Motilal Oswal - MOSL: MOrning India (9/September/19): 1. Coal India (A case of misplaced valuations); 2. Dabur ; 3. Technology; 4. Tech Mahindra

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Motilal Oswal

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MOSL: MOrning India (9/September/19): 1. Coal India (A case of misplaced valuations); 2. Dabur ; 3. Technology; 4. Tech Mahindra

MOrning India (9/September/19): 1. Coal India (A case of misplaced valuations); 2. Dabur ; 3. Technology; 4. Tech Mahindra

Today’s top research idea

Coal India: A case of misplaced valuations; Attractively valued at ~3x EV/EBITDA

Despite a 48% YoY increase in adj. EBITDA in FY19, COAL's stock price is down ~30% since end-Mar'18, with valuations at ~50% discount to its long-term average. This decline has coincided with a fall in valuations of coal mining companies globally.
Given the non-cyclical nature of COAL and a growing domestic demand it is perplexing to see the sharp de-rating in the stock. In our view, from India's standpoint, coal is here to stay, despite increasing renewable generation. At ~3x FY20E EV/adj. EBITDA and ~8x P/E, the stock is attractively valued.
We value COAL at 4.5x FY20 EV/adj. EBITDA and reiterate Buy with a target price of INR264/sh.

Piping hot news

Duracell set to acquire Eveready’s battery and flashlight business

Duracell Inc, owned by Warren Buffett’s Berkshire Hathaway, has pipped rival Energizer Holdings and is set to acquire BM Khaitan’s flagship Eveready Industries’ battery and flashlight business in a slump sale for Rs 1,600-1,700 crore, said multiple sources aware of the matter. The deal includes manufacturing plants, distribution network and the Eveready brand.

09/09/2019 1 EN

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MOSL: MOrning India (9/September/19): 1. Coal India (A case of misplaced valuations); 2. Dabur ; 3. Technology; 4. Tech Mahindra

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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