EUR 120.00 For Business Accounts Only

MOSL: Morning India (18/February/19)-1. ONGC (Gas production to grow ~5-6%); 2. Dr Reddy’s Labs (Progressing well to resolve Warning Letter); 3. GSK Consumer; 4. Ashok Leyland; 5. Voltas; 6. Glenmark Pharma; 7.

MOrning India (18/February/19): 1. ONGC (Gas production to grow ~5-6%); 2. Dr Reddy’s Labs (Progressing well to resolve Warning Letter); 3. GSK Consumer; 4. Ashok Leyland; 5. Voltas; 6. Glenmark Pharma; 7. Sadbhav Engg; 8. Tech Mahindra

 

Today’s top research idea

ONGC: Gas production to grow ~5-6%; Oil likely to remain flat

• ONGC reported decline of 9% YoY in crude oil sales to 5.4mmt and 6% increase in its gas production to 5.3bcm. Revenues came in marginally higher than our estimate. However, lower than expected operating cost resulted in EBITDA of INR166b (+32% YoY, +5% QoQ), higher than our estimate. Despite higher EBITDA, much higher than estimated depreciation/write-offs resulted in in-line PAT of INR82.6b, +65% YoY. The guidance for FY19 has been revised downwards by the company.
• On a conservative note, we cut our production estimate for FY20 and FY21 as well resulting in ~10% cut in EPS. We value the standalone segment at 8x Dec'20 EPS (excluding other income and add investments to arrive at a target of INR182. Reiterate Buy.

Piping hot news

Anil Ambani reaches standstill agreement with lenders

• Anil Ambani led Reliance Group has reached an in-principle standstill understanding with more than 90% of the lenders at the promoter group level, after L&T Finance and Edelweiss Group had dumped Anil Ambani Group shares causing the unprecedented fall in share prices of Reliance Power and other group shares early this month.