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MOSL: Morning India (22/May/18): 1. UltraTech Cement; 2. Bajaj Auto; 3. Petronet LNG; 4. Colgate-Palmolive; 5. Dalmia Bharat; 6. Thermax; 7. Guj.St.Petronet; 8. Mahanagar Gas

MOrning India (22/May/18): 1. UltraTech Cement; 2. Bajaj Auto; 3. Petronet LNG; 4. Colgate-Palmolive; 5. Dalmia Bharat; 6. Thermax; 7. Guj.St.Petronet; 8. Mahanagar Gas; 9. Sanghi Inds; 10. Metals Weekly

 

Today’s top research idea

Ultratech Cement: Ultratech to acquire Century Textiles’ cement assets

• Ultratech’s (UTCEM’s) board has approved the acquisition of cement division of Century textiles Industries Limited (CTIL) which has total grinding capacity of 13.4mt with 11.4mt of integrated capacity and grinding unit of 2mt.
• We believe the acquisition of CTIL’s integrated cement capacity of 13.4mt at USD106/t is positive for UTCEM as it will help in increasing UTCEM’s domestic capacity to 106mt and capacity market share by ~3pp to 23% by FY19 end. The acquisition cost is ~7-8% lower than the cost of JPA’s acquired assets about 2 years back. Additionally, the acquisition is earnings accretive from 1st year of operations vs 2 years in case of JPA.
• UTCEM by way of this acquisition has ensured higher market share with zero lead time for asset creation and at valuation largely in line with greenfield expansions which we believe is positive for UTCEM.

Piping hot news

Rupee falls 12 paise to close at fresh 16-month low

• The rupee lost another 12 paise to close at fresh 16-month low of 68.12 against the US currency on sustained dollar demand from importers and corporates amid weak global cues. Heavy capital outflows and growing uncertainties over an impending rate hike by the US Federal Reserve kept forex sentiment volatile, a currency dealer said.