EUR 120.00 For Business Accounts Only

MOSL: Morning India (09/April/19): 1. Ambuja Cements | Annual Report Update (Profitability impacted by cost pressure); 2. India Politics; 3. Info Edge; 4. NIIT Tech; 5. Delta Corp; 6. Lakshmi Vilas Bank; 7. Met

MOrning India (09/April/19): 1. Ambuja Cements | Annual Report Update (Profitability impacted by cost pressure); 2. India Politics; 3. Info Edge; 4. NIIT Tech; 5. Delta Corp; 6. Lakshmi Vilas Bank; 7. Metals Weekly

 

Today’s top research idea

Ambuja Cement: Profitability impacted by cost pressure; Increase in working capital further impacts cash flow

• We have analyzed Ambuja Cement’s CY18 annual report. The infrastructure and the government’s ‘Housing for All’ initiative led to the cement industry growing 9% in CY18.
• But, Ambuja Cement witnessed its profitability getting hurt due to increased raw material and fuel prices. As a result of the cost push, cement EBITDA/t declined 6% YoY to INR781/t.
• Cash flow from operations before taxes and working capital changes declined by 6% to INR18.1b in CY18.
• Direct tax paid (net of refunds) increased by INR3.1b over CY17-18.
• Also, an increase of INR5.92b in working capital v/s a decrease of INR2.3b in the previous year impacted the cash flow. As a result, cash flow from operations after working capital and taxes declined 68% to INR5.96b in CY18. We value ACEM at 10x March’20 EV/EBITDA and its stake in ACC at 20% discount to market value (holding company discount) to arrive at a target price of INR206. Maintain Neutral.

Piping hot news

Net inflows into equity mutual funds more than doubles in March: Amfi

• Net inflows into domestic equity mutual funds more than doubled month-on-month from ₹5,122 crore in February to ₹11,756 crore in March, the highest since October 2018, according to data released by the Association of Mutual Funds of India (Amfi) on Monday. Year-on-year, net inflows into equity MFs registered a sharp rise of 76.59%, compared to ₹6,657 crore in March 2018.