EUR 120.00 For Business Accounts Only

MOSL: Morning India (08/August/19): 1. HPCL; 2. Maruti Suzuki; 3. Ecoscope; 4. HCL Technologies; 5. M&M; 6. Pidilite Inds; 7. Tata Steel; 8. Cipla; 9. Siemens; 10. Petronet LNG

MOrning India (08/August/19): 1. HPCL; 2. Maruti Suzuki; 3. Ecoscope; 4. HCL Technologies; 5. M&M; 6. Pidilite Inds; 7. Tata Steel; 8. Cipla; 9. Siemens; 10. Petronet LNG

 

Today’s top research Idea

HPCL: Better core GRM; throughput lower due to shutdown at Mumbai refinery (Upgrade to Buy) 

• Lower than estimated GRM (including inventory), throughput and marketing margin resulted in reported EBITDA of INR14.5b in 1QFY20 (-55% est., -61% YoY). Adjusting for huge inventory loss of INR5.4b, EBITDA for the quarter was up 42% YoY at INR19.9b. Forex gain stood at INR1.9b v/s loss of INR5.4b in 1QFY19.
• PAT came in at INR8.1b (-53% YoY) in the quarter. Low oil prices, stable rupee and continued lack of competition may result in continuation of healthy marketing margins benefitting HPCL the most. We upgrade the stock to Buy with a target price of INR295, valuing it at 1.2x FY21 PBV.

Piping hot news

To push growth, RBI cuts repo rate by 35 basis points to 5.4%

India’s central bank announced an array of conventional and unconventional measures to boost slowing economic growth, including reducing the benchmark interest rate by an irregular 35 basis points (bps), its fourth rate cut this year. The Reserve Bank of India’s six-member rate-setting panel on Wednesday cut the repurchase rate to 5.4%, the lowest in almost a decade and more than the 25bps cut expected by most economists. It also decided to retain the monetary policy’s current accommodative stance.