Another Challenging Quarter, All Eyes on IT Budgets - Reliance Sec

Sector Preview

We expect the IT firms under our coverage universe to post a combined 0.2% sequential rise in USD revenue in 3QFY17E. We expect the Top-5 IT firms to post -1.3% to +2.4% qoq USD revenue growth in reported terms, with Tech Mahindra (TECHM) likely to lead, albeit aided by acquisitions. Among mid-sized firms, Persistent is likely to out-per

6/01/2017 2:57:33 PM | Posted in Broking Firm Views - Sector Report read full news
India Pharmaceuticals - Q3 Preview: Anaemic Quarter - RCML

Our pharma universe is headed for a muted Q3FY17 with expected revenue/PAT growth of 11.8%/5.0% YoY. QoQ, EBITDA margins are forecast to contract 100bps and earnings to decline 5.1% due to competition in key products (gGleevec, gFortamet), price erosion in base US portfolios, a lack of material launches (barring gZetia for GNP and gTamiflu for NTCPH) and high R&D costs. Demonetization is an

6/01/2017 11:42:24 AM | Posted in Broking Firm Views - Sector Report read full news
IT Sector Update - Q3FY2017 earnings preview - Sharekhan

Q3FY2017 result expectations

A weak quarter:

The October-December quarter has seasonally been a weak quarter for the IT companies, owing to furloughs and lower number of working days. This time, the already challenging business environment was further impacted by the cross-currency headwinds (led by depreciat

6/01/2017 11:34:00 AM | Posted in Broking Firm Views - Sector Report read full news
Automobiles Sector - Monthly Update - Muted Performance - Reliance Sec

The OEMs posted muted performance in Dec’16 due to weak consumer sentiment as ongoing demonetization drive led to cash crunch in the system. The two-wheeler segment saw historically weak volumes due to weak demand in in rural segment.

 

CV Segment: Pre-buying may Aid in 4QFY17E

* As expected, CV segment was affected due t

6/01/2017 11:23:44 AM | Posted in Broking Firm Views - Sector Report read full news
IT Sector- In the middle of old and (potentially) new problems - Motilal Oswal

Gradual recovery to continue at TECHM; seasonality and BFSI keep 3Q expectations modest

Expectations laid low by macro and seasonality…

After a seasonally strong 1H offered nothing to write home about, compounding of furloughs in the third quarter keeps our expectations muted. The situation would be fur

5/01/2017 3:22:56 PM | Posted in Broking Firm Views - Sector Report read full news
Oil & Gas Weekly - Paradip refinery GRM jump to drive IOC’s FY18E EPS rise - ICICI Sec

The key recent developments/data points on the oil & gas sector are:

* IOC’s Paradip refinery, on stabilisation, can achieve GRM of US$11.4-12.0/bbl at product cracks and crude prices prevailing in Q1-Q3FY17

* OMCs’ Q3FY17 GRM is estimated at US$6.8-7.4/bbl and RIL’s at US$10.7- 11.1/bbl boosted by product cracks recove

5/01/2017 2:39:58 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - Credit growth slides to 5.1%, deposit growth to 15.2% - RCML

As per RBI data, deposit growth for the fortnight ended 23 December fell to 15.2% YoY, with banks witnessing a decline of Rs 0.75trn in deposit inflows over the fortnight. As per media reports, banks have received deposits worth Rs 15trn post demonetisation up to 31 December. Credit growth slid to 5.1% from 5.8% the previous fortnight. We think old denomination notes may also have been deposite

5/01/2017 11:34:52 AM | Posted in Broking Firm Views - Sector Report read full news
Oil & Gas Sector - Improving cash flows for IOCL – our top pick among the OMCs - Motilal Oswal

Improving cash flows for IOCL – our top pick among the OMCs

* Oil marketing companies (OMC) have outperformed the Sensex by 205% over FY14-16 and earnings growth has been 3.8x that of Sensex. As a result, higher RoEs (up from 10% to 18%) and lower gearing (debt:equity down from 1.5 to 0.75) make a case for a re-rating.

* The three oil

4/01/2017 2:42:09 PM | Posted in Broking Firm Views - Sector Report read full news
Auto Sector - Demonetisation drive related blues continue - ICICI Sec

Two-wheelers: Ebb and flow

* TVS Motors (TVSM) two-wheeler (2W) volumes de-grew by 7% YoY, as motorcycle volumes de-grew by 19% YoY (down 14% MoM to 58,189 units). Scooter volumes too de-grew by 15% YoY (down 24% MoM) to 55,536 units. Interestingly, mopeds witnessed growth of 14% YoY (down 16% MoM to 65,883 units).

* Royal Enfield (RE) volume

4/01/2017 12:38:50 PM | Posted in Broking Firm Views - Sector Report read full news
Media Sector - Tariff order – Choice, Change, Cost: Impact on Industry - ICICI Sec

The new tariff order from Telecom Regulatory Authority of India (TRAI) recommends a tectonic shift in the TV distribution space as it gives choice to consumers to select channels on a-la-carte basis without being burdened by high costs. This is likely to challenge the status quo and most players are worried that this will change the way they package and also have an impact on business model and

4/01/2017 12:34:12 PM | Posted in Broking Firm Views - Sector Report read full news
India Microfinance - Political risks receding but choppy waters ahead - RCML

We met four microfinance companies (Satin Creditcare, SV Creditline, Capital Trust, Fusion) that have a large presence in North India (30-35% exposure), especially western Uttar Pradesh, as well as a smaller footprint in Madhya Pradesh and Maharashtra. In this report, we study the fallout of demonetisation and pre-poll political maneuvering on these region-specific portfolios. Our interactions

4/01/2017 12:28:14 PM | Posted in Broking Firm Views - Sector Report read full news
Construction - Order inflows momentum to gain pace… - Karvy

We maintain our positive view on Indian Construction sector as we believe that order inflows momentum to continue with the environment turning more conducive for execution of projects. Increase in investments towards Infra focused sectors (like Roads/Highways, Urban Development, Railways, Irrigation) would continue to drive order inflows for the companies. Also, the measures taken by Govt. (lik

4/01/2017 12:24:43 PM | Posted in Broking Firm Views - Sector Report read full news
India Telecom - Q3 Preview: Mixed quarter despite positive seasonality - RCML

We expect our telecom universe to report mixed QoQ wireless revenue in Q3FY17 due to slower data growth as we build in the full-quarter impact of R-Jio’s introductory offer. Margins are likely to remain range-bound despite seasonal tailwinds, given continued 4G rollouts and slower data growth. For Bharti-Africa, we expect a more stable performance as the currency has steadied. TCOM will h

4/01/2017 12:14:29 PM | Posted in Broking Firm Views - Sector Report read full news
Telecom Sector - RJio’s free offer impact transitory, at least on data, but painful! - ICICI Sec

Q3FY17 performance of incumbent telcos stands to be severely impacted by demonetisation and Reliance Jio’s (RJio) free services. Though telcos were allowed to accept old Rs500 notes (from Nov 25 to Dec 15), we believe the revenue recognition of this would be in Q4FY17 and likely limited. RJio extended its free offer till Mar’17, which prolongs the impact on incumbent operators&rsquo

4/01/2017 12:02:42 PM | Posted in Broking Firm Views - Sector Report read full news
Consumers - Prospects Creamier & Cheesier - Emkay

* Favorable demographics are likely to induce structural tailwinds for the Indian dairy industry - a) shift from unorganized to organized market and b) upgradation to value added dairy products (VADP) from conventional product formats.

* Rising share of organized products: The organized segment is expected to grow at a CAGR of 19.5% over 2015-20, enhancing its share i

4/01/2017 11:56:49 AM | Posted in Broking Firm Views - Sector Report read full news
Logistics Shares In Focus, Gati, Snowman Up 6 Per Cent - Dynamic Levels

Shares of logistics companies were in focus and trading higher by up to 7 per cent on the NSE in early morning trade in an otherwise weak market ahead of the GST Council meet today. Gati share price, Patel Integrated share price, Snowman Logistics share price, TCI share price, Allcargo share price, Sical Logistics share price, Gateway Distriparks share price and VRL Logistics share price were s

3/01/2017 2:58:16 PM | Posted in Broking Firm Views - Sector Report read full news
Metallica - Metal Price move slowing down!! - Emkay

Key observations

* While, non-ferrous metals witnessed price corrections on an average in the month of December’16, steel price increased moderately by 2.6% holding to the current price level of US$495/tn. Steel raw material prices fell down sharply.

* Hard coking coal fell down sharply by 27% on a MoM basis to settle at US$226/tn. Iron

3/01/2017 11:50:58 AM | Posted in Broking Firm Views - Sector Report read full news
IT Services - All eyes on CY17 budgeting trends - Emkay

* We expect modest revenue growth for our Tier I coverage in a seasonally weak quarter with sequential cross currency headwinds marring the reported revenue performance further. HCL Tech and TechM will lead on sequential revenue growth amongst Tier I’s

* Persistent expected to have a strong sequential revenue growth amongst Tier II techs supported by seasonal strength in IBM bus

3/01/2017 11:40:56 AM | Posted in Broking Firm Views - Sector Report read full news
Metallix: India Metals Tracker - Price hikes imminent; China-led headwinds ahead - RCML

Global steel prices, despite soft demand, held up in 2016 owing to a weaker Yuan, trade barriers and cost-push factors. For 2017, the onus of driving incremental steel demand would be on the US, India and Japan, given the likely lower demand from China. Back home, imminent price hikes would protect margins and also give iron-ore miners leeway to increase prices. Overall, China-led headwinds and

3/01/2017 11:34:44 AM | Posted in Broking Firm Views - Sector Report read full news
Nifty PSU Bank has immediate support placed at 2840 levels - GEPL

NIFTY PSU BANK   Current Close: 2982.00    Trend : Negative

Observation

* NIFTY PSU BANK is the only sectoral index which has closed in a negative territory, down by 0.31% at 2982.00, as against an up move of 2.51% in benchmark NIFTY 50.

* The Sector had made a recent swing high @ 3503.90 a few weeks

3/01/2017 10:59:42 AM | Posted in Broking Firm Views - Sector Report read full news
Nifty FMCG holds Bullish momentum - GEPL

NIFTY FMCG   Current Close: 20754.10    Trend : Positive

Observation

* NIFTY FMCG is the most outperforming sectoral index, as it has closed up sharply by around 5.93% at 20754.10, as against an up move of 2.51% in benchmark NIFTY 50.

* In the month of Sept. 2016, the Sector created an All Time High

3/01/2017 10:53:48 AM | Posted in Broking Firm Views - Sector Report read full news
India Financials: Credit Tracker - Slowdown across industries; services relatively better - RCML

Industrial credit slowed across sub-sectors in Nov’16, with loans to micro, small and medium enterprises reporting the biggest decline. Services grew at a slower pace MoM but performed relatively better than industries. We believe the ill effects of demonetisation on consumer durable, vehicle and home loans will be felt in Q4FY17, which is likely to put pressure on overall credit. Ex-reta

2/01/2017 2:33:32 PM | Posted in Broking Firm Views - Sector Report read full news
India Financials - Demonetisation hits all segments of credit - Prabhudas

RBI’s monthly sectoral credit deployment data for Nov’16 continues to show weak credit offtake further propelled by demonetisation. Non‐food credit growth came off to 4.8% YoY/‐1.6% QoQ (also growth has higher impact because data reported is for 25days compared to 30days of previous year). Growth has come‐off from all segments with industry continuing to remain weak, while ser

2/01/2017 2:29:14 PM | Posted in Broking Firm Views - Sector Report read full news
India IT Services - Q3 Preview: Soft quarter, outlook remains the key - RCML

Q3 is seasonally weak due to the holiday season and furloughs, and we expect a muted quarter for our IT universe. Large-caps are likely to report tepid USD revenue growth of -0.4% to +2% QoQ. Mid-caps too could see a weaker quarter than the commentary given post-Q2. While growth expectations from the sector have been reset down to an extent, a revenueled upgrade cycle must fire up for any P/E r

2/01/2017 11:45:00 AM | Posted in Broking Firm Views - Sector Report read full news
Agri Input & Chemicals - Agri Digest – Sowing progressing well but lower pest attacks a concern - Emkay

* Despite the demonetization of Rs500/1000 currency notes by the government causing an intermediate cash crunch among farmers, the Rabi sowing this season has been proceeding unabated (as of 23rd December 2016). Rabi acreage so far is 6% higher than at this point last year and is 102% of normal sowing area.

* Adequate availability of ground water and high moisture content with overall

31/12/2016 1:59:50 PM | Posted in Broking Firm Views - Sector Report read full news