Daily Brief Energy/Materials: Rajshree Polypack, Breedon Aggregates, Cleveland-Cliffs Inc , Adaro Energy, Siemens Energy AG and more

• RPPL reported a weak Q1FY24 due to correction in raw material prices that led to inventory losses and decline in EBITDA margin to 12% vs 14%+ QoQ and 16% YoY.
• Given that Q1 tends to be a high demand quarter, RPPL had kept high inventory, which further accentuated the inventory losses.
• The raw material prices have stabilized now. EBITDA per kg should stabilize back to around INR 34-35 and should help the EBITDA to grow in line with the volume growth. 

• In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
• I expect four changes for F100 and seven changes for F250 based on the latest available data.
• However, with five more trading days left for the base date and with many names lurking close to the border, the rankings can still change.

• Cleveland-Cliffs is becoming too aggressive in its consolidation goals, says author.
• Cliffs continues to underperform its peers, I outline some important red flags associated with the company’s acquisition spree. I remain sceptical that a deal for U.S.
• Steel would be beneficial for shareholders.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adaro Energy

• Short call with Head of IR of Siemens Energy provides more confidence in the equity story, but not much will happen until Q4
• New processes are being put in place: an external partner (external validation and support by renowned company), a dedicated task force, and Ernst & Young (as the main auditor).
• Looking at the other divisions, momentum for Gas Services, Grid Technologies, and Transformation of Industries remain strong