EUR 120.00 For Business Accounts Only

MOSL: Morning India (22/October/19): 1. Ultratech Cement (Revival of CTIL’s plants to remain key); 2. Infosys; 3. Shree Cement; 4. Bharti Infratel; 5. Piramal Enterprises; 6. LIC Housing Fin; 7. AU Small Financ

MOrning India (22/October/19): 1. Ultratech Cement (Revival of CTIL’s plants to remain key); 2. Infosys; 3. Shree Cement; 4. Bharti Infratel; 5. Piramal Enterprises; 6. LIC Housing Fin; 7. AU Small Finance; 8. Oberoi Realty

 

Today’s top research idea

Ultratech Cement: Revival of CTIL’s plants to remain key

• UTCEM's EBITDA excluding Century Cement's assets came in line with our estimates at INR19.2b (v/s est. of INR20b).
• Century's cement assets operated at 48% utilization in 2QFY20 and generated nil EBITDA (INR60/t incl. other income). Utilization for 2QFY19 stood at 64% with EBITDA/t of INR500/t. The reduction in utilization was due to maintenance shutdown taken for the plants in 2QFY20.
• The company targets to operate CTIL at 60-65% utilization with expected EBITDA margin of INR500/t.
• The board has approved 3.4mt capacity expansion in the East through two brownfield expansion (Patliputra in Bihar and Dankuni in West Bengal) and one greenfield grinding unit in Odisha.
• We forecast EBITDA to report 30% CAGR and EPS to show 42% CAGR in FY19-21E, driven by 14% CAGR in volume and better margins. The company trades at 13.8x/12x EV on FY20/FY21 EBITDA. We value UTCEM at 14x FY21 EV/EBITDA and arrive at a Target Price of INR4,950 (implied EV/t of USD180/t on FY21 capacity). Maintain Buy.

Piping hot news

NDA set to make a clean sweep in Maharashtra, BJP in Haryana

The Bharatiya Janata Party (BJP) could be on course to making history as most exit polls on Monday predicted that the party will comfortably return to power in Haryana, while the ruling National Democratic Alliance (NDA) led by the BJP is headed for a landslide victory in Maharashtra. The outcome of the assembly elections in the two states is crucial for Prime Minister Narendra Modi because both chief ministers, Maharashtra’s Devendra Fadnavis and Manohar Lal Khattar of Haryana, were handpicked by him after the BJP won the elections in 2014.