In today’s briefing:
- LG Electronics India IPO: The Bear Case
- Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought
- MOIL Ltd: Plans to Double Output Well Supported
LG Electronics India IPO: The Bear Case
- LG Electronics India (123D IN)/LGEIL, a subsidiary of LG Electronics (066570 KS), aims to raise up to US$1.5 billion through a secondary offering (15% of outstanding shares).
- In LG Electronics India IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on bottom-quartile revenue growth, revenue decline in the largest product category, dividends to the parent far exceeding FCF and significant share overhang.
Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought
- HDFC Bank (HDFCB IN) is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).
- Our insight in January 14th 2025 signaled a strong buy opportunity, the stock rallied +13% from there.
- Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.
MOIL Ltd: Plans to Double Output Well Supported
- MOIL is India’s largest manganese ore producer, contributing over 50% of the country’s production. Its dominant position provides a competitive advantage in meeting domestic demand.
- Planned a capex of Rs24 billion until FY30. This investment will support brownfield expansions, greenfield projects, and modernization efforts, including shaft-sinking projects at Balaghat and Gumgaon mines.
- Valuations: Trades at a marginal premium to historic valuations. Debt-free balance sheet, 25yr+ mine life gives confidence over LT execution of expansion plans.
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