TOP CORPORATE NEWS:- 11 Dec 2017

top corporate news
TOP Headlines Of The Day:- 11 Dec 2017

Colgate Palmolive announces second interim dividend of Rs4 per equity share
Tata Motors announces price hike across passenger vehicles range, starting January 2018
USFDA completes inspection at Granules India’s Virginia facility
Bharti Airtel bullish on long-term prospects of Africa business
MGL plans to add 20 new stations in FY18 on track

Colgate Palmolive announces second interim dividend of Rs4 per equity share
Colgate Palmolive (India) (CPIL) has declared a second interim dividend of Rs4 per equity share for the financial year ending March 31, 2018. This dividend will be paid on the paid-up equity share capital of Rs27.20cr involving a total payout of Rs131cr (including dividend distribution tax).
The dividend will be paid on December 29, 2017, to those shareholders whose names appear on the Register of Members of the Company on December 19, 2017.
CPIL is the market leader, the pioneer in bringing innovative and differentiated product offerings in the Indian market. With a growth in Indian oral care sector, it has invited competition from both, MNCs and Indian players and has so far evaded the same by insistent spend towards A&P. However, the aggressive competition from Patanjali and Dabur in the naturals segment is proving to be a growth obstacle for CPIL.

Tata Motors announces price hike across passenger vehicles range, starting January 2018
Tata Motors (TML) announced that the company would be increasing prices of its entire passenger vehicles range by up to Rs25, 000, starting January 2018, as per the BSE filing. The increase in price is primarily on account of rising input costs. The company remains optimistic on maintaining its growth trajectory in the coming year on the back of its robust product portfolio like TIAGO, HEXA, TIGOR and the recently launched NEXON.

NEXON, the recently launched lifestyle compact SUV, will also witness the discontinuation of the introductory price by 31st December and its entire
a range will also witness a price hike from January 2018 by up to Rs25,000.

USFDA completes inspection at Granules India’s Virginia facility
Granules India’s wholly-owned foreign subsidiary – Granules Pharmaceuticals, Inc. facility located in Chantilly, Virginia, USA has completed its first audit from December 4, 2017, to December 8, 2017, by the US Food and Drug Administration (USFDA) with one observation. Granules Pharmaceuticals, Inc. will respond to this observation within the stipulated time period. We believe the stock to react positively to this news, due to only one observation made by USFDA. The company can easily cope up with this observation and improve its sales by upcoming product approvals & launches.
We expect the ramp-up in formulations business would likely improve its margins. The Omnichem JV ramp up would also reflect in net margin improvement from FY20E onwards. We expect ~190bps EBITDA margin expansion over FY17-20E.

Bharti Airtel bullish on long-term prospects of Africa business
In 2010, Bharti Airtel entered into African telecom market by acquiring Zain’s Africa operations for an Enterprise value of US$10.7 bn. The company is currently present in 15 African markets. It is optimistic about long-term growth in Africa given low teledensity, favorable demographics, and wide spectrum.

Following are the key takeaways from the meeting:
• Bharti has strengthened its distribution and increased network in order to grow in the African market. It also offered bundled plans to subscribers leading to increasing in ARPU and curtailed costs (subscriber acquisition costs, energy cost, etc). Consequently, ARPU has recovered and data traffic is growing at 80-90% yoy (currently 700MB per subscriber per month).
• As per the company, at least 40% EBITDA margin is the benchmark for delivering a positive bottom-line in most markets. However, the number of markets with more than 40% EBITDA margin has increased to 5 in Q2FY18 (none in 2016). Also, the markets with less than 20% EBITDA margin have reduced from 8 in 2016 to 4 in Q2FY18. Bharti is still struggling in Tanzania and Kenya where EBITDA is <20%. In order to grow in Kenya and
Tanzania, Bharti has rolled out 4G and 3G (in 900MHz frequency band) respectively in these areas. The Rwanda market is loss-making at the operating level.
• In Uganda market – revenue market share (RMS) gap between Bharti and the leader- MTN has narrowed down from 48.7% in 2010 to just 9% currently. Both the companies together control ~94% of RMS of the Uganda market.
• In Nigeria, players including Bharti and GIo are in the race to acquire Etisalat’s operations, which may lead to consolidation and reduced competition.
• The company plans a capex of ~US$700m for Africa in FY18. It is also considering tower sale in some of its markets where it still owns towers.

MGL plans to add 20 new stations in FY18 on track
The management of Mahanagar Gas Ltd (MGL) confirmed that the company is well on track to 20 stations by FY18, in an interview to the press. The management also expects that by the end of December 2017, 11-12 new stations would be added to the existing network of 206 CNG stations.
PNG connections have historically grown at a CAGR of 6-7% and a similar growth rate is expected for FY18. As of September 2017, MGL had piped gas connections to ~9.85 lakh households, which by management estimates amounts to a penetration of ~30%.

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