Category: Equity Research

The slump in automobile sales in Q408 adversely affected Bosch’s performance and accordingly sales declined by 15% y-o-y to INR10.4bn. A higher contribution from the non-automotive business affected EBITDA margins which declined sequentially by 200bps to 16.8%.PAT declined by 24% y-o-y to INR942mn.

Penetration of diesel cars in India (~20% in India vs. ~53% in Western Europe) is set to increase as OEMs plan to launch CRDi-powered diesel cars. Also, diesel is ~40% cheaper than petrol in India. Already we have seen that diesel powered cars are (more…)

Adverse macro environment affects domestic and international operations – Parent revenues affected by slowdown in CV sales (~40-45% of parent revenues). We expect muted recovery, spurred by pre-buying in 3/4Q FY10. Overall revenues and profit estimates at the parent level benefit from a weaker rupee and incremental non auto exports. In the subsidiaries, we now forecast losses at the EBITDA level over FY10 – given the expected c40% slump in European truck sales.

Non Auto Business: There is no visibility of revenues in the non-auto business. (more…)

Goldman Sachs in a report reiterates a SELL on ONGC primarily due to 5 main reasons – overseas growth strategy has not been very effective, unexciting execution track record in domestic business, limited focus on cost control, corporate governance issues with cash withdrawals by promoter [Government], and ONGC being structurally unattractive with downside from lower oil price but limited upside from price rebound. (more…)

Morgan in a report released just minutes ago has upgraded Marico Ltd to OVERWEIGHT with target price revised upwards.

Copra prices (Marico’s key input cost) have declined 10% in recent days. Similarly, Safflower oil prices, a key input for its edible oil business, have fallen 25% over the past couple of weeks. We believe this sharp fall in key input costs improves the probability for margin expansion in Marico’s hair care business and higher volume growth in its edible oil business. (more…)

Post Merger of Reliance Petroleum with Reliance Industries Ltd, here is what various brokerage house expect and recommend to investors.

ABN Amro:
RPET assets are likely to be taken over at their current book value. Expect minimal cost savings arising from the merger given that key cost elements like crude sourcing will have been optimised. Proforma post-merger EPS for FY10/11F drops by 1-3% due to the rise in RPET’s project costs rather than because of the merger itself.

Finally, ABN Amro recommends a (more…)

L&T has been in the news for wrong reasons – Hostile bid for Satyam Computers which has eroded its stock price as Satyam’s Scam unfolded.

Investors who have destroyed wealth in the past 12 months in L&T have been asking about the performance of the stock in the month of March. Credit Suisse analyzed the historical performance of the stock in the past 16 years (more…)