Pharmaceuticals Q3FY17 Review- Weakening structural dynamics; valuations factor in negatives for time being - Emkay

Pharmaceuticals

* Our Emkay Pharma universe saw revenue growth of 11% YoY and 2% QoQ, EBITDA growth was 11% YoY and 3% QoQ whereas APAT remained flat on YoY basis and declined by 2% sequentially.  The key underlying thread in Q3 was the higher than expected pricing pressure as well as increasing R&D spend rate by Indian pharma companies as they

22/02/2017 5:37:46 PM | Posted in Broking Firm Views - Sector Report read full news
Auto and Auto Ancillaries Q3FY17 Results Review – Decent quarter post demonitisation - Emkay

Automobiles

*Our Auto OEM universe saw a revenue decline of 1% YoY, while ex-Tata Motors, it’s a growth of 3% YoY.

* Eicher Motors, MSIL and AL saw the highest revenue growth in our OEM universe at 43%, 12% and 8% respectively. Amongst ancillaries, Apollo and Motherson saw 17% & 12% YoY growth in topline respectively.

* Wh

22/02/2017 5:28:02 PM | Posted in Broking Firm Views - Sector Report read full news
India Pharmaceuticals - Q3 Review: Margin beat but core EBITDA weak - RCML

Our pharma universe posted in-line aggregate revenue growth of 13% YoY in Q3FY17, while the sector’s operating margin came in 120bps ahead of our estimate. Core EBITDA (ex-exclusivity sales) remained weak given the combined impact of price erosion in the US market and demonetisation headwinds in the domestic business. We remain selective on the sector and reiterate CDH, ARBP and SUNP as t

22/02/2017 4:20:10 PM | Posted in Broking Firm Views - Sector Report read full news
India Metals & Mining - Q3 Review: In-line quarter; HNDL, COAL top picks - RCML

Our metals and mining coverage delivered in-line Q3FY17 earnings on an aggregate basis. Company-wise, JSTL, NMDC, AIAE and JSP beat street estimates by over 10%, while SAIL underperformed. TATA’s in-line performance despite an earnings beat in its Indian operations was due to weakness in the overseas business. We expect a stronger Q4 across the sector as higher metal prices outweigh the r

22/02/2017 4:14:18 PM | Posted in Broking Firm Views - Sector Report read full news
India Consumer - Q3 Review: Poor show, revival likely a FY19 story - RCML

The RCML consumer universe posted tepid net sales/EBITDA/adj. PAT growth of 4%/0.9%/1.7% YoY for Q3FY17. EBITDA margin contracted 60bps YoY on higher RM cost inflation and increased other expenses (negative operating leverage). We have been underweight on the sector for the last 12 months and continue to find the risk-reward unattractive as valuations need to be reset to a lower earnings profil

22/02/2017 4:11:14 PM | Posted in Broking Firm Views - Sector Report read full news
India Automobiles - Q3 Review: 2W margins surprise, RM cost pinch in Q4 - RCML

Aggregate EBITDA/PAT dipped 1%/4% YoY for our auto universe in Q3FY17. 2W margins surprised positively, while PVs and CVs were below estimates. Though RM cost will pinch in Q4, we expect companies to take margin-accretive price hikes with BS-IV implementation. 2W volumes are poised to recover aided by marriage season demand in Q1 and an early festive season in Q2 (we model for 9% growth in FY18

22/02/2017 4:04:50 PM | Posted in Broking Firm Views - Sector Report read full news
Pharmaceuticals - Demonetization impact subsides but full recovery in IPM not clear - Emkay

Indian Pharma Market- Monthly checkup

* The Indian Pharmaceutical Market (IPM) reported moderate growth of c7% YoY to Rs.91.8bn for the month of Jan’17 and seems to have recovered from the brink it hit in Dec’16 (2.7% YoY growth); however, it’s still to fall back into the double-digit growth trajectory seen 4-5 months back.

22/02/2017 3:56:43 PM | Posted in Broking Firm Views - Sector Report read full news
MarketFresh: FMCG Tracker - RM index up, promotion intensity declining - RCML

The RCML RM index rose 2.3% MoM in Jan’17 (+16% YoY) as prices of key raw materials continued to firm up. Select prices hikes were seen in a few categories (though not material) and promotional intensity declined despite weak demand.We reiterate our cautious stance on the sector as topline growth should remain tepid in FY18 with margins being at peak levels. Emerging headwinds from input

22/02/2017 3:41:29 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - Deposit growth down a bit; Credit growth stable - RCML

As per RBI data, deposit growth for the fortnight ended 3 February declined to 13.5% YoY from 13.9% the previous fortnight. Deposit growth has started moderating over the last four fortnights after witnessing a spurt post demonetisation. Credit growth remained largely stable at 5%. Investments grew 26.4% YoY while SLR fell to 30.5%. We expect FY17 credit growth to remain under pressure.

22/02/2017 2:48:34 PM | Posted in Broking Firm Views - Sector Report read full news
India PharmaScope - Convalescing post-demonetisation - RCML

Growth in the Indian Pharmaceutical Market (IPM) recovered to 10.1% YoY in Jan’17 from 7.2% in Dec’16, driven by a volume uptick as demonetisation headwinds receded. Despite improved pricing, NLEM revenues fell 5.5% YoY (-9% in Dec’16) as volumes dropped. While the FDC market remains in pain (-34%), the non-NLEM and non-FDC segments improved. Therapy-wise, antidiabetic drug sa

14/02/2017 5:32:47 PM | Posted in Broking Firm Views - Sector Report read full news
India IT Services - Downgrade cycle bottoming; valuations cheap - RCML

The RCML IT universe saw Q3FY17 revenue growth of 1.3% QoQ (RCMLe 1.1%) and EBIT margins of 21.3% (RCMLe: 21.2%). While Q3 was expected to be slow, our IT universe largely met estimates or outperformed slightly. We think earnings expectations for the sector have moderated and Q3 results indicate a bottoming out of the earnings downgrade cycle. Valuations are cheap and greater comfort on estimat

14/02/2017 4:11:41 PM | Posted in Broking Firm Views - Sector Report read full news
Ports - The January PORTfolio - Emkay Global

* Major Indian ports handled 54.1mn tons of freight in the month of January 2017, clocking a growth of 3.6% YoY, however, was down 5.1% MoM. YoY growth was led by iron ore (+287% YoY), other liquids (+95% YoY) and fertilizer (+20% YoY). Growth was weighed down by a decline in coal (-13% YoY), POL (-4% YoY) and others category (-21% YoY)

* Mormugao (+58% YoY), Paradip (+22% YoY) and Co

14/02/2017 3:08:01 PM | Posted in Broking Firm Views - Sector Report read full news
Nifty Pharma has immediate support placed at 10150 levels - GEPL

NIFTY PHARMA   Current Close: 10438.10    Trend : Negative

Observation

* NIFTY PHARMA is one of the perennially underperforming sectoral indices, as it closed down by around 1.11% at 10438.10, as against an up move of 0.60% in benchmark NIFTY 50.

* The Sector had made a recent swing high @ 11215.45 i

13/02/2017 5:03:19 PM | Posted in Broking Firm Views - Sector Report read full news
Nifty Media holds strong Bullish momentum - GEPL

NIFTY MEDIA   Current Close: 3010.90   Trend : Positive

Observation

* NIFTY MEDIA is one of the outperforming sectors amongst all the indices last week. It moved up a good 3.54%, as against an up move of 0.60% in benchmark NIFTY 50.

* In the month of Oct. 2016, the Sector created an All Time High at 3158.

13/02/2017 4:58:27 PM | Posted in Broking Firm Views - Sector Report read full news
IT Services - Frenetic legislative activity ignore slight positives in December'16 results - Emkay

* Recent flurry in H1B visa reforms coupled with the leaked draft of the Presidential Executive order has prompted increased investor apprehensions in terms of adverse ramifications that the sector could possibly suffer.

* The broader contours of the bills being tabled include (1) raising minimum wages for H1B visa staff, (2) alterations in the methodology of administering visas, and

9/02/2017 3:24:57 PM | Posted in Broking Firm Views - Sector Report read full news
India Energy - Fundamentals sound – re-rating to continue - RCML

After a stellar outperformance in 2016, gas utilities continue to offer a structurally sound outlook, with key investment drivers playing out as expected: (a) low LNG prices are fuelling a spike in consumption, (b) pollution control measures are buoying CGD growth prospects, and (c) new LNG regasification capacities continue to augment supply. We initiate coverage on MAHGL with HOLD and reitera

9/02/2017 3:06:40 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - Deposits continue to decline; credit growth stabilises - RCML

As per RBI data, deposit growth for the fortnight ended 20 January fell to 13.9% YoY from 14.7% the previous fortnight. Deposit growth has started moderating over the last three fortnights after witnessing a spurt post demonetisation. Credit growth on the other hand has stabilised at 5.1%. Investments grew 32.7% YoY while SLR was stable at 31.7%. We expect FY17 credit growth to remain under pre

4/02/2017 4:00:58 PM | Posted in Broking Firm Views - Sector Report read full news
Oil & Gas Sector - Monthly round up – January 17 - Emkay Global

* Crude oil prices appreciated:

Brent crude oil averaged $54.6/bbl in Jan. 17 which implies a growth of 2.4% MoM as OPEC members pressed ahead with the planned output cuts. In fact, as per a recent Reuters survey, OPEC has already cut down 1Mbpd or 82% of its pledged output cut in January 2017 itself. Light-Heavy (L-H) differential declined by a magni

4/02/2017 3:53:09 PM | Posted in Broking Firm Views - Sector Report read full news
FMCG Sector - Better affordability to lead to ~3% volume growth in FY18 - ICICI Securities

Excise duty on cigarettes of all lengths saw a hike of 6% in the Union Budget 2017 unveiled yesterday. Key things to observe from the announcement:

a) Excise hike on cigarettes and chewing tobacco is same at 6%.

b) This is the lowest excise hike on cigarettes in the past five years – and lower than the projected nominal GDP growth and closer to the inflation band.

3/02/2017 2:55:14 PM | Posted in Broking Firm Views - Sector Report read full news
Telecom Sector - RJio leads MBB subs pack, but active subs only 84% of total - ICICI Securities

Reason for report: Subscriber data for the month of November 2016

Regulator (TRAI) released monthly subscriber and MNP (mobile number portability) data for Nov’16. Industry-active (VLR) growth was impacted by demonetisation and fell 1.7mn despite 10.4mn net add by RJio while net add for the top-3 operators stood at 0.3mn. Though RJio captured act

3/02/2017 2:35:20 PM | Posted in Broking Firm Views - Sector Report read full news
Cement Sector - Investment positives demolished - RCML

Investment arguments favouring a re-rating of the Indian cement sector look untenable as (a) demonetisation has deferred the touted FY19 capacity utilisation story, (b) the low-cost regime is winding down, (c) new entrants will induce price volatility, and (d) realisation gains post-GST seem uncertain. We are cautious on the sector and anticipate further consensus earnings cuts along with a con

3/02/2017 2:00:35 PM | Posted in Broking Firm Views - Sector Report read full news
Automobiles Sector Update - Passenger Vehicles lead; Commercial Vehicles on the path to recovery - Sharekhan

The Automotive sales for January 2017 were a mixed bag, with the domestic Passenger Vehicles (PV) segment registering a double-digit volume growth. A higher share of sales through the financing route, and new product launches in the recent past led to a 15.5% YoY volume growth in the domestic PV segment. The Two Wheeler (2W) segment’s sales fell by 8% YoY, but the pace of deceleration aba

3/02/2017 1:51:54 PM | Posted in Broking Firm Views - Sector Report read full news
India Telecom - Vodafone Q3 results – Competition remains intense - RCML

Vodafone Plc reported its Q3FY17 results, and key takeaways from an India perspective are: (1) The impact of competition is clearly visible in declining revenue. (2) A drop in ARPU levels (-8% QoQ) is in sync with the industry. (3) The India business has retained high-speed data subscribers amid stiff competition at 35mn (Q2: 36mn). (4) Churn rates are going up, with the postpaid churn rate hig

3/02/2017 1:40:03 PM | Posted in Broking Firm Views - Sector Report read full news
Metal Sector - Steel prices fell first time in seven months! - Emkay

Key observations

* Hard coking coal 25% MoM which is nothing short of a crash landing. Steel prices continued with the downward trail as well, falling 2% MoM. However, Iron ore prices for 62% and 58% grade held up and posted a decent rise of 6% and 18% MoM respectively.

* Iron ore prices should cool off with supply pressure emanating from

3/02/2017 1:13:15 PM | Posted in Broking Firm Views - Sector Report read full news