EUR 120.00 For Business Accounts Only

MOSL: Morning India (24/June/21): 1. Tata Steel: Annual Report Update (Focus back on growth but with an eye on leverage); 2. NMDC; 3. Bharat Electronics

MOrning India (24/June/21):

Today’s top research idea

Tata Steel - Annual Report Update: Focus back on growth but with an eye on leverage

• Tata Steel (TATA)'s FY21 Annual Report highlights the ambition of the company to maintain leadership in volumes, cost, and sustainability. With improved cash flows, the focus is back on growing the India business, wherein it aims to double capacity to 35-40mt by 2030. However, it plans to tread cautiously on this path as debt repayment remains the focal point for the management.
• On Tata Steel Europe (TSE), the management palpably appears concerned about the tightening emission norms in Europe, rising carbon credit costs, and the resulting lower competitiveness against imports to Europe, which pose a key challenge in the longer term. While we expect deleveraging to continue on the back of higher prices, rising carbon costs and the burden of sustainability capex in TSE are key concerns, in our view. Thus, we assign a Neutral rating, with TP of INR1,210.

Piping hot news

FMCG companies log sales growth after Unlock 2.0

FMCG companies are witnessing an increase in sales after Unlock 2.0 with easing of curbs on trading and movement by state governments and local authorities due to falling number of COVID cases. States began lifting restriction in the first week of June. Companies are witnessing a tailwind in sales, particularly in their health & hygiene portfolio - both in urban and rural markets.  Moreover, some players also expect the current quarter to be a better one for the FMCG industry, helped by an increase in sales and convenience of business.