MOSL: Morning India (27/March/20): 1. Bharat Forge (All global operations to be shut due to coronavirus); 2. NTPC (Acquisition of NEEPCO and THDC) 2. EcoScope (Finance Minister announces relief packages); 3. Ce
MOrning India (27/March/20): 1. Bharat Forge (All global operations to be shut due to coronavirus); 2. NTPC (Acquisition of NEEPCO and THDC) 2. EcoScope (Finance Minister announces relief packages); 3. Cement; 4. Expert Speak (a. Auto; b. Consumer; c. Real Estate)
Today’s top research idea
Bharat Forge: All global operations to be shut due to coronavirus
- BHFC's all plants in India were shut from 23rd March and overseas operations would be shut from 27th March.
- Management expects BHFC emerging stronger like previous downcycles due to its technology focus, innovation capabilities and balance sheet strength. It expects BHFC to benefit from expected strategic and structural changes in the global supply chain.
- BHFC has strong balance sheet with cash of INR18b and ~INR7b of undrawn limits in India.
- US Class 8 truck outlook: It expects further downside of 10-15% to its earlier CY20 guidance of ~240k units (v/s 359k in CY19).
- After a sharp fall in FY20, shale oil segment's contribution to consol. revenue would be 5-6% of FY20 consol. revenues.
- Focus areas for next five years: BHFC is focusing on three verticals: PVs, Aerospace and Aluminium/light weighting, where it is doing a lot of work and traction is visible.
Piping hot news
G20 nations vow to inject $5 tn to fight Covid-19, global slump
Leaders of the Group of 20 or G20 major economies on Thursday pledged to infuse over $5 trillion into the global economy, and do “whatever it takes" to minimize the economic and social impact of the Covid-19 pandemic. In a joint statement issued after the G-20’s first ever virtual summit, chaired by Saudi Arabia, members committed themselves to restore global growth, maintaining market stability and strengthening resilience. Prime Minister Narendra Modi was among leaders who participated in the video conference.
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