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MOSL: Morning India (7/February/18): 1. Roads ( Infra); 2. M & M (ART); 3. Hero Motocorp; 4. Siemens; 5. Punjab Natl.Bank

MOrning India (7/February/18): 1. Roads ( Infra); 2. M & M (ART); 3. Hero Motocorp; 4. Siemens; 5. Punjab Natl.Bank; 6. Lupin; 7. Castrol India; 8. JSW Energy

 

Today’s top research Idea

Lupin: Sequential improvement in US business; Margin improvement will be key

• LPC’s 3QFY18 revenue declined 11% YoY to INR39.8b, mainly due to a significant fall of ~34% YoY (but up ~5%QoQ) in its US business (~37% of total sales). India business, on the other hand, grew ~8% YoY (-8% QoQ) to INR10.7b.
• Other geographies saw robust growth, with RoW growing by 16%, South Africa by ~19% and Japan by ~23%. Europe business declined by ~4% YoY.
• EBITDA declined significantly by ~43% YoY (-19% QoQ) due to a change in the business mix (more of the India business than the US business) and a forex loss of INR821m (v/s a gain of INR276m in 3QFY17). Margin shrunk 1,000bp YoY (-430bp QoQ) to 17.3. Management guided for 21-22% margin in FY18/19.
• PAT declined 65% YoY to INR2.2b, led by contraction in margins.

Piping hot news

Trai slams Reliance Communications for refusing to refund consumers' balance

• Telecom regulator Trai today slammed Reliance Communications for "usurping" unspent pre- paid balances and security deposit of its mobile customers after operations were shut down, calling it "unethical, immoral and unjustified". Trai Chairman R S Sharma warned of punitive action if the billionaire Anil Ambani-led company fails to comply with its directive.