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MOSL: Morning India (17/January/20): 1. Telecom - Court verdict (SC dismisses AGR liability review petition); 2. Cyient (Downgrade to Neutral); 3. Power & Coal monthly

Morning India (17/January/20):

Today’s top research idea
Telecom: SC dismisses AGR liability review petition
** In an unexpected move, India's apex court has dismissed the review petition filed by telecom companies to grant a relief on AGR liabilities, which have to be paid before the deadline of 24th Jan'20. We note that telcos owe ~INR920b in AGR dues to the government, primarily Bharti (~INR343b) and VIL (~INR443b).

** The verdict may put a severe burden on telcos and have unconceivable repercussions, particularly against the backdrop of VIL facing a risk of shutdown (it may result in INR1.2t debt default, large-scale job losses and subscriber churn).

** We thus believe that the final outcome may not be linear and that there could be a payment extension or moratorium to say the least. Irrespective of the outcome, Bharti is well prepared and, along with RJio, appears poised for strong market share gains.

Piping hot news
Blow to Airtel, Vodafone Idea as Supreme Court dismisses AGR plea
The Supreme Court on Thursday dismissed pleas, including those of Bharti Airtel Ltd and Vodafone Idea Ltd, to review its earlier judgement that had asked telecom operators to pay more than ₹1 trillion of dues to the government. Bharti Airtel, which has to pay ₹35,586 crore to the government by 24 January, and Vodafone Idea, which owes the government ₹50,000 crore, said they were evaluating filing curative petitions.