MOSL: Morning India (22/April/20): 1. ACC (Volumes decline 13% YoY due to COVID-19 shutdown); 2. Aurobindo Pharma; 3. Federal Bank; 4. Hotels; 5. Expert Speak (Consumer)
MOrning India (22/April/20):
Today’s top research idea
ACC: Volumes decline 13% YoY due to COVID-19 shutdown
** ACC's 1QCY20 results reflect the adverse impact of COVID-19. While volumes declined 13% YoY, EBITDA still grew 10% YoY on lower costs.
** We have cut our CY20 volume estimate by a further 8% (to 23.1mt, down 20% YoY) due to the COVID-19 impact but have kept CY21 estimates (volume assumed same as CY19) unchanged
** ACC trades at 6.3x CY21 EV/EBITDA which is a 35-55% discount to peers such as Shree Cement, UltraTech and Ramco. We believe that such a large valuation discount is excessive as (a) ACC has arrested its market share losses since CY17 and should continue to grow in line with the market for at least next five years, (b) its net cash balance sheet (22% of market cap) places it well to withstand any extended disruption from COVID-19, and (c) with its planned capacity expansions in CY22, the proportion of inefficient assets would decline and improve profitability.
Piping hot news
Facebook to invest ₹43,574 crore in Jio platforms
Reliance Industries Limited, Jio Platforms Limited and Facebook, Inc. today announced the signing of binding agreements for an investment of ₹ 43,574 crore by Facebook into Jio Platforms. This investment by Facebook values Jio Platforms at ₹ 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of ₹ 70 to a US Dollar). Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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