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MOSL: Morning India (29/January/18): 1. Maruti Suzuki; 2. Avenue Supermarts; 3. Pidilite Inds; 4. Dr Reddy's Labs; 5. Biocon; 6. Container Corpn; 7. Shriram Transport Fin; 8. Divi's Lab; 9. LIC Housing Fin; 10.

MOrning India (29/January/18): 1. Maruti Suzuki; 2. Avenue Supermarts; 3. Pidilite Inds; 4. Dr Reddy's Labs; 5. Biocon; 6. Container Corpn; 7. Shriram Transport Fin; 8. Divi's Lab; 9. LIC Housing Fin; 10. Jindal Steel and Power; 11. L&T Infotech; 12. Mphasis; 13. Ajanta Pharma; 14. Shriram City Union; 15. Persistent System; 16. Music Broadcast

Today’s top research idea

MARUTI SUZUKI: Operating performance in-line; lower other income dents PAT

• Net sales grew 14.2% YoY to INR192.8b (in-line), driven by 11.3% growth in volumes and a 2.6% increase in realizations to INR447k (est. of INR446.8k).
• EBITDA margin of 15.8% (est. of 15.4%) expanded 110bp YoY (-110bp QoQ), as cost-reduction initiatives partially offset commodity cost inflation. Commodity price inflation impact was ~30bp in 3QFY18, and more impact is expected in 4QFY18.
• Lower other income and a higher tax rate restricted PAT growth to 3% YoY to ~INR17.9b (est. of INR20.3b).
• Growth from the rural markets remains healthy at 19%, outperforming urban demand growth in 9MFY18.
• Gujarat plant is fully ramped-up now, with ~20k/month production. Localization level at Gujarat plant would be at least 60-70% in 3-4 years (v/s 15% currently).
• Royalty rates revised downward for all new models (including new Dzire & Swift), starting from Ignis (Jan-17 onward). Benefit to reflect once Suzuki Motor’s board approves it.

Piping hot news

Reliance Jio to raise up to $2.2 billion debt to fund RCom deal

• Reliance Jio Infocomm Ltd will raise as much as $2.2 billion in foreign currency debt to fund the purchase of Reliance Communications Ltd (RCom)’s wireless assets, according to two people directly aware of the company’s discussions with lenders. While Reliance Jio hasn’t disclosed the value of the transaction to purchase RCom’s assets, the people cited above said that the deal would be funded through a mix of debt and internal accruals.