MOSL: Morning India (14/September/17)-1.Shree Cement 2. NTPC (Annual Report Update) 3. Telecom 4. Capital Goods

​MOrning India (14/September/17): 1.Shree Cement; 2. NTPC (Annual Report Update); 3. Telecom; 4. Capital Goods

Today’s top research idea

• ​Shree Cement: Slowing capacity addition to drive utilization improvement
  
• We hosted Mr H M Bangur, MD and CEO of Shree Cement, as part of 'CEO Track' at our conference. Key takeaways:
  
• Capacity addition is likely to slow down from 5% over FY12-17 to sub-2% in next five years. This, coupled with stable demand, should drive utilization improvement.
  
• Per capita cement consumption in India is among the lowest in the world, the improvement in which would drive growth in India's cement industry.
  
• Limestone reserves in India can support demand only for next 6-7 years.
  
• Import of cement does not pose a major threat for India due to relatively cheap price of delivered cement.
  
• SRCM should (i) deliver much higher growth than industry (led by higher capacity addition v/s industry) and (ii) continue enjoying cost efficiency (ability to put up cement plants at lower cost v/s industry).
  
• Relatively healthy balance sheet should help it reward investors with dividend payout.
  

Piping hot news

BPCL eyes GAIL, Oil India for merger

Bharat Petroleum Corporation Limited (BPCL), India’s second largest state-owned oil marketer is mulling a merger with GAIL (India), India’s largest gas distributor, and Oil India, the country’s second largest explorer, to create an integrated energy giant after the Centre approved the merger of rival Hindustan Petroleum Corp. Ltd. (HPCL) with ONGC.