The domestic automobile sales for March 2017 were mixed bag with the Passenger Vehicles (PV) segment posting a double digit growth of 11% YoY. Commercial Vehicles (CV) sales grew by 7% YoY while the Two Wheeler (2W) segment reported flat volumes. The PV segment growth accelerated to double digits as against a high single digit growth posted earlier, led by new launches and an improved demand sc
Reason for report: Monthly volume analysis
Two-wheelers: Decent show despite uncertainty over SC ruling on BS-III inventory
* Hero MotoCorp (Hero) March volumes surprised positively and grew 1% YoY and 16% MoM to ~610k units, despite the impending SC verdict on BS-III inventory likely impacting dispatches in the last 2
Testing quarter before a promising summer
Reason for report: Quarterly results preview
Research Analysts: Ansuman Deb firstname.lastname@example.org +91 22 6637 7312 Q4FY17 is likely to be the bottom for airline margins as cost tailwinds come back from Q1FY18. As such, valuations will not depend on this quarterly performanc
New subsidy rates fixed for P&K fertilisers
* Government has reduced the subsidy on Phosphorous (P) and Potash (K) by 9% and 20% respectively on the back of falling prices of phosphoric acid and potash. However, due to sharp increase in prices of ammonia in the recent months, subsidy on Nitrogen (N) has been increased by 20%. Subsidy on Sulph
HAM bidding update
* Results for 4 Hybrid Annuity projects were declared on 22nd Mar, 2017:
1. Dilip Buildcon bagged 3 projects while Sadbhav managed 1 project
2. Also recently, Chitradurga - Davanagere was awarded to PNC Infra and Ranastalam - Anandapuram was awarded to Ashoka Buildcon
Reason for report: Sector update Research Analysts:
Abhijit Mitra email@example.com +9122 6637 7289 Ansuman Deb firstname.lastname@example.org +9122 6637 7312 We met with DFCCIL, the agency in charge of implementation of Dedicated freight corridor (DFC). Following are some of the key takeaways. We feel DFC can start creating some impa
The bullish thesis on Indian IT services is hinged on the following:
1) Likelihood of an improving demand backdrop in the BFSI vertical through the course of FY18, especially around short cycle discretionary projects,
2) downstream digital integration work, which lends itself better to a global delivery model (GDM) and where the market share
* NIFTY PHARMA is one of the perennially underperforming sectoral indices, as it closed down by around 1.38% at 104116.15, as against an up move of 0.72% in benchmark NIFTY 50.
* The Sector had made a recent swing high @ 11215.45 in the month of Dec 2016, lower, as compared to Sep 2016. Thus it has failed to sustain at
* NIFTY PSU BANK is the most outperforming sectors amongst all the indices last week. It moved up sharply by 4.96%, as against an up move of 0.72% in benchmark NIFTY 50.
* The Sector is in medium term Bullish Trend with the formation of Higher Top Higher Bottom sequences in all time frames charts as Daily, Weekly as w
PLF down to historic low due to incremental capacity & soft demand
* Generation largely remained flat at -0.1% YoY in February 2017 primarily due to soft demand and incremental capacity. Growth was also down due to high base effect as FY16 was a leap year with 29 days in February 2016 vs 28 in February 2017
* The overall industry PLF declined
* Successive failure of North-East monsoon since last two years and below normal rainfall (82-85% of LPA) in South India during South-West monsoon has result in drought like situation in Tamil Nadu and Karnataka and few districts of AP and Telangana
* Our interaction with agri-input dealers and farmers in these states suggest that due to low water levels in reservoirs, yields of most
Print Media Sector - Vernacular print stays steady while English struggles, Radio to grow the fastest - Equirus Sec
Indian media industry grew a little bit slower at 9.1% in CY16 compared to a CAGR of 11.6% for the last 5 years mainly due to adverse impact of demonetisation in 3QFY17. Print advertising revenue growth slowed to 6.3% yoy in CY16 (vs. +7.3% yoy in CY15). However, within Print, Hindi/vernacular print grew at 7-9% while English print grew modestly by 4% yoy. Digital advertising continues to gain
Earnest states start showing improvement
The Union ministry of power, in order to help the sector tide over risks posed by the alarming weakness in financial position of discoms, unveiled UDAY (Ujwal Discom Assurance Yojana). The scheme, which aims at operational and financial improvements in discoms, has been subscribed to by 22 states so far. In this
We attended Media and Entertainment industry conference FICCI Frames 2017 – Digital:
Divide or Dividend? last week. Key takeaway from the conference was industry consensus on increasing importance of digital media in India and its role as a collaborator with traditional media rather than a disruptor. Industry participants believe that India is a
Key Highlights – Feb’17
We introduce our new product Model Run where we give a detailed analysis/performance of various models in each segments of 2Ws and 4Ws. Post demonetization there has been some recovery in 2Ws, while new models continue to rule 4Ws. While sales of 2Ws were flat YoY, as scooter growth of 4% negated the -3% growth in m
* Cement prices increased by Rs20-25/bag in most parts of the North region in last one month. Our channel checks indicated that cement demand has been most impacted in the North post the announcement of demonetization by the Central government in Nov-16
* In the Central region, cement prices increased by Rs10/bag in East/Central UP (Uttar Pradesh) and MP (Madhya Pradesh). In the West
* NIFTY PHARMA is one of the perennially underperforming sectoral indices, as it closed down by around 1.11% at 10556.35, as against a down move of 0.57% in benchmark NIFTY 50.
* The Sector had made a recent swing high @ 11215.45 in the month of Dec 2016, lower, as compared to Sep 2016. Thus it has failed to sustain at higher leve
* NIFTY REALTY is the most outperforming sectors amongst all the indices last week. It moved up by 2.50%, as against a down move of 0.57% in benchmark NIFTY 50.
* The Sector is in medium term Bullish Trend with the formation of Higher Top Higher Bottom sequence in all time frames charts as Daily, Weekly as well as Monthly, as can
Domestic steel prices struggle
We met CRCA distributors of one of the largest steel producer of India. What we see is an increasing resistance in the domestic market for passing on the price hikes. The price hike undertaken in January (Rs 3,000/te) has been largely rolled back, in Mid Jan and Feb, ’17. Price increases in March, ’17 are more
RM index contracts, product prices ticking up
The RCML RM cost index declined 1% MoM in Feb’17 (+14% YoY) as key raw materials moved into deflationary mode. On the product pricing front, detergents and soaps saw sharp hikes, even as promotional activity was restricted to large or bundled packs. We reiterate our cautious stance on the sector as we
Transmission & Distribution (T&D) on track for major expansion
While the power sector has seen remarkable accretion in generation capacities, investments in T&D networks have lagged behind, causing network congestion and inefficiencies. The requirement for large scale transmission gets further accentuated as the load centers are scattered a
Capacity utilization heading northwards!
Capacity utilization continues to remain northwards and increased by 400 bp YoY to 70.3%. Since August 2016, capacity utilization has risen from 68.3% to 70.3% signaling concern over rising oversupply of crude steel. China’s steel production continues to grow at 4% YoY to 61 mt despite all the noise of cap
Domestic load factor at 87.2%; IndiGo’s domestic ASK/RPK share highest
* Domestic air passengers in India grew ~20% YoY (adj.) in Feb-17 (v/s +25.3% in Jan-17; +23.1% in 3QFY17). However, we believe this strong growth would be at the cost of yields, as seen in headline fares.
*While Feb-17 ASK growth stood at 17.8% YoY (adj.) (v/s +21.1
NBFC-MFIs to take a hit as RBI reins in SHGs
The RBI has directed banks to collect and share a database of self-help group (SHG) members with credit information bureaus from Jul’16. While this move will strengthen the microfinance database in the long run, NBFC–MFI credit growth
NIFTY FMCG Current Close: 23491.25 Trend : Positive
* NIFTY FMCG is one of the most outperforming sector amongst all the indices last week. It moved up a good 5.15%, as against an up move of 2.52% in benchmark NIFTY 50.
* In the month of Feb. 2017, the Sector created an All Time