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MOSL: Morning India (21/February/18): 1. Motherson Sumi (ART); 2. Ambuja Cement; 3. Mahindra CIE; 4. Ecoscope; 5. Aviation Monthly

MOrning India (21/February/18): 1. Motherson Sumi (ART); 2. Ambuja Cement; 3. Mahindra CIE; 4. Ecoscope; 5. Aviation Monthly

Today’s top research idea
MOTHERSON SUMI FY17: Rising CWIP weighs on RoCE
Motherson Sumi Systems’ (MSS) FY17 annual report highlights an improvement in its operating cash flows to INR38b (FY16: INR21.9b). This was primarily on account of release of working capital of INR6.6b, led by the increase in trade payables by INR19.4b (FY16: INR3.3b) and the continued practice of discounting receivables of INR18.8b (FY16: INR18b).
FCF post interest remained negative at INR34.4b on account of high capex (INR27.8b) and acquisitions (INR41.1b). Consequently, debt increased to INR103b (FY16: INR60b).
However, D/E was maintained at 1x with dilution and internal accruals. The PKC acquisition led to an increase in intangibles to INR40.3b, 38% of networth (FY16: INR3.4b, 6% of networth).
Rising CWIP and cash weighed on RoCE, which stood at 23.5% v/s RoIC ex-CWIP at 32.9%.

Piping hot news
Coal India monopoly to end as decks cleared for mining by private players
The private sector will soon be able to mine coal and sell it to power plants, steel mills and other users, ending the decades-old monopoly of state-run Coal India (CIL) and its affiliates, marking a long-expected reform aimed at boosting investment and output.