28 January 2020 MSILs 3QFY20 results are a reflection of the companys efforts to revive demand through discounts during the festive season and ahead of year change/BS6 transition. We believe MSILs operating performance has bottomed out and recovery is expected from 1QFY21. Maintain MSILs 3QFY20 revenues/EBITDA/PAT grew 5%/9%/5% YoY to ~INR207b/INR21b/INR15.6b respectively. Domestic PV market share recovered 130bp YoY (+240bp QoQ) to 52%. Net realization increased 3% YoY (-6% QoQ) to ~INR473k (v/s est. QoQ decline was due to higher discounts and adverse mix. Discounts inched up to ~INR33k/unit (v/s ~INR24k in 3QFY19 v/s INR25.8k in 2QFY20). Gross margin declined ~150bp QoQ due to (a) higher sourcing from Gujarat (accounting impact), (b) higher discounts (~190bp QoQ), (c) lower production (v/s wholesales; ~100bp QoQ impact), and (d) ~60bp benefit of lower cost. EBIT margins improved 10bp YoY (+200bp QoQ) to 6% (v/s est.