Analyst Corner: Retain ‘sell’ on ICICI Lombard with fair value of Rs 825
Loss ratio in the motor OD segment continues to drag its earnings although the recent q-o-q reduction may be an early sign of improvement.
Analyst corner: Lower battery costs likely to woo e-scooter buyers for Bajaj Auto
Bajaj e-scooter’s premium variant is priced at Rs 1.2 lakh (ex-showroom) whereas Ather S450 is priced at Rs 1.1 lakh (ex-showroom).
Consumer staples preview: Slowdown is intact, without getting worse
There is slowdown for select rural-centric players but higher-urban-salience companies are likely to more than pick up the slack
P&G India: Growth focus took a toll on FY19 margins
Combined entity’s revenue grew ahead of HUVR; focus on topline to persist
Oil and gas outlook remains muted in the near term
Overall proposed cuts will imply only 0.5 mn b/d of reduction in oil production from the levels achieved in November 2019, as Saudi Arabia had partly reduced production below its earlier committed levels in recent months.
Cement on sliding track; sell on UTCEM, SRCM
Cement demand was down 1% YTD till October and we do not see signs of demand recovery in 2HFY20E against market expectations of 5-6% growth.
Insurance: General players enjoy a good November
Motor segment reported 6% y-o-y premium growth in November 2019, moderating from the 15-20% growth seen in the last two months.
Loan waiver: Impact on PSBs greater than private banks
While exact criteria is awaited, the government indicated that the scheme would be applicable to loans availed between 2015 and 2QFY20.
Growth in motor insurance business remains moderate
Overall growth in health premium was robust at 28% y-o-y, compared to YTD run-rate of 17%.
Stock corner: Upgrade Thermax to ‘buy’; FV unchanged at Rs 1,150
TMX has recently inaugurated its manufacturing incubation centre, has added key business references in south-east Asia, and continues to launch new offerings while engaging with stakeholders through customer and vendor connec
Stock corner: Retain ‘add’ on IndusInd Bank, revised FV Rs 1,625
The analyst meet showcased a new BHAFIN (Bharat Money) that has, in a relatively short period post acquisition, built a host of products that is ready to be rolled out on a massive scale with technology at its core.
Stock corner: ‘Add’ L&T Infotech, company’s primed for higher growth
Uncertain outcome of ICE visit is an overhang; ‘Add’ maintained with TP of Rs. 1,750.
Stock corner: ‘Add’ on HDFC Life Insurance, tech-based initiatives to provide edge
Execution is likely to ensure superior profitability; company remains industry bellwether; ‘Add’ retained.
Stock corner: Ongoing trial could push back launch; ‘Sell’ on Biocon
Post Fulphila and Ogviri launches in the US, the next key launch for MYL/BIOS is Semglee (biosimilar insulin glargine), which we expect to be triggered in 1HFY21 post expiry of the 30-month stay.
Life insurance: Private insurers’ premium collections up 27%
Private players reported 29% y-o-y growth in overall APE in November 2019, with 27% growth in individual APE and 53% y-o-y growth in group business. Overall industry APE was high at 67% y-o-y owing to 1X y-o-y rise in individ
Stock corner: Maintain ‘Buy’ on Tata Motors and fair valur of Rs 200
JLR gained 20 bps market share y-o-y in the US luxury car market segment at 6.5% y-o-y in 9MCY19 led by strong demand for Discovery, Range Rover Sport and Evoque. JLR has improved its market share from 7.8% in CY2018 to 8.2%
Analyst corner: Oil, gas, consumable foods see moderate improvement
We expect RIL to benefit from its nil fuel oil yield and ability to process heavy sour crudes and HPCL to be negatively impacted given its high fuel oil yield.
Gap between outstanding lending rates and fresh loans rises in August
The gap between outstanding and fresh lending rates was up 10 bps m-o-m in August 2019 to 75 bps. The gap has been broadly in the range of 50-70 bps since July 2018.
Stock corner: Maintain ‘sell’ on Yes Bank, fair value unchanged at Rs 55
Yes Bank surprised positively on Thursday with an announcement that it has received a binding bid from an investor committing US$1.2 bn.
Stock corner: ‘Reduce’ Hindustan Zinc, results were in line with expectations
FY20-22e EPS cut by 7-4% due to lower volumes and higher costs; TP revised to Rs 205; ‘Reduce’ retained due to dear valuations.
Third-party motor insurance drives up growth in premiums of general insurers
Most large players were strong on ex-crop basis—ICICI Lombard was up 17% (overall premium down 23%), Bajaj up 24% (overall premium up 1.4X) and SBI GI up 51% y-o-y (overall premium up 88%).
Life insurance: Private sector individual APE growth slows down in Sept
Private sector players reported 3% y-o-y growth in overall APE in September 2019, with 3% growth in individual APE.
Aurobindo Pharma: Stock has factored in import alert
Assuming worst-case scenario, ARBP announced that the USFDA issued a form-483 for its Unit-VII, its largest orals facility for the US, though, increasingly less relevant for future pipeline/filings, particularly, post Sandoz
BPCL ratings: Reiterate ‘Sell’ amid adverse risk-reward balance
The recent outperformance of BPCL against other OMCs is pricing in upside from a potential open offer in lieu of control premium that maybe paid by a strategic buyer in a scenario of privatisation.
Kotak Institutional Equities: Maintain ‘buy’ on CIL with fair value of Rs 285/share
Coal India reported a decline of 20% yoy with dispatch volumes of 35.2 mn tons in September 2019—the fifth consecutive month of weak dispatches.
Tech Mahindra rating: Add — Enterprise segment prospects getting better
Tech Mahindra indicated that the broader slowdown in the auto industry reflected in weak growth numbers for the manufacturing vertical.
Lending rates likely to soften after repo rate, MCLR cuts
Average term deposit rates are broadly similar to term deposit rates (1-2 years) offered by most banks today; slightly lower than rates offered by SFBs.
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