February-16 domestic air passenger growth at ~20% YoY - Motilal Oswal

Domestic load factor at 87.2%; IndiGo’s domestic ASK/RPK share highest

* Domestic air passengers in India grew ~20% YoY (adj.) in Feb-17 (v/s +25.3% in Jan-17; +23.1% in 3QFY17). However, we believe this strong growth would be at the cost of yields, as seen in headline fares.

*While Feb-17 ASK growth stood at 17.8% YoY (adj.) (v/s +21.1

23/03/2017 3:03:28 PM | Posted in Broking Firm Views - Sector Report read full news
Neutral On Dr. Reddy's Laboratories Ltd For Target Rs.2,875.00 - Motilal Oswal

Duvvada 483 observations out; data integrity issues persist

* Dr Reddy’s Labs (DDRD) has been issued 483 observations (4–5 are repeated) by the US FDA for its Duvvada plant. The FDA investigation has also revealed data integrity issues (e.g., Observation 3, 4). Given that the FDA has maintained a zero tolerance policy toward oncology inject

23/03/2017 2:55:10 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral On Divi's Laboratories Ltd For Target Rs.600.00 - Motilal Oswal

Regulatory uncertainty to keep stock price range-bound in near term

* US FDA has issued an import alert on DIVI’s Visakhapatnam-based plant, Unit-2. However, it has exempted nine products including Naproxen and Gabapentin from the import alert list. n US FDA had inspected Unit-2 for eight days from November 29 to December 06, 2016, following whic

23/03/2017 2:48:03 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Delta Corp Ltd For Target Rs.229.00 - Motilal Oswal

Delta Corp (DELTA) is India’s only listed gaming company, with a dominant presence in Goa’s offshore casino market. It owns three of the six offshore (five operational) gaming licenses in the state of Goa. It has ~1,700 gaming positions in the state across its three offshore casinos, one onshore casino and recently commenced casino in Sikkim. DELTA has an integrated casino resort in

23/03/2017 2:33:30 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Marico Ltd For Target Rs.335.00 - Motilal Oswal

Demand outlook improving; focus on technology paying off

Rural growth and food inflation are the key monitorables

We met management of Marico (MRCO) to understand the company’s distribution and rural strategy. Key takeaways:

* We were impressed with the pioneeri

23/03/2017 1:27:39 PM | Posted in Broking Firm Views - Long Term Report read full news
Views On Vodafone - Idea merger - Motilal Oswal Sec

Below is the views on 'Vodafone - Idea merger' by Mr Gautam Duggad, Head- Research, Motilal Oswal Securities Limited

 

Deal contours – 1:1 Swap ratio

Vodafone will get 50% in the merged entity, implying 1:1 share swap. In the merged entity, Vodafone will get INR 552b

21/03/2017 5:21:25 PM | Posted in Special Event Reports read full news
IPO NOTE - CL Educate Limited - Motilal Oswal

Introduction :

Incorporated in 1996, CL Educate Ltd is engaged in providing various educational products and services. They operate through two segments i.e. Education & Training Programme (including sales of Study Material) and Vocational Training. The Company's Education & Training Program (including sales of Study Material) segment inclu

Budget implications likely to be neutral - Motilal Oswal

Alcoholic Beverages

Karnataka budget implications likely to be neutral

The event

* The Karnataka government, in its budget announcement on 15 March 2017, abolished the value added tax (VAT) on beer, wine and hard liquor. Three years ago, the state government had intro

20/03/2017 2:42:32 PM | Posted in Broking Firm Views - Sector Report read full news
Power Sector - WBERC highlights hidden cost in renewable energy - Motilal Oswal

WBERC highlights hidden cost in renewable energy

RoE of coal-based plants will be impacted if not compensated

* Renewable energy (RE) generation can have a meaningful impact on generation and utilization of conventional power capacities, although it will not displace the requirement for conventional capacities

20/03/2017 2:35:40 PM | Posted in Broking Firm Views - Sector Report read full news
Update On Entertainment Network India Ltd - Motilal Oswal

Ad volumes from new stations to support growth

Potential of 300-400bp margin expansion in next 3-4 years

¢ Three-pronged strategy of price increase in existing stations, expansion in new Phase- III stations, and growth in non-FCT business should support growth.

¢ EBITDA breakeven of new sta

18/03/2017 11:55:46 AM | Posted in Broking Firm Views - Long Term Report read full news
Update On Mahindra CIE Ltd - Motilal Oswal

Focus on M&A for exponential growth

* Focus on consolidation and customer diversification:

After facing bottlenecks at its European operations and slowdown at its key India customers (TTMT and MM) over the past two years, MACA will now look to expand and consolidate its businesses. CY17E growth is likely t

17/03/2017 2:56:03 PM | Posted in Broking Firm Views - Long Term Report read full news
Update On Dr. Reddy's Laboratories Ltd - Motilal Oswal

DR REDDY’S LABORATORIES

Strong cash flow growth, earnings remain subdued

Dr. Reddy’s Laboratories’ (DRRD) FY16 annual report analysis highlights a muted 4% increase in consolidated operating revenue to INR154.7b (FY15: INR148.2b), primarily on account of (a) USFDA warning letter, which has de

17/03/2017 2:24:40 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Tata Motors Ltd For Target Rs.653.00 - Motilal Oswal

JLR Feb-17 below est at 54,576 units (+4% YoY)

LR volume declines ~9%, while Jaguar grew ~57% driven by F-Pace and XE

* JLR Feb-17 wholesale volumes grew ~4.3% YoY (+12% MoM) to 54,576 units (estimate: 58,000 units), driven by F-pace and XE.

* Jaguar volumes grew ~57% YoY to 16,096 units (estimate: 16,500 units), dr

16/03/2017 3:24:46 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Jindal Steel and Power Ltd For Target Rs.180.00 - Motilal Oswal

On path to doubling India steel volumes in two years

Angul site visit highlights

We visited Jindal Steel and Power’s (JSP) Angul steel plant. The company appears to be on track to more than double its steel capacity at Angul to ~5mt (from current ~2mt) in two years by adding capacity through a more efficient hot metal p

16/03/2017 3:15:20 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral On Dr Reddy’s Labs Ltd For Target Rs.3,050.00 - Motilal Oswal

Duvvada formulations plant receives 13 observations in re-inspection

Risk of delay in Gleevec launch; regulatory concerns to weigh on stock price

* US FDA re-inspection of DRRD’s Duvvada-based oncology formulations plant got over yesterday. Post inspection, US FDA issued 13 483 observations.

* Though the obser

16/03/2017 3:04:34 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Escorts Ltd For Target Rs.596.00 - Motilal Oswal

Focus on improving market share

Levers in place to improve margins

* Escorts (ESC) improved its market share by 60bp in 9MFY17, driven by key strategic initiatives planned and executed in the last 3-4 years.

* It would continue to focus on increasing its share through deeper penetration and creating

15/03/2017 4:04:19 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Shriram City Union Finance Ltd For Target Rs.2,500.00 - Motilal Oswal

Early signs of revival

Streamlining of MSME loan sourcing to help optimize cost structure

* Post demonetization, SCUF was impacted with disbursements growth slowing down to 10% YoY and GNPL rising 45bp to 5.4% (without RBI dispensation). However, the months of January and February have been good, with collecti

15/03/2017 3:42:12 PM | Posted in Broking Firm Views - Long Term Report read full news
Sector Update Room Air Conditioners - Motilal Oswal Sec

Transition to inverters gathers pace

LG a key beneficiary; Voltas takes share in fixed-speed 3-star range We highlight below feedback from one of the largest retail chains for consumer durables in North and West India on air conditioner (AC) sales and the impact of LG’s exit from fixed-speed ACs. North and West India together account for 55-60% o

11/03/2017 11:45:31 AM | Posted in Broking Firm Views - Sector Report read full news
Buy Bata India Ltd For Target Rs.483.00 - Motilal Oswal

Results beat estimates

* Overall revenue grew 2.5% to INR6.4b (est. of INR5.7b) in 3QFY17 from INR6.25b in the corresponding period last year.

* EBITDA margin contracted 70bp from 12.5% in 3QFY16 to 11.8% in 3QFY17 (est. of 9.5%). EBITDA declined 3% YoY to INR757m (est. of INR540m).

* Other income came in at INR190m, higher than ou

9/03/2017 12:19:24 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Power Grid Corporation of India Ltd For Target Rs.227.00 - Motilal Oswal Sec

Results in line; PAT up ~20% YoY; other business post strong growth

* Reported PAT grew ~20% YoY/~3% QoQ to INR19.3b on strong capitalization in the preceding four quarters and robust growth at other businesses.

* Telecom business EBIT grew 42% YoY/12% QoQ to INR768m. Revenue increased 27% YoY/1% QoQ to INR1,444m.

* Consultancy busi

7/03/2017 2:52:30 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Manpasand Beverages Ltd For Target Rs.843.00 -   Motilal Oswal Sec

EBITDA margin beats estimate, capacity expansion on track; Buy

* Revenue in line; EBITDA and PAT higher than estimated:

MANB’s revenue grew 11.6% YoY to INR1,025m (our estimate: INR989m). EBITDA margin expanded 70bp YoY to 20% (our estimate: 18.1%), driven by 460bp YoY dip in other expenses, but partly o

7/03/2017 2:40:59 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Escorts Ltd For Target Rs.469.00 - Motilal Oswal Sec

Strong quarter; Margin expansion to drive earnings

* Tractors drive strong performance:

3QFY17 revenue grew robustly by 23% YoY to INR10,929m (est. of INR10,746m), driven by a strong performance in Tractors (revenue +26% YoY, volumes +25% YoY) and Construction equipment (revenue +14% YoY). On account of unfavo

6/03/2017 3:01:36 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Endurance Technologies Ltd For Target Rs.732.00 - Motilal Oswal Sec

Above est.; strong growth in subs; lower other exp. drives performance

* Consol. net sales grew ~2.4% YoY to ~INR13.2b (est. of ~INR12.9b), driven by ~10% growth in EU business. S/A revenues fell ~1% YoY, despite ~4.4% decline in 2W volumes, driven by RE, ramp-up with HMSI/HMCL, and strong growth in Aftermarket (+33% YoY) and Exports (+24%). EU busines

6/03/2017 2:35:16 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy United Breweries Ltd For Target Rs.1,044.00 - Motilal Oswal Sec

Operating performance slightly below expectations

* UBBL’s net sales declined 6.6% YoY (est. of -1.1%) to INR10.25b, with underlying volume down 8% YoY, in line with industry. Liquidity crunch post demonetization impacted sales. YTD volumes were flat in a period when industry declined by 2%. EBITDA declined 27.3% YoY (est. of -22

4/03/2017 2:42:48 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral ABB India Ltd For Target Rs.1,190.00 - Motilal Oswal Sec

In line at the operating level; order jump driven by HVDC order

* Operational performance in line with expectations:

4QCY16 revenues of INR24.9b (+3% YoY) came in below our estimate of INR26.8b, while EBIDTA margin of 11.3% (+40bp YoY) was ahead of our estimate of 10.2%. Miss on revenue was due to weak executi

4/03/2017 1:47:24 PM | Posted in Broking Firm Views - Long Term Report read full news