EUR 120.00 For Business Accounts Only

MOSL: Morning India (18/June/19): 1. Coal India (Targeting production of 1 billion ton by 2024/25); 2. Bharti Airtel (Announces Africa IPO price band); 3. Indian Hotels (Steadily walking the talk on ‘Aspiration

MOrning India (18/June/19): 1. Coal India (Targeting production of 1 billion ton by 2024/25); 2. Bharti Airtel (Announces Africa IPO price band); 3. Indian Hotels (Steadily walking the talk on ‘Aspiration 2022’)

 

Today’s top research idea

Coal India: Targeting production of 1 billion ton by 2024/25

• Demand outlook for domestic coal remains promising, given India's low per-capita power consumption and the potential to substitute ~130-150mt of imported coal.
• COAL targets to achieve 1bt of production by 2024-25 (v/s 0.6bt in FY19). Creation of rail infrastructure is also progressing well and should support coal evacuation. Despite the high base of FY19, natural employee attrition, along with continued growth in volumes, is likely to drive 5% EPS CAGR over FY19-21.
• The stock trades attractively at ~4x FY20E EV/adj. EBITDA (v/s historical average of 7x), P/E of 8-9x (v/s average of ~14x) and offers a dividend yield of ~8%. We value the stock on 5x FY20E EV/EBITDA at INR310/sh.

Piping hot news

Fitch lowers India's FY20 growth forecast for a 2nd time

• Fitch Monday cut India's growth forecast for the current fiscal for a second time in a row to 6.6 per cent as manufacturing and agriculture sectors showed signs of slowing down over the past year. The global rating agency had earlier in March lowered the growth estimate for 2019-20 to 6.8 per cent, from 7 per cent projected earlier, on weak momentum of the economy…