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MOSL: Morning India (29/March/19): 1. ONGC (Takeaways from OPaL’s Dahej Plant Visit); 2. Infosys (Infosys partners with ABN AMRO); 3. Automobiles (High inventory, production cuts to impact March sales); 4. Tech

MOrning India (29/March/19): 1. ONGC (Takeaways from OPaL’s Dahej Plant Visit); 2. Infosys (Infosys partners with ABN AMRO); 3. Automobiles (High inventory, production cuts to impact March sales); 4. Technology

 

Today’s top research Idea

ONGC: Takeaways from OPaL’s Dahej Plant Visit

• We recently visited OPaL - a 1.9mmtpa petrochemical plant of ONGC at Dahej. The plant appears to have stabilized now, with current capacity utilization at ~90%. It is expected to bring forth a series of cost-optimization and process-improvement projects in addition to debt restructuring, which would improve its profitability.
• We marginally revise our estimates for ONGC to take into account the changes in the exchange rate and production assumptions.
• The stock trades at 5.3x FY21E consol. EPS of INR29.6. Valuing the company at 8x standalone adj. EPS and adding the value of investments, we reiterate our Buy rating with a target price of INR196.

Piping hot news

Five PSU lenders get capital infusion of Rs21,428 crore from government

• Five state-owned banks, including PNB, Bank of Baroda and Union Bank, Thursday received shareholders' approval for capital infusion to the tune of Rs 21,428 crore in lieu of preferential allotment of shares to the government. This capital infusion is for the current fiscal ending March 31, 2019. Punjab National Bank (PNB) in a regulatory filing said that an extraordinary general meeting of shareholders was held on March 28 for obtaining shareholders' approval to issue and allot 80,20,63,535 equity shares at a premium of Rs 71.66 per share amounting up to Rs 5,908 crore on preferential basis to the government.