EUR 120.00 For Business Accounts Only

Morning India (4/May/20): 1. Reliance Industries (Tech and consumer businesses – the new core); 2. India Strategy (a. Chart Book; b. COVID-19 Lockdown); 3. Hindustan Unilever; 4. Tech Mahindra; 5. UPL; 6. AU Sm

MOrning India (4/May/20):

Today’s top research idea
Reliance Industries: Tech and consumer businesses – the new core

** RIL is moving quickly to realize its plan of becoming net debt free by end-FY21. The company is now poised to receive ~INR1,037b through rights issue, the Facebook-Jio deal and the Fuel retailing JV with BP in the coming quarters.

** The contribution from standalone business to consol. EBITDA has declined to 60% in FY20 from 85% in FY15. Higher debt in the standalone business as well as better valuations for Tech/Consumer businesses (together account for 78% of valuations) leads us to believe these two segments are the new core.

** We value RIL at INR1,618/share (from earlier INR1,589) based on SOTP with equity values of INR358/share (earlier INR353) for the core business, INR500/share (earlier INR450) for Reliance Retail and INR760/share (earlier INR750) for RJio. Maintain Buy.

Piping hot news
India Extends Lockdown Beyond May 4 For Two More Weeks; What Will Open, What Will Not
The Indian government today has extended the nationwide lockdown as the coronavirus pandemic continues to spread unabated. However, there will be considerable relaxations in districts where there are no active cases. The lockdown will be further extended for two weeks beyond May 4, the Ministry of Home Affairs said in a press release. New guidelines will also be issued to regulate activities during the period based on the risk profiling of the districts, it said.