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MOSL: Morning India (21/September/18): 1. Yes Bank (RBI drives yet another management change); 2. Automobiles; 3. Sun Pharmaceuticals; 4. EcoScope

MOrning India (21/September/18): 1. Yes Bank (RBI drives yet another management change; overhang deepens); 2. Automobiles (BJAUT expands market share led by price actions in CT100); 3. Sun Pharmaceuticals (Mohali 483–Product approval or EIR key for compliance); 4. EcoScope

 

Today’s top research idea

Auto: BJAUT expands market share led by price actions in CT100; Scooter – 125cc segment up ~50%, 110cc sales decline for the first time

We present key highlights from our analysis of brand-wise data for the domestic 2W industry.

• Domestic 2W industry sales are up by 11.5% in YTD FY19. Notably, motorcycle growth (+14.7% in YTD FY19) is outpacing scooter growth (+6.8%) for the first time in many years.
• Scooters market share has shrunk by 140bp to 32.7%. Growth in motorcycle sales has been broad-based, with the economy, executive and premium segments growing by 26.7%, 9.1% and 15.3%, respectively.
• A rural recovery and pricing actions are driving healthy momentum in the economy segment, which is growing at 20%+ for the second consecutive year.
• TVSL (-360bp) and HMCL (-320bp) ceded market share to BJAUT (+670bp) in the economy segment.
• Our top picks in Autos are MSIL and MSS in large caps, and AL and EXID in mid-caps. We prefer MM as the best bet on a rural market recovery.

Piping hot news

All eyes on YES Bank’s succession plan post Rana Kapoor

• The RBI’s decision to cut down the term of YES Bank MD and CEO Rana Kapoor has left many in the industry surprised even as questions have now arisen over the private sector bank’s succession plan. “Reserve Bank of India…intimated that Rana Kapoor may continue as the MD & CEO till January 31, 2019,” YES Bank had said in a regulatory filing on Wednesday.