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MOSL: Morning India (8/February/18): 1. Technology 2. Ecoscope 3. Eicher Motors 4. Cipla 5. Aurobindo Pharma 6. Dalmia Bharat 7. Indraprastha Gas 8. Voltas

MOrning India (8/February/18): 1. Technology; 2. Ecoscope; 3. Eicher Motors; 4. Cipla; 5. Aurobindo Pharma; 6. Dalmia Bharat; 7. Indraprastha Gas; 8. Voltas; 9. Castrol India; 10. Thermax

 

Today’s top research idea

Eicher Motors: Operating performance in line; RE margins stable; VECV below est.

• revenue grew 23.7% YoY to INR22.7b (est. of INR22.1b), with EBITDA growth of 23% YoY to INR7.1b (est. of INR6.9b). Consol. EBITDA margin of 31.2% was in-line.
• Higher depreciation and lower other income restricted PAT to INR5.2b (+25% YoY; est. of INR5.5b).
• RE’s realization improved 2.8% QoQ (+3.9% YoY) to ~INR109.6k (est. of INR106.9k).
• VECV’s realization was flat QoQ (+2.4% YoY) at INR1.6m (est. of INR1.57m).
• RE took price increase of 1% on 350cc models, effective Feb’18.
• Plan for Phase-II at Vallam plant would be finalized in May-18; in the absence of expansion, capacity would be 900k in FY19E.
• Management expects strong growth in 7 out of top 10 states, where RE has market share of 2-4%.
• Management indicated that VECV should see continued strong demand momentum.

Piping hot news

SC cancels 88 mining leases in Goa, calls for auctions

• The Supreme Court on Wednesday cancelled 88 iron ore mining leases in Goa, dealing a blow to miners including Vedanta Ltd. The existing leases will run till 15 March, after which mining activity has to stop, the court directed. The Supreme Court bench, headed by justice Madan B. Lokur, held the government’s process of renewing the mining leases of companies to be “in violation of law” and directed the state government to grant fresh licences through an auction.