EUR 120.00 For Business Accounts Only

MOSL: Morning India (9/May/19): 1. India Strategy (4QFY19 interim earnings review); 2. Titan Company (Continued robust performance sans one-offs); 3. Hindalco (Novelis); 4. P & G Hygiene; 5. ABB; 6. Shriram Tra

MOrning India (9/May/19): 1. India Strategy (4QFY19 interim earnings review); 2. Titan Company (Continued robust performance sans one-offs); 3. Hindalco (Novelis); 4. P & G Hygiene; 5. ABB; 6. Shriram Trans.; 7. Tata Comm; 8. K E C Intl.

Today’s top research theme

India Strategy: 4QFY19 interim earnings review; In-line performance so far

• The trend in earnings revision remains in favor of downgrades. Broader headline numbers of both the MOFSL Universe and the Nifty have been in line with our estimates. Corporate Banks demonstrated a decent improvement in asset quality, while Auto slowdown continues and Consumer Staples commentaries turned weaker on demand.
• For the MOFSL Universe, sales, EBITDA and PAT grew 11.9%, 5.7% and 9.5% YoY, as against our estimates of 16.6%, 4.1% and 9.8% YoY, respectively.
• Sales, EBITDA and PAT for the 19 Nifty companies have grown at 12.6%, 5.3% and 8.6%YoY, as against our estimates of 18.2%, 3.6% and 10.7% YoY, respectively.
• Approximately 74% (i.e. 50) of the 67 MOFSL Universe companies have reported EBITDA that is either in line or above our estimates. On the PAT front, approximately 82% (i.e. 55) of the 67 companies have either met or exceeded our estimates
• Our FY19/20 Nifty EPS estimates have been cut by 1.8%/1.5% to INR477/597 from INR486/606. We are building in Nifty EPS growth of 5%/25% for FY19/20.

 

Piping hot news

PSU disinvestment: Govt plans rejig of ETF baskets to lure investors

• Successful utilisation of exchange-traded funds (ETFs) to mop up more than half of its Rs 85,000-crore disinvestment receipts in FY19 has prompted the Centre to consider replacing half-a-dozen stocks from the Bharat 22 ETF and two from the CPSE ETF, and use them to mobilise a major chunk of the Rs 90,000-crore disinvestment planned for FY20. Stock rejig has become necessary as the Centre’s holding in many PSUs has reached the threshold limit of 52% (the minimum shareholding prescribed for the PSUs in the ETF baskets) in Bharat 22 ETF, a diversified index of 22 stocks. These include Indian Oil (4.05% weight in the index), Nalco (5.78%), GAIL (4.41%) and Engineers India (0.98%).