its global centers. With two of these launches (compact SUV and premium SUV) coming from existing Ssangyong products, core product quality is well-established.
• The UV business would be fuel-agnostic by FY20, with petrol versions of all models. MM has fungible engine capacity between diesel and petrol, de-risking its investments.
• MM has reduced cost inflation of BS6 diesel (v/s Euro 6) engines by 50% by eliminating features not relevant to India and increasing common bin parts.
• The Tractor business is launching its third brand, Trakstar, focusing on undercutting lower-priced competitors by 5-10%, with the objective of gaining 3-5% market share.
• MM is banking on first mover advantage, with over 68m kilometers of EVs since 2010. It would focus on 48v-650v electric power trains. Its competitive advantages are: (a) faster time to market, (b) high quality, and (c) cost.

Piping hot news

India’s trade deficit in February narrows to five-month low of $12 billion

• India’s trade deficit narrowed to a five-month low of $12 billion in February after widening to a 56-month high a month ago. Merchandise exports rose 4.5% in February while such imports rose 10.4%, data released by the commerce ministry showed. In the 11 months to February, trade deficit expanded to $143 billion against $120 billion in the same period a year ago as imports grew faster than exports.