MOSL: Morning India (4/December/17): 1. NMDC; 2. Infosys; 3. Biocon; 4. Utilities; 5. Automobiles (Vol. nos);

​MOrning India (4/December/17): 1. NMDC; 2. Infosys; 3. Biocon; 4. Utilities; 5. Automobiles (Vol. nos);

Today’s top research idea

• NMDC: Iron ore pricing improving; Highly profitable steel project, albeit delayed, is available for free
  
• NMDC has increased iron ore prices by 10-13% as Indian iron ore mines are regaining price power. We expect NMDC's iron ore volumes to grow at 5-6% over the next 4-5 years from its existing mines that are currently operating at ~80% utilization.
  
• Investment in rail evacuation line and growth at its key customers will drive volume growth. Steel plant, though delayed, will be highly profitable given technology efficiency, scale advantage and raw material sourcing. Margins in the steel business are likely to be 10,000/t.
  
• Despite factoring in 10% lower iron ore margins w.r.t. FY18, we expect EBITDA CAGR of 17% to INR97b over FY17-22. We expect equity value CAGR of 15% to INR223 in four years, while the dividend yield will be ~5% at CMP. Thus, we expect a 20% annual total stock return over the next 3-4 years.
  

Piping hot news

Reviving growth tops Infosys boss Salil Parekh’s agenda

• Infosys will seek to revive growth and create a fresh team of leaders when chief executive Salil Parekh takes charge in January at the Bengaluru company, which has battled nearly a year of internal turmoil and slashed revenue forecast for the fiscal year…