EUR 120.00 For Business Accounts Only

MOSL: Morning India (30/July/19): 1. Havells India; 2. Dr Reddy's Labs; 3. Zee Entertainment (ART); 4. ABB; 5. Vodafone Idea; 6. Bharat Electronics; 7. Alembic Pharma; 8. Shriram City Union Finance

MOrning India (30/July/19): 1. Havells India; 2. Dr Reddy's Labs; 3. Zee Entertainment (ART); 4. ABB; 5. Vodafone Idea; 6. Bharat Electronics; 7. Alembic Pharma; 8. Shriram City Union Finance

 

Today’s top research Idea

Havells India: Lloyd facing stiff competition

• Revenues continued disappointing for the second consecutive quarter, with growth of meager 4.5% YoY to INR27.1b. EBITDA too declined 11.7% YoY to INR2.8b, with the margin contracting 180bp YoY to 10.2%. Other income came in higher than our estimate at INR397m. However, the tax rate stood at 34% v/s 30.8% in 1QFY19. Thus, net profit was down 17% YoY to INR1.7b (29% miss) in the quarter.
• In a seasonally strong quarter backed by a robust summer season, Lloyd reported an 8% decline in revenues. While Lloyd revenue was impacted by a sharp decline in LED TV sales, we believe that even in the AC business, the company has lost market share.
• We cut our FY20/21 EPS estimates by 11%/13% to factor in lower revenue growth and margin assumption, especially in Lloyd. Our FY19-21 EPS CAGR estimate now stands at 17.6% on the back of revenue CAGR of 15.4%.
• On back of EPS cut, our TP is reduced to INR700 (prior: INR800) with an unchanged target FY21E P/E multiple of 40x. Maintain Neutral as we await a better entry point in the stock.

 

Piping hot news

SBI decides to trim rates on retail domestic term deposits by 5-75 bps

State Bank of India has decided to cut interest rates on retail domestic term deposits across all maturities by 5-75 basis points with effect from August 1, in view of the falling interest rate scenario and surplus liquidity. India’s largest bank has also decided to reduce interest rates on domestic bulk term deposits in seven out of eight maturity buckets by 5-75 basis points.