EUR 120.00 For Business Accounts Only

MOSL: Morning India (18/November/19): 1. Britannia Industries; 2. ONGC; 3. Page Industries; 4. Future Retail; 5. Mphasis; 6. SAIL; 7. Endurance Tech; 8. Glenmark Pharma

MOrning India (18/November/19): 1. Britannia Industries; 2. ONGC; 3. Page Industries; 4. Future Retail; 5. Mphasis; 6. SAIL; 7. Endurance Tech; 8. Glenmark Pharma

 

Today’s top research Idea

Britannia: Largely in-line; weak near-term outlook, expensive valuations prompt rating downgrade

• BRIT's performance was largely in line with low expectations with volumes slightly below but margins at their highest level ever. The company is performing well in terms of gaining market share in the biscuits category and diversifying its portfolio.
• However, earnings growth is likely to be muted (PBT CAGR of 8.8% over FY19-21), as high-velocity categories like biscuits (over 75% of BRIT sales) take time to recover amidst a weak demand environment.
• The stock has delivered nearly 11.1x returns (45% CAGR) since our upgrade to Buy in May'13 and is up by 30% over the past three months.
• While the massive opportunity in the Indian food space and BRIT's efforts on distribution expansion/product development provide comfort on the longer-term prospects, we believe that near-term valuations at 49x FY21E EPS leave limited room for an upside (TP: 3,458, 50x Sep'21 EPS). Against this backdrop, we downgrade our rating to Neutral.

Piping hot news

Bharti Airtel withdraws bid for RCom assets citing questionable, unfair conduct

Telecom operator Bharti Airtel has withdrawn its bid to purchase assets of Reliance Communications (RCom) after terming the move of committee of creditors to extend the bid submission deadline on the request of Reliance Jio as "extremely unfair" and "biased". Without naming Reliance Jio, Bharti Airtel Director (Finance) Harjeet Kohli in a letter to resolution professional Anish Niranjan Nanavaty said his company's request to extend the deadline was turned down by the committee of creditors (CoC) of RCom but surprisingly, the dates have been extended to accommodate submission by a bidder.