MOSL: Morning India (20/August/18): 1. India Strategy (1QFY19 Earnings Review); 2. Infosys; 3. Larsen & Toubro; 4. Tata Motors - ART-FY18; 5. Healthcare; 6. EcoScope - Monsoon
MOrning India (20/August/18): 1. India Strategy (1QFY19 Earnings Review); 2. Infosys; 3. Larsen & Toubro; 4. Tata Motors - ART-FY18; 5. Healthcare; 6. EcoScope - Monsoon
Today’s top research theme
India Strategy | 1QFY19 Earnings Review — Earnings Season: Outlook getting better
- India Inc has ended the last leg of its earnings season for the quarter ended June 2018. Although some interesting trends were observed during the course of the earning-report season, we note that the underlying narrative stays the same - a healthy performance from the Consumption- and Commodity-oriented sectors marred by higher provisioning costs at Corporate Banks.
- While aggregate sales and EBITDA growth was healthy and in-line, profits missed our estimates. The miss at the PAT level for both the MOSL and Nifty Universe can be entirely ascribed to Corporate Banks, which were impacted by elevated provisions. Strong inventory gains in OMCs boosted the aggregate profits.
- Global Cyclicals single-handedly drove the quarterly performance, led by Metals and OMCs (inventory gains drove profits). Defensives posted double-digit earnings growth for the first time since Jun-16, buoyed by Healthcare and Consumer, while Domestic Cyclicals posted a 12% YoY PAT decline dragged by corporate banks.
- Earning moderate led by drag in Corporate Banks: 90 companies saw earnings cut of 3%+ (78 in 4QFY18), while 39 companies saw earnings upgrades of 3%+ (53 in 4QFY18). Our FY19/20 Nifty EPS estimates have been cut by 5.6%/1% to INR547/688 v/s INR580/694 earlier.
Piping hot news
Indiabulls HF appoints Mundra as a director
- Indiabulls Housing Finance (IBHFL) the country’s second-largest housing finance company, appointed Mr. S.S. Mundra, former Deputy Governor of the Reserve Bank of India, as an independent director on the board of the company. “Mr. Mundra’s appointment is for a period of three years, until August 2021,” the company said in a statement. “Mr. Mundra’s extensive experience will be valuable for shaping the next phase of IBHFL’s growth, and his appointment will further strengthen the company’s corporate governance,” it added.
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