MOSL: Morning India (10/December/18): 1. HCL Technologies; 2. India Politics; 3. Oil & Gas; 4. Muthoot Finance; 5. EcoScope; 6. Cement
MOrning India (10/December/18): 1. HCL Technologies; 2. India Politics; 3. Oil & Gas; 4. Muthoot Finance; 5. EcoScope; 6. Cement
Today’s top research idea
HCL Technologies: Moves from partnering to buying IBM’s product IPs; We remain cautious given legacy/on-premise nature of some products
- HCLT announced the purchase of seven software products from IBM at a total cost of USD1.8b. The transaction is expected to complete in the next six months. This is the single largest investment in the company’s attempt to scale the Products and Platforms (Mode-3) business, as it seeks to add software product capabilities to its services business.
- The market opportunity for these products in areas of Security, Marketing and Commerce is pegged at USD50b+. Our revenue estimates are up 5%/6.5% for FY20E/21 post the announcement, and EPS estimates are higher by 3.7%/4.8%.
- While 5.5x EV/EBITDA is not a steep price for the products with strong profitability characteristics, at our estimated amortization, we would have concerns around the organic growth capabilities in the overall portfolio, with services too having slowed down materially in the recent past.
Piping hot news
Finance ministry to push through two more M&As among energy PSUs to meet selloff target
- The finance ministry is looking to push through at least two more M&A deals among the state-run companies in the energy sector after Power Finance Corporation’s acquisition of REC Ltd last week, as it makes a year-end dash to meet its disinvestment target.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.