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MOSL: Morning India (3/October/19): 1. Automobile (Sep’19 wholesales: Seasonal pick-up in PVs, 2Ws); 2. Mahindra & Mahindra; 3. Marico; 4. Financials; 5. Ecoscope

MOrning India (3/October/19): 1. Automobile (Sep’19 wholesales: Seasonal pick-up in PVs, 2Ws); 2. Mahindra & Mahindra; 3. Marico; 4. Financials; 5. Ecoscope

 

Today’s top research Idea

Autos—Sep’19 wholesales: PVs, 2Ws see seasonal pick-up; inventory correction leads to weak CV wholesales

• Sep'19 wholesales were a mixed bag, with signs of a seasonal recovery in 2Ws and PVs but sustained weakness in CVs.
• While PV volumes remained weak (-27% YoY, above estimate), CV volumes were down ~46% YoY (below estimate) led by a decline of 62% YoY in M&HCVs and 32% YoY in LCVs.
• 2W volumes declined ~21% (in-line). Initial feedback on demand during ongoing Navratras has been positive for both 2Ws and PVs.
• Tractors volumes declined only 0.7% YoY, benefiting from a revival in monsoon.
• While EIM (RE), M&M (UVs), Escorts, HMCL and MSIL exceeded our estimates, EIM (VECV), AL, BJAUT and TTMT (PVs) missed our estimates.
• Initial feedback on demand during the ongoing Navratras has been positive for both 2Ws and PVs.

Piping hot news

No MAT credit for firms opting for lower tax: FinMin

The Finance Ministry on Wednesday made it clear that companies opting for a lower tax of 22 per cent will not be eligible for accumulated additional depreciation and Minimum Alternative Tax (MAT) credit. On September 20, Finance Minister Nirmala Sitharaman had announced the lowering of the maximum corporate tax rate to 22 per cent from the earlier 30 per cent.