MOSL: Morning India (28/November/17)-1. Oil & Gas (Thematic) – Expanding horizons-2. Motherson Sumi-3. Whirlpool- 4. Metals Weekly

​MOrning India (28/November/17): 1. Oil & Gas (Thematic) – Expanding horizons; 2. Motherson Sumi; 3. Whirlpool; 4. Metals Weekly

Today’s top research theme

Oil & Gas (Thematic) - Expanding horizons; Green corridors, BS-VI, and new cities to drive growth

• The first wave of volume growth came in when the government granted top priority to city gas distribution companies (CGDs) for allocation of cheaper domestic gas in 2014. The second wave came with increased emphasis on cutting vehicular pollution through restrictions on diesel vehicles and plying of vehicles with odd/even registration plates on alternate days.
  
• We believe that green corridors, intercity travel, inorganic growth through new areas, and residential usage would drive growth of CGDs, going forward. With the implementation of BS-VI emission norms, economics would be even more against diesel usage and would aid volume growth for IGL, MAHGL and GUJGA.
  
• Global peers trade at 10.5x FY19E EV/EBITDA and 17.3x FY19E P/E, while Indian CGDs trade at 13.5x FY19E EV/EBITDA and 24.4x FY19E P/E. Indian CGDs remain in a sweet spot considering increased emphasis on usage of gas, firm supply of cheaper domestic gas, and penetration of gas in newer geographies driving usage of CNG for intercity travel.
  

Piping hot news

Trai to issue suggestions on net neutrality today

• After over one year of consultations and heated debate, the Telecom Regulatory Authority of India (Trai) will issue its much-awaited recommendations on net neutrality. “We will issue the recommendations on net neutrality tomorrow,” Trai chairman R.S. Sharma told reporters on Monday. Net neutrality requires telecom service providers to treat all internet traffic equally, without regard for the type, origin, or destination of the content or the means of its transmission.