EUR 120.00 For Business Accounts Only

MOSL: Morning India (31/January/20): 1. Tata Motors (Below-est.); 2. Bajaj Auto; 3. Strategy 3QFY20 (Interim Earnings Review); 4. Kotak Mahi. Bank; 5. IOCL; 6. Bajaj Auto; 7. Dabur India

Morning India (31/January/20):

Today’s top research idea
Tata Motors: Below-estimates; Adverse FX in JLR, higher discounts in India hurt margins

** While 3Q operating performance was well below estimates, all key operating matrices are showing improvement but offset by Fx in JLR and higher discounts to clear inventory in India. We do believe structural recovery is in place and part of cyclical factors will also ease.

** JLR's operating performance was adversely impacted by adverse Fx and higher VME hurting realizations (-4.5% QoQ), EBITDA margins (-300bp QoQ, +350bp YoY) and EBIT margins (-150bp QoQ, +590bp YoY).

** India business was impacted by continued impact of inventory reduction by giving higher discounts, helping to reduce system inventory by ~39k units QoQ. This coupled with resultant -ve op. lev. resulted in EBITDA margin declining by ~590bp YoY (+460bp QoQ) to 2.9%.

** Consol. net debt (auto) reduced by INR45.5b to INR453.8b, driven by FCF generation of INR40b and INR39b of equity issuance to Tata Sons.

Piping hot news
Kotak Mahindra Bank: RBI accepts promoters’ voting rights to be capped at 20% by March
Kotak Mahindra Bank today said that the RBI has in-principle accepted promoters voting rights in the bank to be capped to 20% of paid-up voting equity share capital (PUVESC) until March 31, 2020. Thereafter, the promoters' voting rights in the bank needs to be capped at 15%. And within six months from the date of final approval of the RBI, the promoters’ shareholding in the bank need to be reduced to 26%, Kotak Mahindra Bank said in a statement.