EUR 120.00 For Business Accounts Only

MOSL: Morning India (03/April/19): 1. Reliance Inds. (Downgrade to Neutral); 2. Marico; 3. Expert Speak (Financial – Banks); 4. EcoScope – EAI; 5. Automobiles (Bajaj Auto volume nos); 6. India Politics

MOrning India (03/April/19): 1. Reliance Inds. (Downgrade to Neutral); 2. Marico; 3. Expert Speak (Financial – Banks); 4. EcoScope – EAI; 5. Automobiles (Bajaj Auto volume nos); 6. India Politics

 

Today’s top research idea

Reliance Industries: Weakness ahead in refining and petrochem; Downgrading to Neutral due to limited upside

• RIL's stock price has almost tripled over the last five years, outperforming the Nifty by 122% on a cumulative basis. This has been driven by the strengthening refining/petrochem businesses and the significant build-up in its retail and telecom segments.
• Since our upgrade in Oct'17, RIL has rallied by 59%, outperforming the Nifty by 44%. The stock now trades closer to our fair value. Moreover, we expect the core business to face headwinds in 2019.
• While telecom and retail remain in a significant build-up mode, we have already factored this in our estimates. As there is limited upside from here, we downgrade the stock from Buy to Neutral.

Piping hot news

Manufacturing PMI at 6-month low

• Manufacturing activity slowed to a six-month low of 52.6 in March due to lower levels of new orders and production, according to a private sector survey. The Nikkei India Manufacturing Purchasing Managers’ Index came in at a lower reading in March from 54.3 in February. A reading over 50 implies expansion while one below that denotes a contraction in activity.