EUR 120.00 For Business Accounts Only

MOrning India (31/May/19): 1. Coal India (Better grades and lower CoP drive outperformance); 2. ONGC; 3. Hero Motocorp; 4. EcoScope; 5. Bharti Airtel; 6. United Spirits; 7. Bharat Electronics; 8. NHPC; 9. SAIL;

MOrning India (31/May/19): 1. Coal India (Better grades and lower CoP drive outperformance); 2. ONGC; 3. Hero Motocorp; 4. EcoScope; 5. Bharti Airtel; 6. United Spirits; 7. Bharat Electronics; 8. NHPC; 9. SAIL; 10. Alkem Lab

 

Today’s top research idea

Coal India: Better grades and lower CoP drive outperformance

• Coal India's 4Q adj. EBITDA (ex-OBR) grew 4% YoY driven by higher realisations and volumes, partly offset by higher wage bill. Excluding wage bill, cash cost was down ~4% YoY.
• We expect Coal India's cash costs per ton to decline as it continues to implement productivity measures and shut down old mines. This, along with 5-6% growth in volumes, should aid ~8% earnings growth over the next two years.
• We find the stock attractive at current levels at ~4xEV/EBITDA (vs. historical average of 7x) and P/E of 7-8x (vs. average of ~14x).

Piping hot news

Modi 2.0 era begins; 58-member team takes charge

• Narendra Modi was on Thursday sworn in for his second term as the Prime Minister at a glittering ceremony in the forecourt of the Rashtrapati Bhavan, heralding the continuity of a welfare-oriented right-wing government for the next five years. With the BJP-led NDA having swept the recent Lok Sabha elections, winning 352 of 542 seats and securing a huge mandate, there are strong expectations that Modi 2.0 will deliver fast-track reforms on two crucial factors of productivity — land and labour — in the coming days, thereby helping the stuttering economy to grow fast.