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 However, no conclusion withdrawn regarding freezing of output as Iran has not agreed on the contrary.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
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