In today’s briefing:
- Hindware Home Innovation Ltd: Will Restructuring Change the Company’s Fortunes?
- India Air Conditioners | Who’s Chilling How
- Event Driven: ITC Acquiring Aditya Birla Group’s Paper Business
- Vodafone Idea: Another Lifeline, But Structural Challenges Persist
- Hindalco (HNDL IN): Investor Day Reaffirms Strategic Growth Plans
Hindware Home Innovation Ltd: Will Restructuring Change the Company’s Fortunes?
- Hindware Home Innovation (HINDWARE IN) plans to demerge its consumer appliances division into a separate listed entity.
- Demerger removes loss-making drag, improving profitability and segment-specific valuation clarity.
- Unlocks hidden value; better execution with new CEO with clear growth trajectory may lead further value creation for shareholders.
India Air Conditioners | Who’s Chilling How
- In this Insight, we aim to understand the current demand, environment, competition, and margin trends for major air conditioner manufacturers in India.
- Dealers remain optimistic despite a slower seasonal start, anticipating accelerated growth in this season. While there have been price increases, competition, and cost inflation may not translate into margins.
- Some of the companies in Focus include Voltas Ltd (VOLT IN), Havells India (HAVL IN), Johnson Controls-Hitachi Air Conditioning India (JCHAC IN).
Event Driven: ITC Acquiring Aditya Birla Group’s Paper Business
- ITC Ltd (ITC IN) recently announced the strategic acquisition of Century Pulp and Paper (CPP) from AB Real Estate (ABREL) for INR 3,500 crore on a slump sale basis.
- This Business Transfer Agreement (BTA) occurs amid an industry downturn marked by surging input costs, subdued demand, and competition from low-priced imports.
- This acquisition significantly expands ITC’s paper segment capacity by 60%, targeting a 30-40% EBITDA per tonne improvement.
Vodafone Idea: Another Lifeline, But Structural Challenges Persist
- GoI converts ₹36,950 crore of spectrum dues into equity, increasing its stake to ~49%. Promoters’ stake diluted to ~25.5%, with public shareholders now owning just ~23.8%.
- While the move eases cash outflows till H1FY28, Vodafone Idea’s AGR dues, weak subscriber base, and funding needs remain material headwinds.
- Structural concerns remain unresolved, and further dilution risks persist along with loosing market share.
Hindalco (HNDL IN): Investor Day Reaffirms Strategic Growth Plans
- Hindalco provided details of its ongoing expansion plans of about US$9.1b (US$1.7b spent).
- We note near-term headwinds from a) likely weakness in aluminium prices driven by cheaper alumina b) scrap market tightness c) sharp contraction in copper Tc/Rc’s
- Valuations: Hindalco trades at about 6.8x EV/EBITDA FY26e which is inline with historic multiples. A lower multiple is warranted to factor impending headwinds.
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