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MOSL: Morning India (2/August/17)-1. India Strategy (Earnings Review) 2. NTPC 3. Power Grid 4. JSW Steel 5. Marico 6. Bharat Electronics

​MOrning India (2/August/17): 1. India Strategy (Earnings Review); 2. NTPC; 3. Power Grid; 4. JSW Steel; 5. Marico; 6. Bharat Electronics; 7. Container Corp.; 8. Shriram City Union Fin.

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Today’s top research idea

India Strategy: 1QFY18 interim earnings review; Performance broadly in line, but internals not yet convincing

• ​The 1QFY18 earnings season, so far, has been broadly in line with expectations in terms of headline numbers. However, internals do not yet provide much encouragement, in our view.
  
• The MOSL Universe has reported sales, EBITDA and PAT growth of 8.5%, 5.5% and 2% YoY, as against expectations of 7.2%, 7% and 5.3%, respectively.
  
• Of the 31 Nifty companies that have declared their results so far, 21 have reported earnings ahead of/in line with our estimates. Sales/EBITDA/PAT for the 31 Nifty companies have grown 8.1%/4.9%/3.3% v/s expectation of 6.3%/7.1%/6.3%.
  
• Almost two thirds (i.e., 58) of the 92 MOSL Coverage companies have reported EBITDA either in line with or above estimates. On the PAT front, 50 out of 92 companies either met or exceeded expectations.
  
• Ex-Financials, EBITDA margin contracted 150bp YoY to 22.2% v/s estimate of 23.3%.
  
• Based on the results of the 31 Nifty companies, our FY18 Nifty EPS estimate is unchanged at INR496 (16% growth). However, we have raised our FY19 Nifty EPS estimate marginally upward by 0.6% to INR605.
  

iping hot news

GST impact: Manufacturing PMI contracts in July

• ​Amidst calls for a rate cut to boost investment and demand, manufacturing production contracted for the first time this year in July, according to a private survey.