India Capital Goods Q1 Preview: Lackluster quarter; SELL LT, BHEL - RCML

India Capital Goods

Q1 Preview: Lackluster quarter; SELL LT, BHEL

The RCML capital goods universe had posted an above-expected Q4FY16 led by higher margins. In our view, margin gains are unsustainable given weakness in the investment cycle, which is likely to weigh on execution, while order inflows remain weak. Hence, we expe

13/07/2016 4:09:52 PM | Posted in Broking Firm Views - Sector Report read full news
India Metals & Mining - Q1 Preview: Ferrous to outperform non-ferrous plays - RCML

Q1FY17 is likely to be flat quarter for the RCML metals & mining universe with a 1.6%/0.3% YoY decline in sales/EBITDA. While MIP-led benefits (higher steel prices) and volume growth would drive profits for steel companies, a weak demand-supply scenario would hurt performance of mining stocks. Investors would closely monitor HNDL (and Utkal’s) results given its strong outperformance p

13/07/2016 4:05:09 PM | Posted in Broking Firm Views - Sector Report read full news
Banking Sector - Turning the corner, but a long turn - ICICI Sec

Q1FY17 performance of banks in our coverage universe is expected to show the following trends: a) sequentially abating slippages, yet elevated vis-à-vis the average of past couple of years, b) sequential improvement in margins on the back of abating slippages and declining cost of funds, and c) continuance of tepid business growth with retail segment gaining traction across the boar

13/07/2016 3:57:04 PM | Posted in Broking Firm Views - Sector Report read full news
Auto Sector Update > Q1FY2017 earnings preview - Sharekhan

Q1FY2017 result expectations

Auto universe (ex-TAMO) to post double-digit topline growth:

The automobile companies [ex-Tata Motors (TAMO)] are expected to report a healthy 12% YoY growth in revenues for Q1FY2017. Maruti Suzuki and Mahindra & Mahindra (M&M) are expected to lead the pack with a growth of

13/07/2016 3:47:21 PM | Posted in Broking Firm Views - Sector Report read full news
Metals Sector- Q1FY17 – Scope of earnings driven rerating appears limited - ICICI Sec

Q1FY17 witnessed significant earnings outperformance by the ferrous pack against the non-ferrous pack. With decent demand growth (Non-alloy steel demand growth for April/May 2016 was ~8%), and significant reduction in imports (~30% YoY), allowed 8-10% QoQ price hikes to stick allowing margin expansion across the board; highest improvement being observed in JSW Steel. Non-ferrous earnings suffer

13/07/2016 3:43:20 PM | Posted in Broking Firm Views - Sector Report read full news
Banking and NBFC Sector Update > Q1FY2017 earnings preview - Sharekhan

Q1FY2017 result expectations

Asset quality woes may continue; government, RBI measures positive: In Q1FY2017, while the gross non-performing assets (GNPA) levels may increase, the gross stress addition is likely to see improvement on a sequential basis before tapering off in the medium term. The government and the Reserve Bank of India (RBI) have take

13/07/2016 3:43:10 PM | Posted in Broking Firm Views - Sector Report read full news
Oil&Gas and Petrochemicals - Weak Q1FY17 hit by lower GRM, oil and gas price - ICICI Sec

Reuters’ Singapore gross refining margin (GRM) in Q1FY17 is down 38% YoY and 35% QoQ. Oil prices in Q1FY17 have recovered from lows of Q4FY16 and are therefore up 33% QoQ but down 26% YoY. Crude and product inventory gains due to oil price recovery would partly neutralise the hit from weaker GRM for oil marketing companies (OMCs) and Reliance Industries (RIL) in Q1FY17. We estimate RIL&rs

11/07/2016 5:45:25 PM | Posted in Broking Firm Views - Sector Report read full news
Cement Sector - Robust quarter; BUY on seasonal dips - ICICI Securities

We expect cement companies under our coverage to report 6.6%, 33% and 55% YoY revenue, EBITDA and PAT growth respectively during Q1FY17. Volume growth for companies under our coverage is expected to be 8% YoY backed by capacity expansions and delay in onset of monsoon. We expect ~5% QoQ (still down 1% YoY) improvement in average realisation led by sharp increases (10-15% QoQ) in North and Centr

11/07/2016 4:55:28 PM | Posted in Broking Firm Views - Sector Report read full news
India Consumer - Millionaire club spirit brands – key consumption trends - RCML

Based on the recently released data by Drinks International for millionaire club brands, we highlight the following underlying consumption trends (in volume terms) in India’s spirits industry: (1) Consumption for millionaire brands within the whisky category grew 5% in 2015 (2014: 7%). (2) At the company level, Pernod Ricard posted highest growth of 17% YoY led by Imperial Blue. (3) For U

11/07/2016 3:58:20 PM | Posted in Broking Firm Views - Sector Report read full news
Aviation Sector - Focus to remain on seat capacity growth - ICICI Sec

crude environment continue to prevent meaningful fare hikes. The highlight will be the ramp up in induction of the neos by IndiGo as it embarks on its ambitious capacity expansion. This is best understood from the highest sequential growth in the Available Seat Kilometres (ASKs) for IndiGo (8%) compared to SJet (3%) and Jet (~flat). The focus for SpiceJet (SJet) and Jet Airways (Jet) will be st

11/07/2016 3:51:05 PM | Posted in Broking Firm Views - Sector Report read full news
Auto and Auto Ancillaries - Q1FY17 Results Preview - Emkay Global

Automobiles

* Q1 Result Expectation:

We expect EIM (+28%), TVSL (+17%) and MSS (+15%) to report the highest revenue growth in our coverage universe. We expect highest EBITDA growth for TVS (+49%), EIM (+41%), HMCL (+46%) and MSS/EXID (+19%). We expect reported numbers to be volatile given the implementation o

9/07/2016 3:04:19 PM | Posted in Broking Firm Views - Sector Report read full news
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