The company, enjoys a near-monopoly in the Indian market and the valuation of the offer at 3.4X post-issue book (1.5X book with fair value change) is in line with global peers and looks reasonable in the context of a steady track record and macro opportunities.
For long term investors looking to play the lucrative theme of financial intermediation, MAS offers steady growth with high quality.
The farm to fork company has stakes in promising segments which we believe are well-positioned to create value in the long term.
While a part of the weakness in results is transitory in nature, higher costs owing to employee benefits could be a new normal in R&D intensive industry.
We have a neutral stance on the company on the back of its underinvestment in the domestic market and tepid capacity expansion
We like the Nestle’s transformational story post the food safety crisis with respect to its key product in India – Maggi. Since then Nestle’s share in instant noodles space has crawled back to the range of 60 percent.
At 18.4x FY19 projected earnings, the company’s fundamentals definitely warrant attention for accumulation.
In its post listing history, FY17 was possibly the worst year for Coal India as the stock got hammered with investors worrying excessively about poor demand, lower coal prices, grade slippages and the huge impact of wage revision.