It Sector - Sentiment likely to override fundamentals in the near term - ICICI Sec

Sentiment likely to override fundamentals in the near term

Q1FY17 is likely to see divergent revenue execution from large-cap companies in our coverage universe with Infosys and TCS expected to do well with revenue growth in constant currency terms of 3.7% and 3.5% QoQ respectively, and Wipro and Tech Mahindra likely to see just broadly flattish growth

4/07/2016 4:47:36 PM | Posted in Broking Firm Views - Sector Report read full news
India Utilities - Discoms structurally weak; prefer transmission - RCML

In our view, there are no easy solutions to address the deep structural malaise in India’s power distribution sector, with the Govt.’s UDAY scheme offering a temporary liquidity respite at best. For power producers, a modest demand uptick off a low base could steady PLFs in FY17, but on the whole, transmission remains the most favourable business from a risk-reward perspective. We h

4/07/2016 4:39:24 PM | Posted in Broking Firm Views - Sector Report read full news
List of sectors and scripts which will be positively impacted by the GST coming - Dynamic Levels

The most awaited GST bill is expected to be passed in the parliament in its July session starting from 18th July. The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on goods and services across the country. Taxes such as excise duty, service, central sales tax, VAT (val

1/07/2016 5:26:57 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: May’16 non-food credit growth stable at 8.4% - RCML

Non-food credit growth in May’16 was stable at 8.4% YoY as compared to the previous month. While growth in agricultural credit was largely stable at 15.6% YoY, retail growth softened a bit to 19.1% YoY. Services sector credit growth declined to 9.3% YoY (Apr’16: 10.9%), while industry credit was flat. Despite a strong uptick in the telecom and road sectors, infrastructure loans rema

1/07/2016 5:19:29 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Credit growth remains subdued - Prabhudas

RBI’s monthly sectoral deployment of credit showcases that overall credit growth remains subdued at 8.4% YoY as at May 27, 2016 similar to what has been in the previous month. Industry segment continued its slow movement growing at 0.9% YoY, while retail continued its strong growth trajectory with 19.1% YoY (0.9% MoM) growth. As a result of strong growth in retail credit, the share saw in

1/07/2016 5:03:02 PM | Posted in Broking Firm Views - Sector Report read full news
Sector Update - It Sector - Kotak Securities Ltd

A steady quarter but challenging outlook.

1QFY17 revenue growth will be strong for Infosys and TCS but margins will decline led by seasonal factors. We revise estimates as we (1) build in revised currency forecast of KIE economist, (2) cut revenue growth rate by 0.6-1.2% to build in the Brexit impact and (3) raise risk premium to account for uncertain

1/07/2016 4:36:38 PM | Posted in Broking Firm Views - Sector Report read full news
Foreign debt rises 2.2% in FY16 - External vulnerability continues to improve - RCML

India’s external debt inched up by 2.2% to US$ 485.6bn (23.7% of GDP) in FY16 led by higher NRI deposits. However, the share of short term and sovereign debt declined while the ECB stockpile stabilised. Overall, external vulnerability continued to improve, driven by the build-up in forex reserves. We expect India to weather the upcoming FCNR (B) redemptions, albeit with some volatility in

1/07/2016 2:15:36 PM | Posted in Broking Firm Views - Sector Report read full news
It Sector - Brexit: Prima facie relevance for Indian IT - Motilal Oswal

Brexit: Prima facie relevance for Indian IT…

… Deals with matters of currency, BFSI spending and talent mobility

* What Brexit means for Indian IT’s medium-to-long term fundamentals will understandably get clearer only with time; with the immediate discernable impact coming from currency m

30/06/2016 1:19:39 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - RBI’s FSR points to increased stress in system - RCML

The RBI’s Financial Stability Report (FSR) released today indicates two positive trends over the last six months: (a) improvement in corporate credit health with exposure to levered players reducing to 14% in Mar’16 (Sep’15: 19%), (b) a meaningful decline in stressed advances ratio for the infrastructure sector to 17% (from 22%). On the other hand, it warns of increased stress

29/06/2016 1:28:49 PM | Posted in Broking Firm Views - Sector Report read full news
India Banks - 4 key policies to watch under the new RBI governor - RCML

In the wake of RBI Governor Rajan’s exit, we highlight the ramifications of changes in four key regulatory areas should the new governor diverge from his predecessor’s stance: (1) tapping the RBI’s excess funds for PSU bank recapitalisation – a moral hazard but will resolve the matter of a large one-time capital injection required under Basel III, (2) operation of stress

29/06/2016 1:24:55 PM | Posted in Broking Firm Views - Sector Report read full news
It Sector - Analysing impact of Brexit! - Prabhudas Lilladher Ltd

Indian IT companies USD revenues will be adversely impacted by the sharp currency depreciation of EUR and GBP against USD led by Brexit. Further slowdown in Europe may have an additional impact on IT spending. As per our analysis, INR depreciation of ~3‐4% is necessitated to offset the EPS impact of 10% depreciation of EUR and GBP against USD.

 

* Cross

29/06/2016 1:19:06 PM | Posted in Broking Firm Views - Sector Report read full news
India NBFC - CE recovery treading a different path - RCML

CE recovery treading a different path

We met SREI Infrastructure’s (SREI) regional heads for Andhra Pradesh, Karnataka and Tamil Nadu, as well as direct selling agents active in South India. Our channel checks suggest an ongoing revival in CE finance, but unlike past upcycles where an NPA recovery always preceded loan growth, the pattern appears

28/06/2016 2:45:33 PM | Posted in Broking Firm Views - Sector Report read full news
India IT Services - Brexit raises red flag over European demand - RCML

Brexit raises red flag over European demand

Brexit poses serious risks to Indian IT given the sector’s high revenue exposure (26%) to Europe. While currency volatility (GBP, EUR) is an immediate risk, we see bigger concerns on the demand front as clients are likely to go slow on decision-making and defer new projects. This combined with an ongoin

28/06/2016 2:35:35 PM | Posted in Broking Firm Views - Sector Report read full news
Metallix: India Metals Tracker - Spreads down, price momentum fading - RCML

Spreads down, price momentum fading

In our new product ‘Metallix’, we track key trends in the metals sector, and outline our forecasts amid emerging regulatory and macro developments.

A decline in prices of finished steel has hurt spreads of Chinese steel mills over the past month, even as Indian mills continue to reel under weak

24/06/2016 4:42:23 PM | Posted in Broking Firm Views - Sector Report read full news
Metal Sector - The exigencies of reducing costs - ICICI Sec

Reason for report: Aluminium Sector Thematic

We try to understand the comparative domestic and global cost dynamics for the Aluminium industry. What comes across (from a limited review of global majors) are i) Indian majors have been able to reduce costs over the past 6-8 quarters at a fast cliff – in some cases much higher than the global peers

24/06/2016 4:36:44 PM | Posted in Broking Firm Views - Sector Report read full news
India Automobiles: Model Watch - UVs blaze a strong trail in May - RCML

UVs blaze a strong trail in May

New launches propelled growth across UVs even as momentum in scooter sales continued in May’16. 2W sales were up 10% YoY helped by 25%/19% YoY growth in scooters/mopeds. Honda has regained 59% market share in scooters, last seen in Jul’15. UVs grew 36% YoY with six new launches contributing 43% of sales. Nota

23/06/2016 4:43:17 PM | Posted in Broking Firm Views - Sector Report read full news
Agri Input & Chemicals - Agri Digest – Despite delayed start monsoon expected to be normal - Emkay

Agri Digest – Despite delayed start monsoon expected to be normal

* After a shaky start, the south west monsoon has finally made in roads as heavy rains has started to hit most parts of central and west India. During the first fortnight of June, the country received 25% deficient rainfall prompting the farmers to delay sowing. However, peninsular

23/06/2016 4:35:07 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - Credit growth dips to 8.7% - RCML

Credit growth dips to 8.7%

 As per RBI data, credit growth declined fortnight-on-fortnight from 9.8% to 8.7% for the fortnight ended 10 June. Food credit, which forms ~1.3% of total credit, declined by 17% YoY. Deposit growth remained steady at 9.6% YoY vs. 9.5% in the previous fortnight. Investment growth declined to 4.7%, while SLR increased to

23/06/2016 3:40:50 PM | Posted in Broking Firm Views - Sector Report read full news
MarketFresh: FMCG Tracker - Input cost inching up; pricing action limited - RCML

Input cost inching up; pricing action limited

The RCML RM index increased sequentially (+1.4% MoM) in May’16, with prices of both crude and agri baskets inching up. We saw fresh pricing action in detergents – Rin (-7.7% MoM), biscuits – Britannia Bourbon (+3.8%) and edible oils – Sundrop (+2.5%), in the backdrop of a weak macro

22/06/2016 3:39:14 PM | Posted in Broking Firm Views - Sector Report read full news
IT Services - Is the threat from GICs real? - Emkay

 The last 3 years have seen a steady increase in GIC (Global In-house centers)/Captive activities, with expansion of existing GIC setups as well as new players setting up own captive centres in India

 Historically, GICs have grown in ‘fits and starts’. Hence, while industry players acknowledge the increasing ‘‘insourcing’ trends, they see it as a cy

21/06/2016 5:07:41 PM | Posted in Broking Firm Views - Sector Report read full news
India Strategy - Ephemeral revival on reflationary steroids - Emkay

Ephemeral revival on reflationary steroids

As per our latest assessment India is headed for a reversal in inflation trajectory, contrasting the backdrop of a still subdued world inflation. This scenario will emanate from a combination of reflationary policies, government interventions in the agri sector, currency depreciation and uptick in global comm

21/06/2016 4:30:38 PM | Posted in Broking Firm Views - Sector Report read full news
Macro Chartbook - India in a nutshell - Religare Capital Markets Ltd

*Consumption demand:

Urban consumption demand in India remains healthy, with most high-frequency indicators growing at a robust pace in the last 3-4 months (i.e. sales of cars/UVs, air passenger traffic, credit card transactions, retail loan offtake, consumer durables production, petrol consumption). Key indicators of rural demand – two-wheeler

18/06/2016 5:29:47 PM | Posted in Broking Firm Views - Sector Report read full news
Telecom Sector - End of CDMA era in India; Bharti Airtel best play - ICICI Sec

As we approach the launch of 4G services by Reliance Jio (RJio), we believe it could likely mark the end of CDMA services. It is critical for RJio as completion of 850MHz spectrum refarming by RCom infers that RJio could use the spectrum (through sharing/trading route) for its 4G-850MHz pan-India launch. RCom has already vacated 850MHz in nine circles. Due to strong data card business, 55% of C

18/06/2016 5:17:50 PM | Posted in Broking Firm Views - Sector Report read full news
BoP Review - Risks emanating from lower capital flows to support Cad - Emkay

CAD unexpectedly came at -0.1% of GDP i.e. USD 0.3bn against our estimate of capital account surplus of USD 2.0bn. The divergence from our estimate is primary due to higher merchandise deficit reported by RBI. The capital account balance also slowed down to 0.6% of GDP i.e. USD 3.5bn thereby resulting in USD 3.3bn of net accretion to forex reserves. Firming up of crude prices could accentuate t

18/06/2016 5:14:32 PM | Posted in Broking Firm Views - Sector Report read full news
Equity market at crossroads - ICICI Securities

* Indian equities – a story of P/E multiple expansion since 2013:

Nifty rally since 2013 has been one of optimism driving P/E multiple expansion from ~11.7x to ~17x currently, while one year forward EPS remained flat at ~ 440 over the last three years. In comparison, 2003 – 07 Bull Run was a combination of earnings growth and P/E multiple

18/06/2016 5:01:00 PM | Posted in Broking Firm Views - Sector Report read full news