Industrial credit slowed across sub-sectors in Nov’16, with loans to micro, small and medium enterprises reporting the biggest decline. Services grew at a slower pace MoM but performed relatively better than industries. We believe the ill effects of demonetisation on consumer durable, vehicle and home loans will be felt in Q4FY17, which is likely to put pressure on overall credit. Ex-reta
RBI’s monthly sectoral credit deployment data for Nov’16 continues to show weak credit offtake further propelled by demonetisation. Non‐food credit growth came off to 4.8% YoY/‐1.6% QoQ (also growth has higher impact because data reported is for 25days compared to 30days of previous year). Growth has come‐off from all segments with industry continuing to remain weak, while ser
Q3 is seasonally weak due to the holiday season and furloughs, and we expect a muted quarter for our IT universe. Large-caps are likely to report tepid USD revenue growth of -0.4% to +2% QoQ. Mid-caps too could see a weaker quarter than the commentary given post-Q2. While growth expectations from the sector have been reset down to an extent, a revenueled upgrade cycle must fire up for any P/E r
Agri Input & Chemicals - Agri Digest – Sowing progressing well but lower pest attacks a concern - Emkay
* Despite the demonetization of Rs500/1000 currency notes by the government causing an intermediate cash crunch among farmers, the Rabi sowing this season has been proceeding unabated (as of 23rd December 2016). Rabi acreage so far is 6% higher than at this point last year and is 102% of normal sowing area.
* Adequate availability of ground water and high moisture content with overall
Generation increased 4.4% YoY in November 2016 driven by strong growth across the coal and nuclear segment.
The overall industry PLF declined however declined marginally by 202 bps YoY to 41.4%. PLF declined across Hydro and Gas segment, but was up across the Nuclear segment. PLF across the Coal segment was largely flat dur
We expect Q3FY17 to witness typical weak seasonality. The quarter is also unlikely to provide any material evidence towards an improving second derivative of growth. That said, we do not envisage meaningful negative surprises as well (beyond what we already know) - in terms of vertical and client specific issues, incremental aggression in pricing, erosion in budgets, and delays in pipeline buil
Building Material - Reality bites in December after November sales see limited demonetisation impact - ICICI Sec
We attended the ACETECH Exhibition 2016 in Delhi last week which showcased a wide spectrum of building material companies exhibiting their range of products. We also made ground visits and interacted with the managements of listed and unlisted companies and their channel partners to sense the impact of demonetisation on the building material categories viz. ceramic tiles, sanitaryware, wood pan
December 2016 would be the first full month to witness the impact of demonetisation (announced on November 8, 2016). We expect December automotive sales to be worse than November 2016, as the OEMs resort to inventory liquidation (especially in 2W and PV segments) during the month. 2W universe sales are likely to decline by 12% YoY in December as against a 7% YoY drop in November. The PV univers
* Cement sales have been adversely impacted post the demonetization announcement by the Central government. Our channel checks indicate demand decline of 30-40% in the trade segment in most parts of the company which would impact industry despatches.
* Cement demand is expected to decline by 0.5% YoY in FY17 against our earlier estimate of growth of 5.5% YoY. Cement prices have come d
* Coal import in India stood at 16.28mt in Nov’2016 down by 9% both YoY and MoM. Coking coal import fell by 17% YoY and 125% QoQ to 3.55 mt whereas import of noncoking coal came in at 10.97 mt (-12%/-/7% YoY/QoQ).
* International coking coal prices remained high at US$314/t (+4.56% MoM) whereas non coking coal price momentum slowed down with 4.4% and 7.3% decline in Indonesia (5
NIFTY PSU BANK Current Close: 2991.30 Trend : Negative
* NIFTY PSU BANK is the most underperforming sectoral indices, as it closed down by around 5.61% at 2991.30, as against a down move of 1.89% in benchmark NIFTY 50.
* The Sector had made a recent swing high @ 3503.90, a few
NIFTY ENERGY Current Close: 10062.10 Trend : Positive
* NIFTY ENERGY is one of the relatively outperforming sectoral indices, as it closed down marginally by around 0.18% at 10062.10, as against a down move of 1.89% in benchmark NIFTY 50.
* In the month of Oct 2016, the Sector
* Indian Major Ports handled 54.1 mn tons in the month of November 2016, clocking a growth of 10.3% YoY however declined 1% MoM. YoY growth was led by POL (+10.8% YoY), iron ore (+281.4% YoY) and others category (+23% YoY) offset by decline in coal (- 17.8% YoY) and other liquids (-8.1% YoY)
* New Mangalore (+50% Y
Highlights of registration post demonetization
* As per government data we have analyzed the vehicle registration of 10 states (does not include all cities) on a weekly basis. While this does not represent entire state, however it gives the trend of how post demonetization vehicle registration have been hit hard. Following are the highlights of the sa
Indian Pharma Market: Monthly Checkup
* Indian Pharma market exhibited moderate growth pick up at 8.4% in November 2016 as against growth of 6% in October 2016 and growth of 10.2% in September 2016. On MAT basis (December 2015- November 2016) the growth rate was about 12%.
* Earlier IMS surveys on Demonetisation indicated response of stockis
The Indian consumer sector has been grappling with slowing volume growth over the last two years, even as margins have expanded sharply. Emerging headwinds from demonetisation and input cost inflation could hurt earnings growth and push back recovery to H2FY18; we thus pare estimates across our consumer universe. With valuations still not reflecting earnings risks, we reiterate our underweight
As per RBI data, deposit growth for the fortnight ended 9 December remained stable at 15.9% YoY, with banks witnessing incremental deposit inflows of merely Rs 0.74trn over the fortnight. As per the RBI, banks have distributed new currency worth Rs 59.3trn either over the counter or via ATMs during 10 Nov-19 Dec’16. Credit growth for the fortnight ended 9 December declined to 5.8% from 6.
Accenture’s (ACN) Q1FY17 revenues of US$ 8.5bn (+7% YoY LC) came in at the upper ended of its guided range (US$ 8.40bn–8.65bn). Both consulting and outsourcing revenues grew by 7% YoY LC. New bookings were soft at US$ 8.30bn (Q4: US$ 9bn) due to seasonality, and should pick up from Q2. ACN maintained its full-year revenue growth guidance at 5-8% LC. The company indicated a shift in
* SIT probe on microfinance in Maharashtra:
The Maharashtra government has announced that a special investigation team (SIT) will be formed to investigate alleged violations of RBI guidelines and exploitation of women by microfinance institutions (MFI) in the state. The Maharashtra state legislative assembly had a comprehensive debate on the issue on
For the month of November, capacity utilization of steel plants across the world rose by 250 bps YoY, highest since last more than two and half years to 69.6%. China, contrary to its announced policy of cutting steel output and consolidating production, ramped up production significantly by 5% YoY, highest ever since last more than two and half years. There is no relief in oversupply domestical
We analyse the air traffic data as available from the DGCA for the month of Nov’16. The trajectory of Indian aviation has remained largely on the same course of higher traffic, higher PLFs with weaker yields in FY17 thus far. Starting Q3, there has been significant improvement in PLFs by the market leader- IndiGo, relative to other airlines which will put pressure on the competition. We b
Cement Sector Outlook: Cautious in near term
* Cement volumes adversely impacted by liquidity crunch. Southern region unaffected by demonetization
* Cost pressures have increased with higher diesel and pet coke prices
* H2FY17 to witness volume and EBITDA de-growth led by slower demand and high cost
In our earlier report titled "Early trends indicate resilience, low probability of catastrophe", we highlighted that borrower's intention of repay remained intact through the 22 days post demonetization. While that is still largely true (most MFIs are reporting 90%+ collections despite very slow disbursements), instances of local political interference have emanated from the state
Coking coal prices down 9% WoW to USD259/t
* Indian steel market:
Long product (TMT Mumbai) prices were up 6% WoW. Sponge iron prices were also up 6% WoW while domestic scrap prices were marginally lower WoW. Domestic iron ore and pellet prices were unchanged. Domestic HRC product prices were unchanged WoW. R
CD ratio (systemic) saw a sharpest dip of over 340bps to 69.3% for the fortnight ending 25th Nov 2016 as deposit growth continued its extraordinary momentum on withdrawal of specified bank notes (SBN). However, this decline was accentuated by a sharp drop in loans of 0.8% from the fortnight ending 11th Nov 2016.
Though the decline in loan growth was partially anticipated, as larger pa