Challenging Quarter, Future Imperfect - Reliance sec

Sector Preview

We expect the IT firms under our coverage universe (ex-Majesco) to post a combined 1.5% sequential rise in USD revenue in 2QFY17. We expect the USD revenue growth of Top-5 IT firms to range between -0.7% to +2.6% qoq in reported terms, with Infosys likely to lead the pack. Mid-sized firms will see variation, with Persistent Systems &

7/10/2016 12:00:38 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - RBI issues new operational guidelines for SFBs - RCML

The RBI has issued a new set of guidelines for small finance banks (SFBs) in order to align their operations with universal banks. Key takeaways are as follows:

* LCR requirement:

Apart from the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR), SFBs now have to maintain a minimum liquidity coverage ratio (LCR) of 60% till Dec

7/10/2016 11:46:47 AM | Posted in Broking Firm Views - Sector Report read full news
IT Sector Update > Q2FY2017 earnings preview - Sharekhan

Q2FY2017 result expectations

Modest growth exacerbated by cross-currency headwinds:

Despite the July-September quarter being a seasonally strong quarter historically for the IT sector, the USD revenue growth in Q2FY2017 will remain modest, owing to cross-currency headwinds (8% GBP depreciation vs USD), delay in ramp-

6/10/2016 4:00:48 PM | Posted in Broking Firm Views - Sector Report read full news
Financials - Banks - Trading gains and lower cost of funds to drive earnings - Motilal Oswal

PSBs asset quality to show improvement; PBs to utilize one off gains to clean up

* We expect earnings to improve sequentially, as 2HFY16 and 1QFY17 earnings were marred by (a) AQR related issues, and (b) accelerated stress addition and provisioning. While provisions are likely to remain elevated (due to the lag impact of NPL addition), we believe incre

6/10/2016 3:39:09 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Q2 Preview: Treasury gains to prop up earnings - RCML

We expect Q2FY17 to be a relatively better quarter for our banking universe with only a 3% YoY decline in PAT as strong treasury gains will likely support profitability. The pace of slippages should reduce, but we expect provisions to stay high due to ageing NPAs. We expect subdued loan growth for our banking coverage, though mid-size private banks are likely to maintain robust 20%+ growth. Sma

6/10/2016 3:17:49 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Recovery still some time away: Crisil - RCML

Key takeaways from Crisil’s latest webinar on rating movements are as follows:

* Debt-weighted credit ratio the highest in five years:

Crisil’s webinar on ratings movement indicated that India’s debt-weighted credit ratio (debt of firms upgraded by Crisil to those downgraded) has increased

6/10/2016 3:05:35 PM | Posted in Broking Firm Views - Sector Report read full news
India Consumer - Q2 Preview: Anaemic quarter ahead - RCML

Our consumer universe continued to exhibit lackluster sales momentum in Q2FY17 with no cheer on either volumes or pricing. We expect aggregate sales/adj. PAT to grow at 9.3%/ 12.5% YoY, along with 55bps EBITDA margin expansion. With sales growth likely to remain anaemic in FY17 and margins at peak levels given the rising fragmentation of demand, we reiterate our negative stance on the sector. I

5/10/2016 5:13:57 PM | Posted in Broking Firm Views - Sector Report read full news
Media Sector - Muted ad growth - ICICI Sec

We estimate Q2FY17 to be a weak quarter as advertising growth is expected to be muted. We expect our ISEC universe to report 3% QoQ ad growth and slowdown in advertising in this quarter is likely to be seasonal and full year advertising is unlikely to disappoint. We expect ZEEL to post ad revenue growth of 16% (Q1FY17 was 19%) owing to a high base and some weakness in ratings in flagship channe

5/10/2016 5:06:50 PM | Posted in Broking Firm Views - Sector Report read full news
Robust Show - Monthly Sector Update - Reliance sec

Ahead of festive months, the consumer vehicle players have came out with strong dispatch numbers in Sept’16 as the festivities are two weeks ahead this year compared to last year, while the commercial vehicle players reported weak set of numbers.

Though the dealers expected some slowdown in footfall during second half of September due to Pitru Paksha – considered to be ina

5/10/2016 5:00:25 PM | Posted in Broking Firm Views - Sector Report read full news
Oil & Gas Sector - Monthly round up – Oct’16 - Emkay Global

* Rise in crude oil price:

Brent Crude oil price was up MoM by 1.5%, mainly because of anticipation of freezing output from the meeting in September of OPEC countries. Light-Heavy (L-H) differential declined by $0.6/bbl MoM to $2.4/bbl.

 

* Refining margins and product spreads:

Calcul

5/10/2016 4:22:43 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Monthly credit ‐ Dismal signs of improvement yet! - Prabhudas

RBI’s monthly sectoral deployment data continue to highlight the anaemic growth in industrial credit. Though credit growth remained stagnant at 8.2% YoY in Aug’16 compared to a growth of 8.3% in Jul’16 with industrial segment growth turning negative, a scenario we have not witnessed for many years. Growth came mainly from services (12.1% YoY, 0.2% MoM), Agri (13.6% YoY, 0.6% M

5/10/2016 4:16:32 PM | Posted in Broking Firm Views - Sector Report read full news
IT Sector - Will Sep'16 quarter lead to another round of earnings downgrade? - Emkay

* We head into an otherwise strong Sep’ quarter with sombre expectations with cautious commentary across players over the recent weeks

* While a 100-150 bps cut in Infosys’s FY17 revenue guidance is already expected (after the RBS contract cancellation and some moderation in spending momentum), we believe that street awaits more cues on the margin performance given the rev

5/10/2016 4:06:43 PM | Posted in Broking Firm Views - Sector Report read full news
India Energy - CGD gears up to accelerate volumes - RCML

* Domestic price cuts mostly passed on:

Price cuts announced by some of the large CGD companies for retail CNG and PNG segments, as a follow up to 18% cut in domestic gas prices, seems to suggest that cost reduction has been almost fully passed on (especially for CNG). With the exception of Gujarat Gas, almost all CGD companies seemed to be content wi

5/10/2016 3:48:35 PM | Posted in Broking Firm Views - Sector Report read full news
India Utilities - India still underpowered: Power Line Summit 2016 - RCML

Power Ministry figures paint a power-surplus picture, but India is far from providing quality power to consumers willing to pay for it, according to panelists at the Power Line Summit 2016. Also, much needs to be done to unshackle state regulatory commissions from state politics so that tariffs can be rationalised. Panel discussions among utilities, policymakers, regulators and financiers furth

5/10/2016 3:44:00 PM | Posted in Broking Firm Views - Sector Report read full news
IT Sector - Have expectations been set low enough? - ICICI Sec

Q2FY17 is expected to witness tepid revenue momentum despite being the seasonally strongest quarter for the industry. Revenues at the top-5 large cap companies in our coverage universe are expected to grow by just 1.5% QoQ in Q2FY17 (~2.3% in CC terms) – which is the slowest Q2 growth in the past decade. However, unlike Q1FY17, investor expectations are also already reset downwards with c

4/10/2016 5:40:47 PM | Posted in Broking Firm Views - Sector Report read full news
Metallica - Coking Coal steals the show! - Emkay

Key observations

* Global steel prices improved slightly in the month of September. Demand remained tepid. Also, China and India registered record high steel production in the month of September. Therefore, steel prices are expected to remain under pressure at its current level

* Hard coking coal price continued to rally upwards by 54% to US$

4/10/2016 5:25:43 PM | Posted in Broking Firm Views - Sector Report read full news
Metal Sector - Weak underlying to test margins as RM firms up - ICICI Sec

The listed larger SoEs and private steel players in China are among the most efficient players and have typically contributed more towards exports. Large part of the government initiative today is to tackle/close inefficient capacities in smaller inefficient SoEs and consider a viable restructuring plan in them, including acquisition by larger SoEs. We see that the balance sheet of larger and e

4/10/2016 5:18:50 PM | Posted in Broking Firm Views - Sector Report read full news
Banking Sector - Treasury comes to the aid - Kotak - Sec

Treasury comes to the aid.

Earnings growth is likely to be in the negative zone at 15% yoy as banks make high provisions for bad loans. We see public banks reporting lower slippages qoq, but high provisions will continue, while Axis/ICICI Bank would have very weak quarters on slippages. Treasury gains would be strong mostly used to improve coverage. We

4/10/2016 5:10:57 PM | Posted in Broking Firm Views - Sector Report read full news
Automobiles Sector - Positive start to festive season - ICICI Sec

Two wheelers: Eicher and Yamaha indicate strength, incumbents awaited

* Royal Enfield (RE) sales continued to stay above the 50,000 mark, and have also been growing MoM for five straight months since May. RE volumes grew by 30% YoY to 55,842 units (H1FY17: up 34% YoY).

* India Yamaha Motors (Yamaha) volumes crossed the 100,000 mark and record

4/10/2016 4:49:37 PM | Posted in Broking Firm Views - Sector Report read full news
Nifty FMCG has immediate support placed at 21000 levels - GEPL

NIFTY FMCG   Current Close: 21542.05    Trend : Negative

Observation

* NIFTY FMCG is one of the most underperforming sectoral indices last week, as it has closed down by 3.47% at 21542.05, as against a down move of 2.50% in benchmark NIFTY 50.

* The Sector has made an all time high @ 23219.30 few week

4/10/2016 4:19:31 PM | Posted in Broking Firm Views - Sector Report read full news
Nifty Media holds Bullish momentum - GEPL

NIFTY MEDIA   Current Close: 2969.80   Trend : Positive

Observation

* NIFTY MEDIA is the only POSITIVE sector amongst all the indices last week, as it has moved up by 1.32%, as against a down move of 2.50% in benchmark NIFTY 50.

* In the previous week, the Sector has made an All Time High at 3034.15 and al

4/10/2016 4:10:00 PM | Posted in Broking Firm Views - Sector Report read full news
Spectrum Auction Saw Tepid Response from Telcos on Day 2 - Dynamic Levels

Seven telecom companies namely Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio, Aircel, Reliance Communications and Tata Teleservices are in the fracas for attaining 3G and 4G airwaves. It is going to be essential for retaining competitive edge in the market and offering next generation services in the world's 2nd largest telecom market.

The most important telecom operators B

4/10/2016 3:15:17 PM | Posted in Broking Firm Views - Sector Report read full news
India Energy - Domestic gas prices now below Henry hub - RCML

* Domestic gas prices now one of the lowest in the world..:

The government has maintained status quo on the gas pricing formula, allowing price to fall 18% to US$ 2.50/mmbtu (GCV, ~US$ 2.8/mmbtu on NCV) for period from Oct’16 to Mar’17. Considering the formula is based on international gas prices for a period of Jul’15 to Jun’16

3/10/2016 4:28:54 PM | Posted in Broking Firm Views - Sector Report read full news
India IT Services - Q2 Preview: Slow growth to pressurise margins - RCML

We expect another weak quarter of US$ growth for our IT universe in Q2FY17 as performance remains challenged across players. Large-caps are likely to report US$ revenue growth of only (0.5)-2.4% QoQ (organic), with INFO leading the pack and WPRO at the bottom end. Overall performance for large-caps under our coverage would be mixed as the sector grapples with lower growth and FX headwinds. Amon

3/10/2016 4:14:57 PM | Posted in Broking Firm Views - Sector Report read full news