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MOSL: Morning India (27/September/21): 1. Aditya Birla Fashion and Retail – Annual Report Update (A year of firefighting); 2. United Breweries (CCI penalty a significant sentiment dampener); 3. Oil & Gas – CGDs

Morning India (27/September/21): Morning India (27/September/21): 
Today’s top research ideaAditya Birla Fashion and Retail – Annual Report Update: A year of firefighting- The year FY21, which proved to be a tumultuous year for the Apparel business, impacted ABFRL even more adversely. High leverage and squeezed working capital led to a strain on liquidity which was responded well through equity infusion and unwinding of working capital.- Equity capital infusion of INR25b in FY21 pulled down net debt to INR5.3b in FY21 v/s INR20.9b in FY20. Operating cash flow at INR11b was supported by INR6.1b unwind of inventory. Capex remained low given the prevalent lockdowns/restrictions in 1HFY21, leading to FCF of INR8.9b.- Revenues/EBITDA declined 40%/54% to INR52.5b/INR5.5b (pre-Ind-AS 116 EBITDA loss of INR4b). Company’s prompt cost management led to overall decline in operating cost, thereby minimizing the impact on bottom line.- Rejig in product categories to adjust to the changing consumer demands, coupled with steady store addition across formats (Lifestyle/Pantaloons target to add 250/60 stores each annually) is expected to drive healthy growth. - With leverage reaching comfortable levels and return ratios / cash flows expected to improve, we believe the stock yet does not fully capture the growth potential even after factoring in the losses in Ethnic Wear for couple of years. Maintain Buy.
Piping hot newsEV demand for commercial use likely to increase by 15 times 6 monthsDemand for electric vehicles for commercial use is estimated to increase 15 times in the next six months, driven by the rise in fuel prices, incentives rolled out by the central and state governments and renewed emphasis by ecommerce companies to electrify their last-mile delivery fleets, said a financier of such vehicles.