Axis Research Scorecard Report for Apr 23

Go First (Go) is reported to have been forced to seek voluntary insolvency resolution proceedings due to ‘serial failure’ of Pratt & Whitney engines resulting in the grounding of 50% of the fleet and is no longer in a position to continue to meet its financial obligations.

Our analysis of defence updates for Apr’23 indicates that: 1) IAF will soon approach MoD for acceptance of necessity (AoN) for the Multirole Fighter Aircraft (MRFA) programme in order to ensure that production begins by CY28.

Domestic 2W retails in Apr’23 (1.23mn units) were down ~7% YoY as festivities (Navratri) was in March this year vs in April in CY22. Other than this factor, we do not see much deviation in the trend of gradual recovery in overall domestic 2W retails, including rural.

Hero Motocorp (HMCL) has reported a decline of 5%/24% YoY/MoM at ~396k units. Motorcycle sales volume decreased 6%/24% YoY/MoM at ~369k units vs scooters, which increased 5% YoY (although lower 18% MoM) at ~27k units.

Banks’ sector deployment data for Mar’23 suggests overall non-food credit now stands at Rs136.6trn, up 15.4% YoY / 3.1% QoQ and 1.8% MoM, with the growth driven by services and retail segments.

The lipstick index is a term coined by Leonard Lauder, former CEO of Estée Lauder, to describe a phenomenon in which consumers tend to purchase more cosmetics, especially lipstick, during times of economic uncertainty.

The Asian markets are trading mixed as investors await the Reserve Bank of Australia's rate decision in the day ahead. Nikkei is trading lower by 0.04%, Hang Seng is trading lower by 0.56%, and Shanghai is trading higher by 1.14%.

MoM growth momentum