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Team Research
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MOSL: Morning India (28/January/19): 1. Larsen & Toubro (Beat on all fronts); 2. Maruti Suzuki (Multiple headwinds hurt margins); 3. Biocon; 4. Mahindra Fin. Serv.; 5. Mphasis; 6. Indian Bank; 7. Shriram City U

MOrning India (28/January/19): 1. Larsen & Toubro (Beat on all fronts); 2. Maruti Suzuki (Multiple headwinds hurt margins); 3. Biocon; 4. Mahindra Fin. Serv.; 5. Mphasis; 6. Indian Bank; 7. Shriram City Union Fin; 8. Emami; 9. Escorts

 

Today’s top research idea

Larsen & Toubro: Beat on all fronts

  • L&T reported a strong set of numbers, with sales growth of 24% YoY to INR357b, driven by Hydrocarbon (+22% YoY), Infrastructure (+24% YoY), IT (+29% YoY) and Finance (+20% YoY) segments. EBITDA increased 27% YoY to INR40b, with the margin coming in at 11.2%. EBITDA beat was driven by the others and IT/TS segments. PAT increased 37% YoY to INR20.4b, ahead of our estimate of INR18b. NWC stood at 19.8% of sales (-70bp YoY).
  • Key highlight of the result has been the robust performance from core E&C segment. Domestic E&C segment grew by 37% YoY, driven by Infrastructure (+42% YoY), Heavy Engineering (+72%) and Hydrocarbon (+48% YoY), partly offset by Power (-47% YoY). 3QFY19 orders declined 12% YoY to INR422b, primarily driven by Infrastructure and Hydrocarbons segments.
  • Management has maintained its guidance on sales, EBIDTA and PAT for FY19.

Piping hot news

Zee claims understanding with lenders, MFs on pledged shares

  • The Essel Group management on Sunday claimed it had reached an understanding with lenders and mutual funds, with which the promoters have pledged shares against advances. “In view of the sensitive situation triggered due to the steep fall of the stock price of ZEE Entertainment Enterprises and Dish TV, a detailed meeting of the Essel Group Promoters with the lending entities comprising of Mutual Funds, NBFCs and Banks was conducted, the company said in a press release.
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