Petroleum consumption declined 0.7% yoy in September driven by 11% decline in diesel (+20% yoy in Sep-15) and 3% decline in gasoline (+25% yoy in Sep-15), presumably affected by restricted freight/passenger movement due to strong monsoon, as compared to weak monsoon last year. Monthly volatility aside, growth has moderated to 8% in 1HFY17 as compared to 13% in 2HFY16 driven by moderation in gro
Stocks of selected textile companies were trading higher by up to 20% on NSE on the back of heavy volumes. Garden Silk Mills, Nahar Spinning Mills, Vardhman Polytex, Raymond, and Indo Count Industries were up 3%-20%, as compared to 0.18% decline in S&P BSE Sensex and 0.21% decrease in Nifty at 3:00 PM.
Garden Silk share price surged 20% to Rs 38.55 after the company announced fund
Metals & Mining - Advantage Non-ferrous Players; Ferrous Players to See a Seasonally Weak Quarter - Reliance Sec
2QFY17E is expected to be strong for non-ferrous players, while the ferrous players are expected to report sequentially weak numbers due to lower steel prices and higher cost of inputs. Despite price hikes in August & September, the average realization is expected to decline by ~4% qoq, exerting pressure on profitability. Sales volum
We expect a muted Q2 for power generation players NTPC and JSW on account of poor demand from discoms. NTPC should report flattish growth in thermal output and lower PLFs (~74.7% vs. 81.4% in Q1FY17). JSW, with a 27% decline in thermal power generation in Q2, would also be hit by rising cost of imported coal and INR depreciation. However, transmission play PWGR should see a good Q2 led by stron
As per RBI data, credit growth for the fortnight ended 30 Sep’16 increased sharply to 10.4% YoY while deposit growth picked up to 11.3%. We think the sharp improvement in both credit and deposit growth was largely a quarter-end phenomena. Investment growth declined to 6.9% YoY while SLR slid to 26.3%. Credit growth has been weak over the last few months due to low corporate demand and a l
NIFTY FIN SERVICE Current Close: 7795.40 Trend : Negative
* NIFTY FIN SERVICE is one of the underperforming sectoral indices, as it has closed down by 2.82% at 7795.40, as against a down move of 1.31% in benchmark NIFTY 50.
* After making an all time high @ 8413.85 last month;
NIFTY CPSE Current Close: 2342.50 Trend : Positive
* NIFTY CPSE is the only positive sector amongst all the indices last week, as it has moved up by 0.58%, as against a down move of 1.31% in benchmark NIFTY 50.
* Last to last week, the Sector created a FRESH 52 week HIGHS at 23
ICICIBC, Standard Chartered Bank, SBIN, PNB key beneficiaries
EVENT: Essar Oil (EOL) promoters have sold 98% stake in the company to Rosenet, Trafigura and United Capital Partners. The deal values EOL at INR730b (v/s capital employed of ~INR330b). The promoters have also sold their entire stake in Vadinar Port to the same investors for INR133
A decade and seven years ago an Indian man hailing from the Indian capital enthralled the technology departments of global corporations with a ‘tale of a tempest’ many times more amplified and puffed up than the abundant crop of hair he sported. The latter was a wig while the former was mere bad science fiction gift-wrapped by consultants as a 600 billion dollar hair-raiser. However
Cement companies had reported subdued profit growth in the previous quarters. But experts say that they may not disappoint in September quarter. Cement companies are anticipated to post a healthy 35 per cent year-on-year growth in EBITDA per ton led by robust cement prices as well as strong inventories of low-cost fuel.
However, an extended monsoon season may have impaired the demand
The new draft tariff order recommends sweeping changes in the broadcasting sector with respect to content pricing and negotiation. The order goes a long way in democratising content viewing by placing strength in the hands of consumers for package/channel selection. However, for the distribution network model to succeed, TRAI has assumed that phase-4 digitisation will be complete by Dec’1
We expect Q2FY17 to largely witness soft profitability growth in the capital goods sector given the muted execution environment and lack of orderbook support barring T&D, water and companies with low base of profitability (BHEL, EIL, TWL). For our coverage universe, we expect sales/EBITDA/PAT to grow by 4.8%/5.0%/2.4% respectively. However, accounting changes (shift to IND-AS) may present a
Our channel checks suggest cement industry volumes are likely to have grown in mid-single digit both MoM and YoY to ~22mnte during Sep’16 (production grew 3.1% YoY during Aug’16 as per DIPP). As intensity of monsoon receded during Sep’16, volumes across most regions except South started to show MoM growth. Volumes were however still impacted by festivals, the inauspicious Shra
Larger broadcasters like Zee and Star better off TRAI recently published draft guidelines on non-discriminatory content pricing. While there are still a few unknown variables in the equation – such as a verdict on carriage fees – the Indian content landscape is steadily moving towards a uniform pricing regime. The regulator intends the guidelines to be implemented from April 01, 201
However, no major price improvement likely in October due to festivals
All India average realization for 2QFY17 increased marginally QoQ, despite seasonal weakness.
The West, which witnessed 3% QoQ price decline in 2QFY17, has seen sharp price hikes of ~INR40/bag in the last 3-4 weeks.
Given the subdued demand due to fe
We met ~20 investors during a recent roadshow to the US. Discussions on banking sector NPAs revealed that most investors believe NPAs have been successfully identified, but are skeptical of their resolution. Interestingly, SBIN was the flavour of the season, garnering keener interest than AXSB and ICICBC. As for YES, investors would like to wait for the QIP to conclude before taking any fresh l
We expect business growth for banks in Q2FY17 to remain muted, with private sector banks continuing to maintain a relatively higher growth momentum. Although core spreads are likely to improve on declining cost of funds and relatively lower slippages, margins are estimated to remain flat sequentially on change in business mix. Sharpe decline in bond yields would aid trading gains and relatively
* Indian Major Ports handled 50.7 mn tons in the month of September 2016, clocking a growth of 8.1% YoY, however declined 2.4% MoM, growth was seen in POL (+21.1% YoY), iron ore (+379.5% YoY) and other liquids (+19.8% YoY) offset by decline in other cargo (-36.3% YoY), coal (-13% YoY), container (-2% YoY) and fertlisers (-4.9% YoY)
Our pharma universe is headed for a muted Q2FY17 with expected revenue/PAT growth of 10.3%/5.1% YoY. QoQ, EBITDA margins are forecast to contract 140bps and earnings to decline 7.9% due to competition in key products, a lack of approvals and high R&D costs. We see a silver lining from stronger growth in domestic markets (inventory restocking + positive seasonality) and EMs (forex tailwinds)
PL universe of stocks is expected to see a 9.4% and 2.8% increase in revenues YoY
and QoQ, increase in EBITDA by 24.1% YoY and contraction of 1.6% QoQ, increase
EBITDA margin by 241bps YoY and a contraction of 91bps QoQ with PAT seeing a
19.5% increase YoY and a decline of 6.3% QoQ. We expect the banks to lead the
earnings growth in FY17 and it is expected to be more
With strong volume growth we expect our Auto Universe to register 5.6% yoy & 10.2% yoy rise in revenue and EBITDA, respectively in 2QFY17. Excluding TML, we expect our coverage universe to register 17.1% yoy & 11.4% yoy rise in revenue and EBITDA, respectively as two-wheeler universe is expected to register better revenue growth compared to four-wheeler universe. Our two-wheeler univers
Q2FY17 would be a test of efficiency for downstream and upstream oil companies as macro parameters such as oil prices, USD/INR and benchmark GRMs remain flattish QoQ. OMCs are unlikely to see any significant gains from inventories, while sustaining GRMs could be a challenge, especially for HPCL. RIL’s earnings could surprise yet again, driven by improving petrochemicals spreads. Gas utili
Power & Capital Goods - 2QFY17 Results Preview - Poor Power Demand to Impact Revenues - Reliance Sec
Power Sector witnessed lower generation growth of 1.3% yoy in 2QFY17 on the back of lower system demand despite higher coal availability. All-India generation rose by 1.3% yoy to 287bn units (BUs) during the quarter. Thermal generation rose by meagre 0.3% yoy lower owing to lower system demand despite higher coal inventory, while hydel generation improved by 3.5% yoy due to improved reservoir l
Cement - 2QFY17 Results Preview - Resilient pricing amid seasonal crisis to aid performance - Reliance sec
2QFY17E Sector Preview
Favourable realizations along with cost benefits is likely to aid cement companies to continue to report healthy growth in earnings on yoy basis. The companies under our coverage are likely to witness EBITDA and earnings improvement to the tune of ~23% yoy & ~47% yoy, respectively. However, seasonal overhang and hardening of
Q2FY2017 to be another weak quarter:
The headline growth figures for the Sensex companies do not inspire much confidence in Q2FY2017 also. The aggregate net profit of the Sensex companies is likely to remain flat in the quarter despite a mid-single digit growth in the revenue and a margin expansion of close to 50 basis points as compared with the corr