EUR 120.00 For Business Accounts Only

MOSL: Morning India (24/October/19): 1. Larsen & Toubro (Domestic execution robust despite tough macros); 2. Asian Paints; 3. HCL Technologies; 4. HDFC Life Insurance; 5. Bajaj Auto; 6. ICICI Pru Life; 7. JSW S

MOrning India (24/October/19):

Today’s top research idea
Larsen & Toubro: Domestic execution robust despite tough macros
** Like-for-like PBT growth flattish, lower tax rate leads to earnings beat: Revenue grew 15.2% YoY to INR353b. Reported PBT increased 7% YoY; however, excluding MindTree acquisition, growth was flattish at 1.5% YoY. LT availed the benefits of lower tax rates, as a result of which adj. PAT increased 28.4% YoY to INR23b.

** Core E&C performance below expectation: Core E&C revenue growth of 8.4% YoY trailed our estimate of 12.3%. Core E&C EBITDA margin was flat YoY at 8%, leading to disappointment in the core business. On a positive note, domestic E&C growth was robust at 14% YoY.

** Well placed to meet its order inflow guidance: Order inflows surprised positively with growth of 20% YoY to INR483b in the quarter. To meet its guidance of 10-12% growth, ask rate stands of 6-10% in the remaining six months.

** We expect working capital cycle to return to normalcy: Working capital as a percentage of sales deteriorated to 23% from 20% in 1HFY19 (FY19: 18%) as LT had to support its suppliers.

Piping hot news
Govt eases rules for setting up petrol pumps, allows non-oil companies in business
In the biggest reform in fuel retailing sector in almost two decades, the government on Wednesday relaxed norms for setting up petrol pumps, allowing non-oil companies to venture into the business - a move that could help private and foreign firms to enter the world's fastest-growing market. At present, to obtain a fuel retailing license in India, a company needs to invest Rs 2,000 crore in either hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG) terminals.