Posts tagged All News
Alibaba founder Jack Ma set to visit India in Nov (14-09-2015)
BJP, NDA-ruled states dominate top five in ease of business (14-09-2015)
India difficult place for business; reforms needed: WB (14-09-2015)
Hard bargaining ahead for Reliance Jio, RCom (14-09-2015)
Snapdeal’s pre-approved loans for festive season (14-09-2015)
MIM will fight independently in Seemanchal: Asaduddin Owaisi (14-09-2015)
BJP placates Manjhi, unveils seat-sharing formula for Bihar (14-09-2015)
Retain hold on M&M, target Rs 1,330: Religare (14-09-2015)
We attended M&M’s TUV300 launch at the company’s Chakan plant in Pune. Aggressively priced at R6.9 lakh and positioned as a rough-and-tough vehicle, the TUV300 appears better suited for semi-urban/rural markets and is the first of two new compact SUVs expected from MM this year.
Launches augur well for M&M’s auto segment volumes, but scanty rainfall in most parts of India has cast a pall on the tractor business. We cut estimates to build in lower volumes and revise our Sept’16 TP to Rs 1,330 (from Rs 1,400). Maintain hold.
M&M launched the TUV300 in seven variants, including an AMT version with pricing in the range of Rs 6.9 lakh to Rs 9.12 lakh (ex-showroom Pune). Slated as competition for the likes of EcoSport and Duster, the TUV300 will have a 1.5-ltr diesel engine, a tank-type build, Scorpio-type chassis and an engine similar to the XUV500 and Scorpio. In all, MM has spent ~Rs 1,200 crore on R&D, designing, tooling and engines.
MM can currently manufacture ~3,300 TUV300 units a month which will be ramped up to 5,000 vehicles in a month’s time. We believe the vehicle’s rough-and-tough positioning could find more takers in rural and semi-urban markets. M&M already dominates the segment with 75%+ share in its flagship Bolero and Scorpio models.
The new launch will likely give a fillip to volumes, but could also cannibalise on Bolero sales.
Upgrade JSW Energy to buy, target Rs 112: HSBC (14-09-2015)
JSW Energy formally announced the final closure on its hydro assets purchase from JPVL. While the original deal was announced at Rs 9,800 crore, the actual transaction happened at Rs 9,275 crore after discounting for the capacity of Karcham Wangatoo. There was a slackening in generation from the thermal projects of JSW in Q1FY15 and in July due to the planned shutdown of the Vijaynagar plant. However, the generation from the project is in full steam for last 40 days as per the data available.
In addition, the generation from the hydro assets now acquired by the company has been strong in the current year, though with only two months of hydro operations remaining, the full benefit of the hydro generation will flow to the company only in the next fiscal year.
The asset sale was made necessary due to the high interest cost for the company and losses on account of cancellation of coal blocks of its 1.3GW Nigrie project, which still continues to recover only about 38% of its fixed cost.
The company, which won the coal block is looking to sign the PPA as well as to start operations of its 1-GW Bara project before the end of this financial year.
Upgrade JSW Energy to buy with a target price R112 and retain buy on JPVL with same TP of R9.2 — we believe the stock correction over last few months provides valuation comfort for both stocks. However, the new assets are likely to be an earnings driver for JSW Energy. Downside risks remain: The sector level issues, high debt cost, and SEB finances.