EUR 120.00 For Business Accounts Only

MOSL: Morning India (1/September/21): 1. Telecom (Changing market construct); 2. PI Industries - AR; 3. EcoScope (a. GDP; b. Fiscal Deficit); 4. Financials (a. Credit growth stood at 6.5% YoY as on 13th Aug’21;

MOrning India (1/September/21): 1. Telecom (Changing market construct); 2. PI Industries - AR; 3. EcoScope (a. GDP; b. Fiscal Deficit); 4. Financials (a. Credit growth stood at 6.5% YoY as on 13th Aug’21; b. Digital Payments Tracker)

 

Today’s top research idea

Telecom: Changing market construct; Bharti, RJio to see exponential benefit

• Changing market construct: Bharti, RJio to see exponential benefit.
• Amid the concerns over VIL's survival, RJio and BHARTI could gain disproportionately. VIL has a significant market share (255.4m subscribers), which provides the two telecom giants the opportunity to capture a large pool of subscribers . This could potentially offer incremental revenue/EBITDA of INR177b/INR89b (16%/18% growth) for Bharti and INR177b/INR89b (23%/23% growth) for RJio for FY22.
• Vodafone Idea's moment of truth: With series of upcoming debt repayment over the next 6-9 months, exhausting cash balances and no timelines for the announced fundraise, it could prove to be challenging to manage operations. VIL has near-term repayment of INR64b over Dec'21-March'22 and additional deferred spectrum/AGR liability payment of INR157b/66b due in March'22/April'22.
• Valuation:
• Bharti: We see a potential re-rating upside in both the India and Africa businesses, on the back of steady earnings growth and attractive valuations. Our estimates do not factor in any upside from tariff hikes or sharp market share gains - potentially due to VIL's eventual outcome of financial stress, which could provide an incremental upside of INR175/share at current valuations.

Piping hot news

India's GDP surges 20.1% in June quarter of FY22 on low base

In the first quarter of FY22, India's economy saw a growth of 20.1 per cent, totalling up to 32.38 lakh crore. However, this number must not be confused with a strong recovery because of a low base effect. The pandemic caused economic activity to take a hit, last year. Growth was forecast at 21.4 per cent for this quarter by the RBI. The country's real gross value added rose by 18.8 per cent in the first quarter. Construction grew by 68.3 per cent, thereby being a major contributor to the number. Agriculture grew by 4.5 per cent, and manufacturing also rose by 49.6 per cent. However the trade, hotels, transport and communication services grew at 34.3 per cent.