Cooling off. All-India cement prices saw a decline of `6/bag mom in June 2017, eroding some of the gains seen in the preceding two months. While West retained most of its price increases, North and Central have given up a large part of the increases taken at the start of the quarter. 1QFY18 will see realizations improve by `400/ton compared to the same period last year for pan-
Capacity addition slowing; to revert to mean in FY19
Bulk of the additions to come up in the South and East; unlikely to impact pricing
* We attended a conference call with cement equipment supplier, FL Smith on the likely capacity additions in India over the next two years.
* FL Smith expects aggre
Price correction continues in ferrous space
* In Ferrous space except China HR Sheet, which rose mildly by 3.5% MoM to US$528/tn, all other metals registered sharp correction. Iron ore both 62% and 58% fell by 19% and 12% MoM while coking coal fell by 39% MoM. Steel CIS fell by 2% to US$435/tn
NIFTY PHARMA has immediate support placed at 8550 levels
* NIFTY PHARMA is the perennial underperforming sectoral index, as it closed down by massive 10.79% at 9060.45, as against an up move of 1.77% in benchmark NIFTY 50.
* The Sector had faced a strong resistance @ 10250 - 10300 level s
NIFTY FMCG holds strong Bullish momentum.
* NIFTY FMCG is the best performing sectors amongst all the indices last week. It showed a strong up move by 4.74%, as against an up move of 1.77% in benchmark NIFTY 50.
* The Sector is in long term Bullish Trend with the formation of Higher Top H
Meeting notes from discussions with Industry consultant
We hosted a very senior Industry consultant for Investor meetings in Mumbai recently. The investor queries through the sessions were broadly focused on
* How is IT spending demand shaping up through CY17/FY18 given that we have had mixed views from the co
Renewable witnessed highest ever capacity addition of 7.2GW in April’17
* Generation increased 3.9% YoY in April 2017 driven by rise in temperature and incremental capacity. Growth was driven by 30.9% YoY and 2.3% YoY rise in generation across the Hydro base
NPPA raises question over validity of drug approvals
* NPPA in a recent notice has highlighted not only overpricing for certain drugs but also questioned whether the same were approved by the appropriate authorities like CDSCO
* The NPPA is effectively alluding to the practice of laun
The April PORTfolio
* Major Indian ports handled 55.8mn tons of cargo in the month of April 2017, clocking a growth of 6.3% YoY however declined 9.1% MoM. The major growth drivers were containers (9.8% YoY), POL (6.5% YoY), iron ore (+41% YoY) and other liquids (+8.5% YoY) while coal (-3.5% YoY) and fertilizer (-1.1% YoY) witnessed a decline
GST euphoria over now time to focus on core business
* GST rate for multiplexes was announced at 28% on ticket sales and 18% on F&B. This is substantially higher than expectation of 18% on ticket sales and 12% on F&B. However, lower rate assumption was with risk of anti-profiteering clause.
* F&B tax is higher than prescribed slab
Continuing with a tempered growth
Reason for report: Monthly update
Research Analysts: Ansuman Deb email@example.com +91 22 6637 7312 The air traffic in April continued with the new paradigm of tempered growth. The aggregate domestic traffic growth remained at 15% (February/March growth was also ~16/15%). Howeve
Risks to strong 1H seasonality?
* INFO’s 6-8% YoY guidance for FY18 embeds a normal seasonality with stronger 1H v/s 2H. Expectations from TCS are no different.
* CTSH interestingly cited that while 2Q is among the stronger quarters, guidance of 2.2-3.7% QoQ (and 7.7-9.2% YoY) does not reflect any worries on the demand outlook. Instead,
Structural shift toward scooters and SUVs continues
The big getting bigger – category leaders reinforce their dominance
* Demonetization puts brakes on growth of passenger cars and motorcycles.
* Value continues to migrate toward scooters and SUVs, driven by changing customer preferences.
* Uptrading in 2Ws/4Ws cont
India remains a net exporter of steel in April 2017
* Indian steel: Long product (TMT Mumbai) prices were down ~2% WoW. Sponge iron and domestic scrap prices were down by ~4% WoW. Domestic iron ore were unchanged, while pellet was marginally lower. Domestic HRC prices were unchanged.
* Raw Materials: Iron ore prices (China cfr) were down ~10
API expert meeting takeaways – Industry in a structural upswing
* Chinese API industry facing a ‘double whammy‘ from much stronger environmental norms and escalating US FDA strictures
* Global API industry has seen significant consolidation past few years ~ the top 4
Price correction continues…
* In Ferrous space iron ore, steel and HR Sheet prices fell down yet again due to mounting supply pressure. Coking coal price rose due to temporary supply shock from Cyclone Debbie in Australia.
* Iron ore prices of both 62% and 58% grade fell by 14
AUTO INDUSTRY VOLUME UPDATE - APRIL 2017
FY18 started off on a mixed note for the automobile manufacturers. In April 2017, demand was strong for the passenger car and tractor segment. Two wheeler segment performance continue to be on the recovery mode, post demonetization. Commercial vehicle segment (particularly MHCV segment) witnessed sharp YoY decli
* NIFTY PHARMA is one of the most underperforming sectoral indices, as it closed down by around 0.85% at 10120.90, as against an up move of 2.02% in benchmark NIFTY 50.
* The Sector had made a recent swing high @ 10806.80 in the month of Feb 2017, lower, as compared to Dec 2016. Thus it has failed to sustain at higher levels and a
* NIFTY PSU BANK is the best performing sectors amongst all the indices last week. It showed a massive up move by 5.36%, as against an up move of 2.02% in benchmark NIFTY 50.
* The Sector is in long term Bullish Trend with the formation of Higher Top Higher Bottom sequences in all time frames charts as Daily, Weekly as well as Mon
Output at record level, demand remains weak!
* Crude steel output in both India and China surges to highest level since last five years at 9 mt and 72 mt respectively in March despite fall in steel prices.
* World capacity utilization continues to go northwards YoY for the 8 th consecutive month with 220 bps YoY increase to 72.7% in Mar&rsquo
Agri Digest – Crop pattern likely to shift from maize & pulses to cotton
* Our interaction with seeds distributor in Telangana has indicated that cotton acreages are expected to increase by 20-25% while maize and pulses acreages are expected to fall by 30-40%. Kaveri is likely to gain market share on the back of new product launches such as &
* Generation increased 5.5% YoY in March 2017 primarily due to onset of summer and incremental capacity. Growth was driven by 6.0% YoY and 12.3% YoY rise in generation across the coal based plant and Hydro plants respectively.
* The overall industry PLF was flat at 43.6%. PLF declined across the Gas and Nuclear segment witnessing a 314 bps and 1378 bps YoY fall respectively. PLF acros
* NIFTY PHARMA is one of the most underperforming sectoral indices, as it closed down by around 3.07% at 10208.50, as against a down move of 0.34% in benchmark NIFTY 50.
* The Sector had made a recent swing high @ 10806.80 in the month of Feb 2017, lower, as compared to Dec 2016. Thus it has failed to sustain at higher levels and
* NIFTY REALTY is the best performing sectors amongst all the indices last week. It showed a massive up move by 10.75%, as against a down move of 0.34% in benchmark NIFTY 50.
* The Sector is in long term Bullish Trend with the formation of Higher Top Higher Bottom sequences in all time frames charts as Daily, Weekly as well as Mo
Project awards seen pick-up during Apr-Feb 2017
Construction sector is expected to post moderate performance for Q4FY17, primarily on account of weak execution in newly won projects. Awarding of new orders have been strong in key segments like Roads & Urban Infra during the quarter, though it remained below the initial targets set by govt (on delay