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MOSL: Morning India (17/September/19): 1. Cement (Margins in North and Central India remain strong); 2. Gujarat Gas; 3. Expert Speak (a. Automobile; b. Real Estate)

MOrning India (17/September/19): 1. Cement (Margins in North and Central India remain strong); 2. Gujarat Gas; 3. Expert Speak (a. Automobile; b. Real Estate)

 

Today’s top research Idea

Cement: Margins in North and Central India remain strong

• Indian cement sector companies have underperformed the broader market in the past three months on concerns of margin erosion. All- India cement prices have corrected 3% QoQ in 2QFY20, largely led by price decline of 5% QoQ in the East and 6% QoQ in the South. However, the decline was only to the extent of 1-2% for other regions.
• Lower energy costs are expected to be a tailwind and partly cushion the adverse impact of the sequential drop in prices. Further, petcoke prices are also lower 18% YoY while imported coal prices are down 40% YoY.
• Therefore, we conclude that players in the North and Central India are significantly better positioned with a much lower drop in margins v/s players in the South and the East.
• We reiterate our preference for companies with higher exposure to the North and Central India. UltraTech remains our top pick followed by ACC and JK Cement.

Piping hot news

Mutual funds collection via SIP up 7.5 per cent to Rs 8,231 crore in August amid volatile markets

The mutual fund industry managed to garner Rs 8,231 crore through systematic investment plans (SIPs) in August, a rise of 7.5 per cent from the year-ago period, despite volatility in equity market. With this, total SIP contribution in the first five months of the current fiscal rose to Rs 41,098 crore as compared to Rs 36,760 crore in April-August 2018, as per the Association of Mutual Funds in India (AMFI).