EUR 120.00 For Business Accounts Only

MOSL: Morning India (11/August/21): 1. Jindal Steel and Power (Deleveraging to continue; JPL's divestment to support a further decline in debt); 2. Motherson Sumi; 3. Whirlpool of India; 4. Manappuram Finance;

MOrning India (11/August/21):

Today’s top research idea

Jindal Steel and Power: Deleveraging to continue; JPL's divestment to support a further decline in debt

• JSP's 1QFY22 result was strong as expected, with the highest ever EBITDA/t of INR28,098/t (7% above our estimate). However, standalone EBITDA fell 7% QoQ to INR45.3b due to a 16% QoQ decline in volume. Adjusted for the JPL divestment, net debt fell only 4% QoQ to INR152b due to an increase in working capital.
• We raise our FY22E EBITDA by 13% on expectations of higher steel prices in the fiscal. Strong cash flows, coupled with cash proceeds of INR30.1b from the JPL divestment, should lead to a fall in net debt to INR34.5b by FY23E, implying 0.3x FY23E EBITDA. We reiterate our Buy rating.

Piping hot news

Economy to return growth by March 2022, banks NPAs to regain normalcy late: Moody's

• The asset recovery Indian banks is set to get delayed as the second wave has crippled economic activity, says Moody's Investor Services. “For India (Baa3 negative), Moody's projects the economy will return to growth in the fiscal year ending March 2022,” the global rating company said in a note. “But the severe second coronavirus outbreak will delay improvements in asset quality.”