businessfortnight

Problems persist but proposed equity infusion raise hopes of stability YES’ core earnings as well as provisions in Q2FY20 were in-line with our estimates and reflected the in-line trend observed in business momentum. However, balance sheet deterioration continued with incremental additions to the sub-investment grade book continuing to be high.  The confirmation and reiteration of a US$1.2bn binding bid for equity infusion that YES had received was the most important development in months for YES. The management stated it was in discussions with more investors for further infusion. We believe it is a step in the right direction and if it goes through regulatory approvals, shall bring in much needed stability to YES’ core capital. We therefore turn ‘ACCUMULATE’ from ‘SELL’ while retaining the price target at Rs80. –  Core earnings in-line, net loss led by one-off DTA charge: YES’ core earnings, provisions, and business momentum were in-line with estimates. The miss at operating profit

Launched just a few years ago in India, E-Pharmacies have grown from strength-to strength and have re-hauled the drug-dispensing business in the country. Through this note, we take a deep dive into the Indian pharmaceutical network to understand how online pharmacies have reshaped India’s retail medicine-distribution landscape. –      The Indian pharma trade channel is transforming, thanks to the advent of online pharmacies and consolidation of distribution network, which we believe is a win-win combination for manufacturers and patients. Currently, E-Pharmacies have ~17m registered customers; of this, ~3.8m are already active and making purchases. The number is estimated to grow exponentially in the coming years. –      Online pharmacies provide real-time detailed data, which will reduce opaqueness in the current system. Data analytics helps manufacturers to forecast demand more accurately and to understand target customers better. –      Further, even distributor consolidation has s

INDIA, 31 st   October, 2019 –  Gleneagles Development Pte Ltd (“GDPL”), a subsidiary of IHH Healthcare (“IHH”) , has appointed Ashok Bajpai as the new Chairman of Continental Hospitals in India, effective 24 October 2019. Bajpai is currently Group Head of Operations and Integration at IHH, where he is responsible for integrating the Group’s business processes by leading cross-functional and organisational teams across IHH to ensure alignment while building a culture of accountability. He brings with him close to 30 years of experience with leading multinationals across South Asia and Asia Pacific, including in other hospital groups. He will fulfil this role concurrently with his latest appointment with Continental Hospitals. As Chairman of Continental Hospitals, Bajpai will work with the rest of the Board of Directors to guide and advise the management team as it delivers on its business strategy, while ensuring alignment and continual improvement in its service development, physici

  A s Neel neared 45 years of age and both his children enthusiastically made plans for college, he reflected back on his younger days and wished he could go back in time and advise his younger self on financial matters. While his first job at an MNC had ensured he and his family receive life insurance, investments were something he had only begun concentrating on when he turned 35. His children’s plans for college was definitely going to cause a dent in their savings, and he fervently wished he had begun investing much earlier when he had lesser responsibilities. He now knew that investments could range from across equity, debt or even to cover elements like gold which acted as a hedge against inflation; but he wished he had known that much earlier. Now, he knew about mutual funds and the various ULIP benefits he could gain from investing with a reliable insurer. With the Easy Invest Online Plan, he was reaping benefits by paying premiums as low as Rs. 4,000 a month and getting both

TATA MOTORS: JLR recovery visible, India bottoming out; upgrading to Buy (TTMT IN, Mkt Cap USD5.6b, CMP INR127, TP INR185, 46% Upside, Upgrade to Buy) –      Consol. revenue declined ~9% YoY to ~INR654.3b (est. of ~INR632.2b) in 2QFY20. EBITDA grew ~8% YoY to ~INR71.6b (est. of ~INR44.9b). Adj. net loss was at ~INR1.9b (est. of ~INR14.8b) v/s ~INR5.6b in 2QFY19. For 1HFY20, revenue/EBITDA fell 8.5%/13% YoY; net loss was at ~INR37.9b. –       JLR – mix, low VME/warranty boost margins:  JLR’s performance was strong, with the EBITDA margin at 13.8% (est. of 7.7%) – one of the highest in four years. This reflects (a) a recovery in China and resilient US/EU, (b) a better mix, (c) Project Charge delivery, (d) lower D&A and (e) favorable FX. PBT before EO stood at GBP166m (est. of GBP77m loss). FCF was negative at GBP64m (v/s GBP623m in 2QFY19). –       S/A – operating deleverage, write-off in PV business hurt margins:  India business was impacted by inventory reduction, resulting in re

A report on Bosch from Motilal Oswal Institutional Equities: According to the management of Bosch (BOS) to understand the evolving regulatory, technological and competitive landscape in the sector. Increasing complexity due to stringent regulatory changes augur well for a technology-focused player like BOS, though the seamless translation of LoI is important for BS6 business. BOS is confident of leveraging its global knowhow at the parent level for EVs and would offer solutions from strong hybrids to BEVs. Key highlights: Changing regulatory/technological landscape augurs well for BOS –       Given the changing regulatory context over the next few years, several technologies are expected to emerge. While there are numerous different technologies available for the requirements of OEMs, BOS has all the necessary solutions to offer to OEMs. –       As a company, BOS is a technology-agnostic player and offers solutions such as future compliant ICE solutions, Battery EVs and futuristic fue

2QFY20 report on Bajaj Finance and L&T Finance holdings: BAJAJ FINANCE: Strong performance, fee traction robust –       Bajaj Finance’s (BAF) PBT grew 41% YoY in 2QFY20, while PAT increased 63% YoY to INR15b owing to the lower tax rate. The quarter was characterized by continued strong AUM growth and stable margins/asset quality. –       Consol. AUM increased 38% YoY to INR1.4t, led by strong growth across segments, barring commercial lending. BAF continues being cautious on digital products, auto finance and SME finance. The share of new loans to existing customers increased YoY from 66% to 70%. –       The company continues financing a large share of Bajaj Auto’s 2Ws (52%) and 3Ws (46%) compared to the historical average of 30-35%. –       Margins (calc.) were stable QoQ at 12.1%, with CoF too largely stable at 8.0%. The share of bank borrowings increased 500bp QoQ to 38%. –       Fee income continues growing faster than the balance sheet – it was up 66% YoY to INR6.3b. Manageme