EUR 120.00 For Business Accounts Only

MOSL: Morning India (01/February/19): 1. Power Grid (In-line); 2. Bharti Airtel; 3. Dabur India; 4. Vedanta (Downgrade to Sell); 5. Hero Motocorp; 6. UPL; 7. Petronet LNG; 8. Indiabulls Hsg. Fin.

MOrning India (01/February/19): 1. Power Grid (In-line); 2. Bharti Airtel; 3. Dabur India; 4. Vedanta (Downgrade to Sell); 5. Hero Motocorp; 6. UPL; 7. Petronet LNG; 8. Indiabulls Hsg. Fin.

 

Today’s top research idea

Power Grid: In-line performance; receivables are increasing

• PAT increased ~14% YoY to INR23.3b in 3QFY19 (in-line). PAT adjusted for the prior period and the impact of wage revision was up ~9% YoY to INR23.6b (+9.2% YoY for 9MFY19).
• Receivables have nearly doubled in nine months to INR70.6b. PWGR has ~INR770b of projects pending capitalization, which provides visibility of EPS CAGR of 9% over FY18-21.
• At CMP, the stock trades at 1.5x FY20E P/BV for RoE of ~16% and CoE of ~10-11%. If we were to assume no growth after FY20, full PAT will be available for dividend distribution. The stock would be trading at a dividend yield of ~10-12% with very low risk. Maintain Buy.

Piping hot news

RBI removes Bank of India, Bank of Maharashtra ,Oriental Bank of Commerce from PCA framework

• The Reserve Bank of India on Thursday removed three state-owned banks from its weak-bank watch list, a move that will lift lending restrictions on them. “It has been decided that Bank of India (BoI) and Bank of Maharashtra (BoM) which meet the regulatory norms including Capital Conservation Buffer (CCB) and have Net NPAs (non-performing assets) of less than 6 per cent as per third quarter results, are taken out of the PCA (prompt corrective action) framework subject to certain conditions and continuous monitoring,” the RBI said in a statement.