MOSL: Morning India (23/April/19)-1. Marico (Another month of benign RM price environment); 2. AU Small Finance (Strong operating performance); 3. Ipca Laboratories; 4. KPIT Technologies (KPIT list its Engineer
MOrning India (23/April/19): 1. Marico (Another month of benign RM price environment); 2. AU Small Finance (Strong operating performance); 3. Ipca Laboratories; 4. KPIT Technologies (KPIT list its Engineering Business); 5. Aviation
Today’s top research idea
Marico: Another month of benign RM price environment; Copra prices ease further, other commodity prices benign too
- As mentioned in our 4QFY19 update for MRCO, input cost pressure is easing, especially for copra, which accounts for 40-50% of the company's RM cost. Based on the latest data, copra Calicut price was down 7.7% MoM in Mar'19. Costs of other key commodities - except LLP (+4.5% MoM) - also remain benign (Cochin coconut oil price down 6.6% MoM and HDPE price down 0.6% MoM).
- Notably, copra prices have been on a downtrend for the second consecutive month now. Management had highlighted in its last quarter concall that it expects copra costs to ease by 15-20% YoY in FY20 beginning Mar'19.
- Maintain Buy with a target price of INR460, targeting 43x Mar'21E EPS (in-line with its three-year average), implying a 26% upside.
Piping hot news
Trump puts India in a fix over Iran oil and regional strategy
- The Trump administration has put India in a tight energy fix and strategic tangle, ending the waiver that allowed New Delhi to buy Iranian oil even as it whittled down supplies from Teheran, a long-term source and partner in the region. "The current waivers expire on May 2. There are no SRE (Significant Reduction Exemption) waivers that extent beyond May 2. Full stop," US secretary of state Mike Pompeo announced at a state department briefing on Monday, signaling an end to a nearly year-long breathing room the Trump administration had given to eight countries, including India and China, after putting them on notice to stop buying Iranian oil.
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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