EUR 120.00 For Business Accounts Only

MOSL: Morning India (8/May/20): 1. Automobiles (Dislocated prices reflect near-term disruption); 2. HCL Technologies; 3. Hindalco; 4. RBL Bank; 5. Cyient; 6. Technology; 7. Expert Speak (Economy)

Morning India (8/May/20)

Automobiles: Dislocated prices reflect near-term disruption
** While 1QFY21 is expected to be a wash-out, demand recovery should happen around the festive season (Sep'20 onwards).

** We estimate FY21E volumes for 2Ws/PVs/CVs/Tractors to decline 10%/6%/13%/0%. In India, we see limited scope for auto-focused incentives, and hence, see low probability of 'V' shaped recovery.

** Thus, we expect three opportunities to emerge from this adversity: (a) possible reset of global automotive supply chain, (b) vendor consolidation and M&As, and (c) shift from public to private transport.

** We do see value emerging across our auto coverage universe as reflected by the substantial moderation in implied terminal growth rates.

** We prefer stocks that offer higher visibility of demand recovery, better competitive positioning, scope of higher operating leverage and strong balance sheet.

** EIM and MSIL are our top large-caps picks. Among mid-caps, we prefer ENDU.

UP govt to exempt businesses from all, but three labour laws, for 3 years
The Uttar Pradesh government has approved an ordinance exempting businesses from the purview of almost all labour laws for the next three years in a bid to provide a fillip to investments affected by the novel coronavirus in the state. “The horticultural and economical activities in the states have been severely affected and slowed down due to the outbreak of Covid-19. This is because businesses and economic activities came to a halt more or less due to the national lockdown,” a press statement issued by the state government said.