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MOSL: Morning India (5/September/18): 1. United Breweries- 2. Crompton Gr. Consumer-3. Muthoot Finance-4. MAS Financial Services-5. Bulls & Bears (Sep-18)- 6. Telecom

MOrning India (5/September/18): 1. United Breweries (Growing profitably and ahead of market); 2. Crompton Gr. Consumer; 3. Muthoot Finance; 4. MAS Financial Services; 5. Bulls & Bears (Sep-18); 6. Telecom

 

Today’s top research idea

United Breweries: Growing profitably and ahead of market; Key takeaways from UBBL's annual report and management meet

• The beer industry is likely to deliver volumes CAGR of 7.6% over FY18-24. UBBL expects to outperform industry.
• UBBL's premium segment grew rapidly in FY18-Heineken up 30%, Kingfisher Ultra up 59% and Kingfisher Ultra Max up 80% YoY.
• Selling & distribution costs are coming down, with Carlsberg focusing more on profitability. Promotions are being kept on backburner.
• Working capital and fixed asset turns improved in FY18. EBITDA, net margins, RoE and RoCEs were at all-time high levels. Net debt halved from INR5.7b in FY17 to INR2.8b at end-FY18. Maintain Buy with a TP of INR1,730.

Piping hot news

Government rules out excise duty cut as fuel rates hit new high

• The government will not cut excise duty on petrol and diesel to cushion spiralling prices, which touched fresh highs Tuesday, as it has limited fiscal space available to take any dent in revenue collections, a top official said. With imports becoming costlier because of a free-fall in rupee against the US dollar, the government believes the current account deficit will overshoot the target and it cannot “disturb fiscal maths by cutting excise duty on petrol and diesel,” the official, who wished not to be identified, said.