EUR 120.00 For Business Accounts Only

MOSL: Morning India (24/January/19): 1. ITC; 2. Pidilite Industries; 3. Bharti Infratel; 4. United Spirits; 5. Maruti Suzuki; 6. Tata Motors; 7. Interglobe Aviation; 8. UPL; 9. Oberoi Realty; 10. DB Corp

MOrning India (24/January/19): 1. ITC; 2. Pidilite Industries; 3. Bharti Infratel; 4. United Spirits; 5. Maruti Suzuki; 6. Tata Motors; 7. Interglobe Aviation; 8. UPL; 9. Oberoi Realty; 10. DB Corp

 

Today’s top research idea

ITC: Cigarette volumes strong off a low base; rate hike decisions hold key

• ITC’s net revenue grew 14.9% YoY to INR112.3b (our estimate: INR106.5b), EBITDA increased 11.2% YoY to INR43.3b (our estimate: INR42.4b) and adj. PAT grew 14.4% YoY to INR32b (our estimate: INR30b).
• Cigarette volumes are likely to have grown at ~7% YoY. Cigarette net sales grew 9.6% YoY. EBIT margin contracted by 50bp YoY, led by higher input cost and higher salience of capsule cigarettes in the sales mix. Consequently, segmental EBIT growth of 8.8% YoY lagged sales growth during the quarter.
• Even after a year and half since the last GST hike, Cigarette EBIT growth does not seem to gain traction. We expect moderate 11.9% earnings CAGR over FY18-21. Due to the uncertain outlook around Cigarettes (which accounts for 86% of EBIT), we maintain our Neutral rating with a target price of INR300.

Piping hot news

Voda Idea okays Rs 25000-cr rights issue

Vodafone Idea Ltd (VIL), India’s biggest phone company by subscribers, has finalised a rights issue to raise Rs 25,000 crore to help bolster countrywide 4G coverage and take on Bharti Airtel and Reliance Jio Infocomm. “The Vodafone Idea board has approved the offer and issue of fully paid up and/or partly paid up equity shares of the company and/or other securities convertible into equity shares, including but not limited to, compulsorily convertible debentures, for an amount aggregating Rs 25,000 crore by way of a rights issue,” the company told the exchanges on Wednesday.