EUR 120.00 For Business Accounts Only

MOSL: Morning India (21/May/19): 1. Tata Motors (Guides for recovery in both businesses in FY20); 2. IOCL (Better-than-expected marketing margins result in a beat); 3. BPCL; 4. Shree Cement; 5. UPL; 6. HPCL; 7.

MOrning India (21/May/19): 1. Tata Motors (Guides for recovery in both businesses in FY20); 2. IOCL (Better-than-expected marketing margins result in a beat); 3. BPCL; 4. Shree Cement; 5. UPL; 6. HPCL; 7. United Breweries

 

Today’s top research idea

Tata Motors: Guides for recovery in both businesses in FY20

• TTMT reported big beat on consol adj. PAT (INR21.3b vs est INR12.1b), despite in-line EBITDA at JLR & big miss at S/A level. This was driven by lower depn (on impaired value of assets) at JLR & higher other income/lower interest cost.
• Also, consol net debt reduced by INR185b QoQ to INR284b led seasonal recovery at JLR.
• Expects FY20 volumes in US to decline slightly, UK/EU is uncertain due to BREXIT, though China should see recovery from Jul-19 due to very low base.
• It expects large part of cost savings to come in FY20 (GBP0.4b for VRS + GBP0.3b thru lower D&A). Despite this FCF is expected to be negative for FY20/21 (vs earlier guidance of positive FCF in FY21).
• Outlook for FY21 is looking weak for its high margin RR/RR Sport volumes (run-out ahead of model change) and high valuation S/A business (due to BS6).
• Further, noises around BREXIT, Trade wars & EVs add to uncertainties for JLR.

Piping hot news

Rupee surges 48 paise against $, logs biggest gain in 2 months

• The rupee Monday appreciated by 49 paise, the biggest single-day gain in two months, to close at 69.74 against the US dollar following sharp gains in equities and forex inflows after exit polls suggested another term for the ruling NDA government. Forex traders said investors welcomed exit poll results that predicted a thumping majority for the current BJP-led government.