MOSL: Morning India (07/February/19): 1. JSW Steel; 2. Cipla; 3. Lupin; 4. Siemens; 5. Vodafone Idea; 6. Cummins India; 7. Indraprastha Gas; 8. Muthoot Finance; 9. PNB (Recoveries & upgrades outlook strong) 10.
MOrning India (07/February/19): 1. JSW Steel; 2. Cipla; 3. Lupin; 4. Siemens; 5. Vodafone Idea; 6. Cummins India; 7. Indraprastha Gas; 8. Muthoot Finance; 9. PNB (Recoveries & upgrades outlook strong) 10. Technology
Today’s top research idea
JSW Steel: Domestic margins stable but new assets were a drag; Strong volume growth and cost savings ahead; Maintain Buy
- JSW Steel’s (JSTL) 3QFY19 consol. EBITDA of INR45.1b (-8% QoQ) was 2% ahead of our estimate, led by higher-than-expected steel realizations, partly offset by losses at its recently acquired subsidiaries.
- Margins in 4QFY19 are likely to be lower due to the steel realization decline of INR3,000-3,500/t and the increase in coking coal cost by USD10/t, partially offset by lower iron ore prices. This should set the base for margins in FY20, as we see steel prices finding a floor in the global market.
- Operations at Acero and Afrepi are likely to turn around over the next 2-3 quarters. Acero can be a big opportunity over the next 2-3 years, given the favorable market conditions in the US. JSTL is on track for 6.7mtpa expansion. Many small cost-saving projects are getting completed in phases. Maintain Buy.
Piping hot news
Cognizant appoints Vodafone Executive Brian Humphries as CEO
- Cognizant for the first time has picked an outsider, Brian Humphries, as its new CEO. Humphries will replace Francisco D'Souza, who has been with the firm since 2007. Cognizant president Rajeev Mehta will step down on April 1, ending speculation that the firm would go for an insider to lead the technology company.
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