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Graphite electrodes are used in the EAF route of steelmaking. Global steel demand has been negatively impacted by a weakening global economy. World Steel Association (WSA) forecasts global steel demand will reach 1735 million tonnes (MT) in CY19, a modest increase of 1.3% and 1752 MT in CY20, an increase of 1.0% over 2019. In the current muted demand scenario, excess production of graphite electrodes in China due to relatively slow ramp up of EAF capacities has led to cheaper graphite electrode exports to other countries (from China). Against the backdrop of removal of...

Aarti Industries Ltd (AIL), for Q1FY20, reported steady set of numbers. Revenue has grown by 8.8% (on adjusting HPC business revenue) mainly due to higher utilisation across all segments. EBITDA grew by 26.1%YoY to INR2.36bn with 439bps improvement in margins to 21.7% on account of increasing share of value added and high margin products. Net profit grew at a higher pace of 53.9% to...

NMDC reported Q1FY20 earnings in line with our estimates. The sharp rise in Change in Estimates | Target | Reco iron prices aftermath collapse of Vale's Brumadinho dam in Brazil helped NMDC to post strong earnings growth in last couple of quarters. However, we...

The competition in the Indian innerwear industry is intense and most innerwear players (excluding new entrant Aditya Birla Fashion) have registered a flattish revenue growth. Rupa in-spite of spending ~ 7% of revenues on branding and investment and using celebrity endorsement has not been able to achieve acceleration in revenue growth for the past two years. In a bid to enhance the share in growing premium menswear segment, the company undertook various licencing of international brands. However due to intense competitive scenario (Van Heusen from ABFRL and...

Essel Propack (EPL) reported flattish topline (down ~9% QoQ) led by poor performance in AMESA and EAP regions (mainly India and China respectively). While India demand slowdown due to macro headwinds, the Chinese revenue slowdown was largely due to ongoing US-China trade issues. Despite significant rise in the contribution of non oral care to topline (up from 40.7% in Q1FY19 to 46.6% in Q1FY20) the EBITDA margin was under pressure mainly due to sharp decline in the profitability of the AMESA regions. We believe, the lumpiness of domestic business coupled with...

Bosch has an established leadership in diesel technology (starter motors, common rail systems), with market share in gasoline fuel injection systems lower courtesy its late entry into that space. With BS-VI rollout, lower capacity diesel engines are expected to migrate to gasoline given the prohibitive price increase in the former would further exacerbate existing cost difference between the two technologies. While diesel is seen remaining the dominant fuel choice among UVs, larger engine capacity passenger cars, tractors and the CV space, Bosch's addressable market is...

TMX reported a robust Q1FY20 revenue growth of 35% YoY aided by strong execution in energy segment (45% YoY). While EBITDA margin improved by 42bps YoY to 7.1% due to drop in employee cost and other expenses . Improved operating margin and lower tax rate of 30% (vs 36% Q1FY19) increased earnings by 28% YoY. But order book de-grew by 18% YoY (OB to sales at 0.8x TTM...

US business grew by 125%QoQ driven by healthy performance in the base portfolio with no major price erosions. Remediation work has started in response to the warning letter (WL) by USFDA on Puducherry plant (~7% of the total revenue of SS) with the management transferring production to other locations. Exit from Arrow investments at Australia got successfully completed with the proceeds reducing the debt significantly ~Rs1000cr. Regulated markets witnessed a modest growth (13%YoY) while...

Given strong demand outlook in domestic & export market in the long term, the capacity augmentation is on track. We believe that capacity addition, focus on high margin products and robust off-take from Specialty chemicals and Pharma segment, will continue to drive profitability. However, given weak macro economic situation and slowdown in...

Q1FY20 consolidated revenue declined by 7.7% YoY on weaker sales volumes (-20.8% YoY). Standalone TML (S) revenue dropped by 19.9% YoY and Jaguar Land Rover (JLR) revenue was down by 5.4% YoY. Adj. EBIT loss came in at Rs. 1,562cr vs. Rs. 548cr loss in Q1FY19, primarily on negative operating leverage from lower wholesale business. Adj. EBIT margin dropped 170bps YoY to -2.5%. Adj. loss after taxes stood at Rs. 3,590cr vs Rs. 1,902cr in Q1FY19 (Adj. loss per share at Rs. 10.6 vs. Rs. 5.6 in Q1FY19)....