MOSL: Morning India (17/June/19): 1. Godrej Consumer (Balance sheet improving, earnings revival awaited); 2. Hexaware Tech.; 3. KEC International; 4. S H Kelkar Co.; 5. Metals; 6. Utilities; 7. EcoScope
MOrning India (17/June/19): 1. Godrej Consumer (Balance sheet improving, earnings revival awaited); 2. Hexaware Tech.; 3. KEC International; 4. S H Kelkar Co.; 5. Metals; 6. Utilities; 7. EcoScope
Today’s top research idea
Godrej Consumer: Balance sheet improving, earnings revival awaited
Management meet and financial analysis takeaways
- Domestic volumes should grow faster compared to 4QFY19 on expected recovery in demand environment, traction on new products and better utilization of expanded distribution but material revival in volumes and earnings will take time.
- Balance sheet performance -a key concern area in the past- has been good in recent years, particularly on cash conversion cycle, which declined from 47 days to 14 days in the past three years (on average basis) and from 60 days to 11 days on year-end basis. Nevertheless material ROCE improvement beyond 17.7% in FY19 (16.5% in FY16) needs strong earnings revival to come through.
- Valuations of 34.7x FY21, while cheaper than peer average, offers limited upside on considering weaker than best of breed peer earnings visibility and less than peer ROCE levels (at least currently). Maintain Neutral.
Piping hot news
India may trade places with US to ship items to China
- India has identified 151 products that it can export to China instead of the US and benefit from the price advantage thrown up by the retaliatory higher duties slapped by the Xi Jinping government on US products amid the intensifying trade war between the two countries. These include diesel engines, X-ray tubes, antibiotics, copper ores, granite, xylene, inverter and ketones, said people with knowledge of the matter.
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.