IIP – Broad-based slowdown IIP for August contracted 1.1% YoY vis-a-vis 4.3% YoY growth last month and expectation of 2% YoY growth. Given the volatility in monthly numbers, we prefer to analyse it on a trend basis (3MMA). On this basis, IIP decelerated to 1.7% YoY (from 3.6% YoY last month) with a broad-based slowdown […]
Aviation – Q2FY20 result preview – Seasonal weakness to take a toll We expect Indigo and Spicejet (SJ) to report losses in Q2FY20 due to seasonal weakness, albeit lower YoY. Key highlights: 1) we expect Indigo (up 25% YoY) and SJ (up 46% YoY) to continue to clock robust RPKM growth versus mid single-digit industry […]
Cement – Q2FY20 result preview – Demand pangs; recovery in H2FY20 key The muted cement demand trend seen in Q1FY20 (owing to general elections) persisted through Q2FY20 amid ongoing economic slowdown and furious rains. While government data indicate flat volumes for H1FY20, industry participants estimate a dip of about 3%. Cement prices succumbed to volume […]
We estimate the healthcare sector’s Q2FY20 EBITDA (pre-Ind AS 116) would grow 16% YoY driven by a 17% YoY increase in hospitals and 13% YoY improvement in diagnostics in the wake of heavy monsoon this year. The YoY performance in hospitals is likely to be strong due to improvement in new hospitals’ performance and cost-cutting […]
We expect OMCs to report stellar Q2FY20 earnings led by benchmark GRM almost doubling to USD6.6/bbl QoQ. Key highlights: 1) OMCs: We expect EBITDA to surge 30-70% QoQ driven by higher GRM & abatement of inventory losses; 2) RIL: We estimate EBITDA growth of 7.6% QoQ with refining strength offsetting petchem weakness; 3) CGD: While […]
Metals and Mining – Q2FY20 result preview-Slip, slide and tumble We expect companies under our coverage, particularly ferrous, to report tepid earnings in the wake of lower prices and weak demand. Key highlights: 1) Ferrous companies might suffer EBITDA compression of INR2,500–3,000/t. 2) Volumes are expected to decline for all major ferrous players, except JSPL. […]
Key Takeaways of Fourth Bi-Monthly RBI Monetary Policy Key Policy rate Changes · The MPC have decided to maintain the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within target and subsequently reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points […]
The consumer goods sector has been struggling against low growth for the past two quarters primarily due to the consumption slowdown in rural India. We anticipate this slowdown would worsen with revenue, EBITDA and PAT decelerating YoY to 6.4%, 10.9% and 18.3% in Q2FY20 from 8%, 14.8% and 13.8% in Q1FY20, respectively. That said, PAT […]
We estimate the top five Indian IT players — Infosys, TECHM, HCLT, TCS and Wipro – would report organic revenue growth of 1.9–3.5% QoQ in constant currency (cc) in Q2FY20. However, a strengthening USD would pare 50–60bps of cc growth in our view. Barring TechM, we expect margins of the remaining four to rise by […]
Mahindra & Mahindra (M&M) announced a joint venture (JV) with Ford India (FIPL) for 51% equity stake and 50% of the board seats. Key positives are: 1) widens the scope of the ongoing collaboration to include product development, manufacture & distribution; 2) brings cost synergies due to platform sharing, joint platform sharing (M&M expects this […]