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MOSL: Morning India (18/September/19): 1. Automobile (Delhi NCR: Some green shoots in 2Ws/PVs); 2. Bharat Electronics; 3. Oil & Gas (Expert Speak)

MOrning India (18/September/19): 1. Automobile (Delhi NCR: Some green shoots in 2Ws/PVs); 2. Bharat Electronics; 3. Oil & Gas (Expert Speak)

 

Today’s top research idea

Automobile: Delhi NCR - Some green shoots in 2Ws, PVs; Limited expectation of pre-buy across segments

• Most of the OEMs have reported Aug-19 as worst sales month in the past decade.
• However, there were green shoots in form of some improvement in inquires in 2W & PVs. Inquiries have increased in 2W/PV segments, but conversion remains a challenge with customers clearly deferring buying decision in anticipation of a GST cut and/or higher discounts before the BS6 implementation.
• However, CVs continue feeling the pinch of lower availability of freight and excess capacity, which is leading to weak demand despite very high discounts.
• Inventory has been bought down across segments due to production cuts by OEMs but still remains higher than normal. While inventory in PVs is 35-45 days, 2Ws is at 35-45 days and CVs is as high as 60-70 days as of Aug-19.

Piping hot news

DHFL's debt resolution plan hits roadblock

A plan to rescue India's debt-laden Dewan Housing Finance Corporation Ltd (DHFL) has hit a major roadblock as only a small segment of bondholders has agreed to be on board the proposed resolution, according to a custodian of DHFL bonds. The process has been further complicated as certain bondholders have also initiated a process to take DHFL to bankruptcy court, the custodian added. Out of the 87,000 debenture holders who had been asked to be party to the resolution plan being deliberated upon by banks, only 24,400 debenture holders, or less than 30%, had responded before the due date earlier this month.