The company’s South Africa business has started to perform good numbers followed by good survival of the company in home
country despite strong competition from Jio. The company’s losses have reduced considerably on a consolidated basis.
The company has reported stable performance with no distruption in its market share despite the strong competition from
Patanjali. Saffola which is the market leader in the edible oil segment with 69% market share, is expected to turn profitable in the
current financial year. The company is expected to continue this stable performance in the upcoming quarter.
Led by India, South Asia will continue to be the fastest growing economic area despite new trade tensions in Asia and Pacific region, Asian Development Bank (ADB) said in a new report today.
Growth in Asia and the Pacific’s developing economies for 2018 and 2019 will remain solid as it continues apace across the region, despite rising tensions between the US and its trading partners, said a supplement to the Asian Development Outlook (ADO).
“South Asia, meanwhile, continues to be the fastest growing sub-region, led by India, whose economy is on track to meet fiscal year 2018 projected growth of 7.3 percent and further accelerating to 7.6 percent in 2019, as measures taken to strengthen the banking system and tax reform boost investment,” it said.
The ADO published in April had said that India’s economic growth will rise to 7.3 percent this fiscal and further to 7.6 percent in the next financial year, retaining the fastest-growing Asian economy tag, on back of GST and banking reforms.
“Although rising trade tensions remain a concern for the region, protectionist trade measures implemented so far in 2018 have not significantly dented buoyant trade flows to and from developing Asia,” said ADB Chief Economist Yasuyuki Sawada.
“Prudent macroeconomic and fiscal policy-making will help economies across the region prepare to respond to external shocks, ensuring that growth in the region remains robust.
A US court’s jury in St Louis, Missouri, ordered Johnson & Johnson, on Thursday, to pay damages of up to USD 4.69 billion to 22 women who claimed that asbestos present in the company’s talcum powder was the reason for them developing ovarian cancer.
The pharmaceutical goods major will have to pay USD 550 million in compensatory damages and USD 4.14 billion in punitive damages to the women and their families. The women claimed that the company failed to warn them about the traces of the chemical and associated cancer risks in using Johnson’s Baby Powder. According to a report in The New York Times, Johnson & Johnson said that it is planning to appeal the verdict as it was ‘disappointed’ with the jury’s decision. A regulatory document states that the company is facing 9,000 other cases involving baby talcum powder. One of the women’s lawyers said that the verdict was reached following a nine-hour session and after deliberating over it for more than six weeks. Six of the 22 women are now deceased and one more was too ill to attend the trial; the courtroom was filled with the remaining plaintiffs and their families and friends. The lawyer confirmed that Johnson & Johnson had covered up the presence of asbestos in its products for more than 40 years. He added that it did not even make an effort to label the products with warning stickers. As per the report, the company released a statement saying it is confident that its products do not contain asbestos and hence does not contribute to ovarian cancer in any way. It added that the trial was ‘fundamentally unfair’ as the 22 women, with ‘few connections to Missouri,’ were represented as a single plaintiff. The case first came to light in 2013, when a resident of Sioux Falls, South Dakota, filed a case against Johnson & Johnson. Deane Berg had used the company’s baby talcum powder for more than 40 years and discovered she had developed ovarian cancer in 2006. Berg claimed that she turned down a settlement of USD 1.3 million from the company and instead wanted it to put warning stickers on their products. Her cancer is currently in remission after months of ‘brutal’ chemotherapy. The company has, since then, been sued by thousands of women and in August 2017, it was ordered by a Los Angeles jury to pay damages of USD 417 million to a hospital receptionist, who developed ovarian cancer after using Johnson’s Baby Powder for decades.
Yes Bank: Buy | Target – Rs 472 | Return – 39 percent
Volatility in asset quality is a cause of concern.
In the past five years, the bank has consistently delivered 1.5 percent+ return on assets and 18 percent+ return on equity. Liabilities have been managed well with CASA as well as retail deposits improving and its target of 40 percent by FY19 looks achievable.
It has ambitious target for NIM of 4 percent by FY20. Expansion of branches and employee addition will keep costs elevated.
Supported by strong earnings and the ability to raise capital at a good price, its book value accretion has been the strongest among peers with a five-year CAGR of +30 percent. We maintain a Buy on the stock with target price of Rs 472, an upside of 39 percent
UPL: Buy | Target – Rs 934 | Return – 51 percent
The favorable weather forecasts for key agricultural regions, constructive government policies, and possibility of price increase (given stock-to-use ratios of key grain commodities expected to fall in certain regions) should speak well.
Crop diversity and gaining traction in biological nutrition portfolio will further drive growth for UPL and help in mitigating risk. We recommend Buy for a target of Rs 934 valuing at 17.4x FY20E EPS representing an upside potential of 51 percent
Titan Company: Buy | Target – Rs 1,058 | Return – 20 percent
Under jewellery segment, ‘Tanishq’ is the most successful and leading brand for the company in India. Now the company is planning to enter into international markets in jewellery segment by the end of FY19.
Titan, with its improving operational efficiencies and expansion strategies in retail network, is moving up the value chain and capturing more market share.
The stock is valued at 52.0x on Bloomberg consensus FY20E EPS with Buy rating to arrive at target price of Rs 1,058 with an upside of 20 percent.
However, government regulations on gold purchases, competition from regional jewellery players, gold price volatility, revival in consumer spending & competition from e-commerce players will be the key risks to the earning of the company
Tata Motors: Buy | Target – Rs 405 | Return – 50 percent
Around GBP 13.5 billion has been lined up for investments for the next three years on technology, new launches and capacity expansion which works out to be around GBP 4.5 billion per annum out of which around 78 percent is expected to be spent on technology and product development.
The technology involved is called Modular Longitudinal Architecture (MLA) which is compatible with Internal Combustion Engine (ICE), Battery Electric Vehicle (BEV) and Plug-in Hybrid Electric Vehicle (PHEV) making it a flexible design. This is expected to bring about some operational benefits and will be fully implemented by FY25E.
The Bloomberg consensus target price for Tata Motors is Rs 405 which is valued at P/E 8.9x for FY20E EPS based on future growth prospects. However, slowdown in the UK and European markets for JLR can be viewed as the possible downside risks to the call
State Bank of India: Buy | Target – Rs 334 | Return – 29 percent
SBI with its focus on loan book growth, CASA share in deposits, sustained NIMs of 2.7 percent, reducing non-performing assets (NPAs) and fresh slippages augur well in the long term.
Merged SBI presents a case for a diversified balance sheet that mirrors the domestic economy available at bargain valuations from a long term investment perspective.
We value the stock at 1.2x FY20 BVPS with a Buy rating for a target price of Rs 334
Oil & Gas Natural Gas Corporation: Buy | Target – Rs 192 | Return – 22 percent
Synergies in ONGC’s business and likely consolidation in downstream business with merger of HPCL and MRPL will ensure uptick in growth for the company.
We have valued the stock at PE 8x of FY20E EPS and have arrived at a target price of Rs 192 which gives potential upside of 22 percent. However, subsidy sharing will be detrimental to ONGC’s performance