MOSL: Morning India (14/August/18): 1. IOCL; 2. Tata Steel; 3. Cadila Healthcare; 4. Aditya Birla Capital; 5. United Breweries; 6. NHPC; 7. Oil India; 8. Dalmia Bharat; 9. Endurance Tech; 10. Ecoscope
MOrning India (14/August/18): 1. IOCL; 2. Tata Steel; 3. Cadila Healthcare; 4. Aditya Birla Capital; 5. United Breweries; 6. NHPC; 7. Oil India; 8. Dalmia Bharat; 9. Endurance Tech; 10. Ecoscope
Today’s top research idea
IOC: Adjusted EBITDA significantly below estimate
- EBITDA of INR126b (+142% YoY, +14% QoQ) was above our estimate of INR107b. However, total inventory gain stood at INR79b (est. of INR26b) – refining inventory gain stood at INR59b (USD6.9/bb) and marketing gain stood at INR19.5b. Adjusting for the same, EBITDA stood at INR47.1b (est. of INR80.4b; -49% YoY, -38% QoQ), significantly below our estimate due to a poor core GRM.
- PAT stood at INR68.3b (est. of INR57.5b; +50% YoY; +31% QoQ). Forex loss during the quarter stood at INR18.1b v/s a gain of INR6.1b in 1QFY18 and a loss of INR6.8b in 4QFY18.
- IOCL is trading at 8.6x consol. FY20E EPS of INR18.8 and 5.9x FY20E EV/EBTIDA. We value refining and marketing at 6x EV/EBITDA, petchem at 5x EV/EBITDA, and pipeline at 7.5x EV/EBITDA. Reiterate Buy with a TP of INR254. Higher crude oil price remains the biggest risk.
Piping hot news
Rupee hits fresh lifetime low as Turkey keeps investors on edge
- The rupee slumped to a fresh record low on Monday, just 7 paise away from hitting 70 a dollar mark and equity markets closed lower as emerging markets weakened amid concern over the risk of contagion from Turkey’s financial-market turmoil. The home currency ended at an all time low of 69.93 a dollar, down 1.56%—its steepest fall since 3 September 2013—from its previous close of 68.84. The rupee had opened at 69.49.
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.
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