Slippages may moderate but credit cost to remain at elevated level - Reliance sec

Result Expectations / Sector Preview

Performance of banking sector is likely to remain under stress in 1QFY17, as we expect most of the banks to report higher credit cost led by the elevated level of fresh slippages in 2HFY16. The sector is undergoing a historic moment as for the first time in the history, the Reserve Bank of India (RBI) had conducted

9/07/2016 2:54:41 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - CCredit growth inches up to 9.4% - RCML

As per RBI data, credit growth for the fortnight ended 24 June improved to 9.4% after tumbling to 8.7% in the previous fortnight. Food credit, which forms ~1.3% of total credit, declined 10% YoY. Deposit growth was steady at 9.7% YoY vs. 9.6% in the previous fortnight. Investment growth inched up to 6.1%, while SLR was stable at 26.6%. Credit growth has been weak over the last few months due to

8/07/2016 3:12:13 PM | Posted in Broking Firm Views - Sector Report read full news
India Telecom - Q1 Preview: Focus on data performance -RCML

We expect our telecom universe to report steady QoQ wireless revenues in Q1FY17 led by continued data adoption. Margins however are likely to decline on account of higher network investments and LTE rollouts. For Bharti-Africa, we expect a weaker performance primarily impacted by FX. TCOM should report continued traction in data. Overall, we maintain our cautious stance on operators and retain

8/07/2016 3:08:06 PM | Posted in Broking Firm Views - Sector Report read full news
IT Sector - Sector Update > Q1FY2017 earnings preview - Sharekhan

Q1FY2017 result expectations

Seasonally strong quarter:

Strong seasonality, coupled with the impact of cross-currency tailwinds (10-40BPS) will drive the reported USD revenue performance for the April to June quarter. For the quarter under review, we expect a constantcurrency (CC) growth in the range of nega

8/07/2016 3:02:37 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Q1 Preview: Asset quality better, but profits weak - RCML

We expect a 30% YoY decline in PAT for our banking universe in Q1FY17 led by a poor show from PSBs. While asset quality would remain healthy for retail-centric private banks, corporate lenders would be closely monitored for watchlist slippages and credit cost guidance. Loan growth would inch up for PSBs, but should come in at a strong +20% for mid-size private banks. Retail NBFCs would see bett

8/07/2016 2:53:56 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Bandhan Bank – Annual report highlights - RCML

Key highlights of Bandhan Bank’s (unlisted) first AR (FY16) are: (1) Impressive SA deposit ratio of 20% in the first year of operations. (2) Average SA balance per account too low to benefit the bank in a meaningful way, and could even erode interest rate benefits. (3) Focus on retail/SME loans to increase. (4) Return ratios robust despite high bank transitioning costs. In our view, SA de

8/07/2016 2:44:15 PM | Posted in Broking Firm Views - Sector Report read full news
Religare Investment Call : Wood & Panel Products - Religare Sec

Wood and panel products industry is at the cusp of major growth led by many levers at work like strong growth in housing sector, shortened timeframe of replacement cycle, rapid urbanization etc. The industry composition is changing from just plywood and laminates, as earlier, to medium density fibre (MDF), veneer and prelaminated boards. Though wood and panel products industry is growing at ~ 1

7/07/2016 5:52:31 PM | Posted in Broking Firm Views - Sector Report read full news
Agri Input & Chemicals - Surprise intervention by government does not bode well for the industry - Emkay

* In a recent announcement by the government, fertiliser companies are advised to reduce complex fertiliser prices (DAP by Rs 2500/MT and MOP by Rs 5000/MT with immediate effect). This, in our and industry view, is not a welcome move since complex fertiliser (NPK) follows free pricing under NBS (Nutrient based subsidy) scheme

* We believe that the government’s move is driven by

7/07/2016 3:47:55 PM | Posted in Broking Firm Views - Sector Report read full news
India Cement Sector - Q1 Preview: Higher prices to drive up EBITDA/t - RCML

We expect a strong Q1FY17 for our cement universe as sharp prices increases lead to higher realisations (+6% QoQ avg.), in turn shoring up EBITDA/t by Rs 176 QoQ to Rs 932; volume growth however would be tepid, except for players with added capacities. We upgrade earnings for ACC, ACEM and SRCM to factor in higher prices and volumes, and expect a normal monsoon to drive a rural demand revival i

6/07/2016 3:17:02 PM | Posted in Broking Firm Views - Sector Report read full news
India Pharmaceuticals - Q1 Preview: Weak US, domestic biz to hit earnings -

We expect weak Q1FY17 earnings for our pharma universe on muted domestic sales and lower US revenues, even as favourable EM currencies offer some respite. We estimate 11%/9%/12% growth in sales/EBITDA/PAT, and 210bps higher margins QoQ given one-off costs in Q4. In a tough business scenario (channel consolidation, delayed approvals, compliance issues), we remain selective and prefer mid-caps (A

6/07/2016 3:04:01 PM | Posted in Broking Firm Views - Sector Report read full news
India Automobiles: Q1 Preview: Margin trajectory lower - RCML

We expect a modest Q1FY17 for our auto universe with 14%/11% YoY revenue/EBITDA growth but 40bps lower EBITDA margins. Only MM and TVSL would see better margins QoQ on a favourable product mix. EIM (C), TVSL, AL and MM would lead earnings growth YoY aided by double-digit volume growth and better margins. TTMT (C) would likely post a profit decline YoY and MSIL a flattish PAT on lower volume gro

6/07/2016 2:58:18 PM | Posted in Broking Firm Views - Sector Report read full news
Nifty IT continues its down trend with support only around 10800 - GEPL

NIFTY IT   Current Close: 11098.40   Trend : Negative

Observation

* NIFTY IT is underperforming amongst the sectoral indices, as it closed down by 0.94% at 11098.40, as against an up move of 2.96% in benchmark NIFTY 50.

* Sector has been facing a strong resistance of medium term downward slopping Trend lin

6/07/2016 11:58:16 AM | Posted in Broking Firm Views - Sector Report read full news
Nifty Energy enters a Breakout stage - GEPL

NIFTY ENERGY  Current Close: 8849.30   Trend : Positive

Observation

* NIFTY ENERGY is one of the top outperforming sectors amongst the indices last week, as it has moved up by 5%, as against an upward move of 2.96% in benchmark NIFTY 50.

* The Sector has given a major Price Range breakout @ 8780 - 8800 lev

6/07/2016 11:53:20 AM | Posted in Broking Firm Views - Sector Report read full news
Automobile - Sector Update - Sharekhan

Automobile sales for June 2016

The automotive industry reported mixed sales trends for June 2016. The passenger vehicle (PV) industry reported flat volumes for the month, impacted by lower dispatches by market leader Maruti Suzuki on account of fire at a vendor’s unit. Improved rural sentiments (due to good monsoon forecast) and pick-up in monsoo

6/07/2016 11:10:39 AM | Posted in Broking Firm Views - Sector Report read full news
Oil & Gas Sector - Monthly round up – Jul’16 - Emkay Global

Summary

* Crude oil price surged up:

Crude oil prices moved up by 3.85% MoM because scheduled meeting in June which was to be held to come to a conclusion on freezing production within OPEC countries. However, no conclusion withdrawn regarding freezing of output as Iran has not agreed on the contrary. Light-He

6/07/2016 10:07:04 AM | Posted in Broking Firm Views - Sector Report read full news
IT Sector - Seasonal strength on one side - Motilal Oswal

…and Brexit, Margins and Company-specific concerns on the other

Company-specific challenges may dampen seasonal traction…

Commentaries across the board through the quarter suggested 1QFY17 should depict strength as is normal in the first quarter of the fiscal for the industry. However, we don&rs

6/07/2016 9:55:26 AM | Posted in Broking Firm Views - Sector Report read full news
ITSector - Quarter Steady, but Future ‘Cloud’y - Reliance sec

Sector Preview

We expect the IT firms under our coverage universe to post a combined 2.6% sequential rise in USD revenue in 1QFY17. We expect the Top-5 IT firms to post 2.4-2.9% qoq organic growth, with Infosys likely to lead. We expect mid-sized IT firms to post 1-4.4% qoq USD revenue growth (except KPIT, which may will see a 3.6% qoq decline), with

5/07/2016 3:49:54 PM | Posted in Broking Firm Views - Sector Report read full news
IT Services - Seek more clarity on client spending trends - Emkay Global

* We expect a relatively strong revenue performance (2.3-5.5% QoQ US$ revenue growth) in line with seasonal trends in June’16 quarter for the Tier I offshore IT Services pack

* Margins are expected to be down sequentially across most of the companies (barring Mindtree, Persistent and Hexaware) on account of seasonal factors like wage increments, visa expenses and slight apprecia

5/07/2016 3:42:12 PM | Posted in Broking Firm Views - Sector Report read full news
Telecom Sector - A tad challenging quarter, but voice RPM rise a bright spot - ICICI Sec

Q1FY17 numbers for Idea Cellular (Idea) and Bharti Infratel (BHIN) would be impacted by change in their accounting system to IND-AS. We have estimated their quarterly numbers based on the new system for reference. However, we stick to earlier accounting system for our quarterly analysis for like-to-like comparison. We expect voice business revenues to grow 3.4% YoY (+2.2% QoQ) for listed entiti

5/07/2016 3:14:16 PM | Posted in Broking Firm Views - Sector Report read full news
India Energy - Q1 Preview: High gas consumption to boost earnings - RCML

We expect robust earnings for gas utilities under our coverage in Q1FY17, given the visible improvement in volumes and margins. Domestic gas consumption grew 3.1mmscmd MoM (+2.1%) to 137mmscmd in May’16 driven by higher consumption from the fertilizer sector. LNG imports too continued to trend above 2mmtpa levels in May, as low LNG prices pushed up demand. Top picks: GAIL, PLNG and IGL.

5/07/2016 1:49:49 PM | Posted in Broking Firm Views - Sector Report read full news
Transportation and Logistics Sector - India road freight trends and GST opportunity - ICICI Sec

Analysis of core road freight segment revenues of publicly listed road operators (VRL, TCI, and GATI) suggests that FY16 tonnage kilometres growth declined in FY16 (average peer group growth of ~2% versus ~6% in FY15). Decline in tonnage km growth was reflective of the weak underlying economy in FY16 (rural economy impacted by drought, IIP growth averaged ~2.4%, etc). Road freight segment accou

5/07/2016 12:47:04 PM | Posted in Broking Firm Views - Sector Report read full news
Auto-Roundup - LKP Sec

Mixed bag

Month of June saw a good traction in the SUV, tractors, scooters and LCV segment. On the flip side, cars and motorcycle growth was moderate, while MHCV and exports underperformed. Continuation of inventory pile up was visible in the month of June as far as the tractors are concerned on the back of a good monsoon arrival. LCV segment continued

5/07/2016 12:25:23 PM | Posted in Broking Firm Views - Sector Report read full news
India Consumer - Q1 Preview: Scarce levers for growth - RCML

Our consumer universe has exhibited lacklustre sales momentum in Q1FY17 with no cheer on either volumes or pricing. We expect aggregate sales and adj. PAT to grow at 9.6% and 12.7% YoY respectively, along with 70bps EBITDA margin expansion. With sales growth likely to remain anaemic in FY17 and margins at peak levels given the rising fragmentation of demand, we remain negative on the sector. IT

4/07/2016 5:20:40 PM | Posted in Broking Firm Views - Sector Report read full news
Cement Sector - Dealers check: Pricing continues to inch up on better demand - Reliance sec

All India average cement price improved by ~3% month-on-month (m-o-m) in June’16 mainly supported by substantial price rise in Central region (+9% m-o-m) and Northern region (+5% m-o-m). Notably, pick-up in pre-monsoon construction activities along with continued traction in infrastructure projects i.e. Roads & Highways and favourable government spending aided the price during the mon

4/07/2016 5:13:51 PM | Posted in Broking Firm Views - Sector Report read full news
India IT Services - Q1 Preview: Mixed growth with weaker margins - RCML

We expect soft US$ growth for our IT universe in Q1FY17, as performance remains mixed across companies. Large-caps are likely to report US$ revenue growth of only 0.3-3% QoQ (organic), with INFO leading the pack and TECHM at the bottom-end. Further, for our large cap universe, we expect a 88bps-237bps margin compression as the sector grapples with wage hikes, higher visa fees and FX. Among mid-

4/07/2016 4:51:05 PM | Posted in Broking Firm Views - Sector Report read full news