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MOSL: Morning India (8/August/18)-1. Mahindra & Mahindra; 2. Britannia Inds; 3. Motherson Sumi; 4. Hindalco-Novellis; 5. GSK Consumer; 6. TVS Motor; 7. Punjab Nat. Bank;

MOrning India (8/August/18): 1. Mahindra & Mahindra; 2. Britannia Inds; 3. Motherson Sumi; 4. Hindalco-Novellis; 5. GSK Consumer; 6. TVS Motor; 7. Punjab Nat. Bank; 8. Healthcare

Today’s top research idea

Mahindra & Mahindra: In-line performance; EBIT margin expands for both Autos and Tractors

• MM's volumes grew 19% YoY, led by growth of ~19% in Tractors and ~17% in UVs. Realizations grew 3% YoY (-0.6% QoQ) to ~INR554.5k (est. of ~INR542.8k). MM took a price increase of ~1.5% in Auto and ~1.3% in FES segment.
• Reported EBITDA margin expanded ~260bp YoY (+70bp QoQ) to ~15.8% (est. of 15.9%). Auto PBIT margin shrank ~130bp QoQ (+240bp YoY) to 9.4%. Tractor EBIT margin improved ~140bp QoQ (+360bp YoY) to 20.9%.
• EBITDA grew 47% YoY to ~INR21.1b (est. of INR20.75b), driving adj. PAT growth of 65% YoY (+10% QoQ) to ~INR12.4b (est. of ~INR12.2b).
• Tractors industry is expected to grow at 12-14% in FY19 (v/s previous guidance of 8-10% growth).
• MM plans to launch MPV U321 in Sep-18 and another two UVs (compact and premium) before and after Diwali.

Piping hot news

India doubles import tax on over 300 textile products to 20%, may hit China

• India doubled the import tax on more than 300 textile products to 20% on Tuesday as the world’s biggest producer of cotton tries to curb rising imports from China. It was the second tax hike on textiles in as many months after an increase on other products including fibre and apparels last month. The moves are expected to provide relief to the domestic textile industry, which has been hit by cheaper imports.