EUR 120.00 For Business Accounts Only

MOSL: Morning India (4/February/20): 1. Power Grid Corp (In line on strong transmission segment growth); 2. GSK Pharma; 3. Shriram Transport Fin.; 4. SRF; 5. Tata Chemicals; 6. Coromandel Intl

Morning India (4/February/20):

Today’s top research idea
Power Grid Corp: In line on strong transmission segment growth
** Power Grid's result highlights strong performance in the transmission segment, with adj. PAT increasing 13% YoY. A declining order book and capitalization schedule, could impact the pace of growth in profitability.

** However, the subsequent lower capex (along with removal of DDT) also implies potential of higher dividends (FY22E div. yield of ~7%).

** Valuations at 1.3x FY22E P/BV remains attractive for a company with steady RoEs of ~17% and does not capture any growth potential (EPS FY19-22E: 8% CAGR). Maintain Buy with a DCF based TP of INR229/sh.

Piping hot news
Oil extends losses below $50 as virus concerns grip market
Oil extended its sharp decline below $50 a barrel as traders weigh the impact on global demand from the spread of coronavirus, which has probably cut China’s oil consumption by 20%. Futures in New York were down 0.7%, after plunging 2.8% Monday in a continuation of oil’s worst start to a year since 1991. Oil demand in the world’s biggest importer dropped by around 3 million barrels a day, according to people with inside knowledge of China’s energy industry.