Banking Sector Update Gap between assets and liabilities at the lowest point in the past decade - Kotak Sec

One more risk fading away.

In FY2017 the gap between retirement assets and liabilities were at the lowest point in the past decade for public banks. Retirement costs contribute ~20% to overall staff costs. The sharp decline in interest rates only increased the present value of future liabilities by 12% yoy; employee payouts declining yoy, the decline

19/07/2017 1:36:38 PM | Posted in Broking Firm Views - Sector Report read full news
Capital Goods Sector Update Compelling growth story; technology leaders to gain foothold - ICICI Sec

Compelling growth story; technology leaders to gain foothold 

Reason for report: Sector initiation

Given the low penetration, increasing affordability and better availability of electricity, we believe the domestic room AC market is poised to witness secular growth over the next five years. Relatively higher energy consu

19/07/2017 1:31:33 PM | Posted in Broking Firm Views - Sector Report read full news
NIFTY ENERGY holds strong Bullish momentum - GEPL

Observation

* NIFTY ENERGY is one of the best performing sectors amongst all the indices last week. It showed a good up move of 3.22%, as against an up move of 2.28% in benchmark NIFTY 50.

* The Sector is in Bullish Trend in all time frames, with the formation of Higher Top Higher Bottom sequences in Daily, Weekly as well as Monthly, as can b

18/07/2017 3:45:51 PM | Posted in Broking Firm Views - Sector Report read full news
Banking Sector Update Where is capital consumption in public banks - Kotak Sec

Where is capital consumption in public banks?

Overall tier-1 ratio improved by ~30bps yoy to 9.7% but core tier-1 ratio was broadly flat yoy at 8.8% of loans. Interestingly, despite NPLs increasing 55% since FY2015, RWA growth was muted at 2%. Public banks received a capital infusion of US$~4bn in FY2017 mostly from the Government. They need ~US$ 7bn t

18/07/2017 3:33:24 PM | Posted in Broking Firm Views - Sector Report read full news
Oil and Gas Sector update Petroleum consumption grows 0.4% in June after growing 3-5% in April and May - Kotak Sec

Slow and unsteady.

Petroleum consumption grew modestly by 0.4% yoy in June despite 6.5-12% growth in diesel and gasoline from a lower base, reflecting decline in off-take of industrial fuels, presumably impacted before the implementation of GST. 1QFY18 growth at 3% was better than 3% decline post-demonetization in 4QFY17; however, it still remains sub

18/07/2017 11:26:29 AM | Posted in Broking Firm Views - Sector Report read full news
Metals and Mining Sector Update 1QFY18 - a tad weak due to lower prices, one-offs - Kotak Sec

1QFY18—a tad weak due to lower prices, one-offs.

Domestic metal names will report sequential decline in earnings led by lower prices, increased input costs and lower volumes (a few cases of outages). We expect earnings of steel companies to decline sequentially due to lower steel realization (-3-4% qoq) and use of high cost coal inventory. Earnin

18/07/2017 10:23:11 AM | Posted in Broking Firm Views - Sector Report read full news
Banking and NBFC Sector Update IDFC-Shriram merger: An uphill task - Emkay

IDFC-Shriram merger: An uphill task

Last week, the IDFC and Shriram groups’ management announced their intent to merge the two groups to create a large financial services conglomerate. While both the groups have complementarity in terms of the current nature of their businesses, we observe that the proposed merger scheme is highly complex and gai

18/07/2017 9:42:26 AM | Posted in Broking Firm Views - Sector Report read full news
Real Estate Sector Update - Equirus Sec

Co-working space leasing in India to touch 10 million sq ft by 2020: CBRE

Co-Working space leasing in India is expected to touch 10 million after by 2020 with the concept of shared office space fast catching up in India. According to CBRE, demand more than tripled in 2016 to touch 0.7 million sq. ft. as compared to 2014. Further this year the leasing i

17/07/2017 5:06:10 PM | Posted in Broking Firm Views - Sector Report read full news
Power and Capital Goods Sector Update Regulated Entities to Deliver Better Show - Reliance Sec

Regulated Entities to Deliver Better Show; Higher Fuel Cost to Affect Private Players

During 1QFY18, all-India power demand increased by 3.74% YoY to 307bn units compared to 296bn units in 1QFY17 led by 17.5% rise in hydro generation. Coal-based generation grew at a slower pace of 2.2% YoY, while nuclear generation remained flat. All-India PLF of the t

17/07/2017 4:48:03 PM | Posted in Broking Firm Views - Sector Report read full news
Fertilizer Sector Update Q1FY18: Strong performance on low base - ICICI Sec

Q1FY18: Strong performance on low base

Fertiliser sector companies in our coverage are likely to witness ~44% YoY jump in profitability in Q1FY18. However, large part of this increase will likely be driven by non-fertiliser businesses and low comparison base in fertiliser businesses of some companies. While Coromandel International (CRIN) is likely to

17/07/2017 1:32:37 PM | Posted in Broking Firm Views - Sector Report read full news
Aviation Sector Update Summer full of promise - ICICI Sec

Summer full of promise

Reason for report: Quarterly results preview

Q1FY18 is expected to be a strong quarter for Indian airlines. Sequentially, ATF prices were down by 5%, Rupee was stronger by 4% and Q1 is a seasonally strong quarter. These tailwinds should create a solid base for Q1 earnings. Our ground checks indicate imp

17/07/2017 12:19:39 PM | Posted in Broking Firm Views - Sector Report read full news
Pharma Sector Update Q1FY18 result preview - ICICI Sec

Q1FY18 result preview

We expect healthcare companies under our coverage to report weak set of results for the quarter ended Jun'17, mainly because we see most companies witnessing ~10% decline in revenue from domestic formulations which got impacted by GST implementation. Inventory de-stocking would have impacted primary sales for 20- 25 days durin

17/07/2017 12:13:34 PM | Posted in Broking Firm Views - Sector Report read full news
Paint Sector Update De-stocking ahead of GST impacts volume growth - ICICI Sec

De-stocking ahead of GST impacts volume growth

Reason for report: Q1FY18 results preview

Our recent channel checks suggest paint companies in our coverage universe witnessed healthy double-digit decorative paints volume growth in Apr’17 and May’17. This is mainly attributable to increased dealer incentive schemes

17/07/2017 12:01:22 PM | Posted in Broking Firm Views - Sector Report read full news
Power and Mining Sector Update PGCIL strong show to continue; JSW and CIL to report weak numbers - ICICI Sec

Q1FY18: PGCIL strong show to continue; JSW and CIL to report weak numbers

Reason for report: Q1FY18 earnings preview

Power Grid’s (PGCIL) secular earnings growth is likely to continue in the quarter ended Jun’17 as well. PGCIL remains our top pick in the sector given its strong asset pipeline, which will continue

17/07/2017 11:32:34 AM | Posted in Broking Firm Views - Sector Report read full news
FMCG Sector Update Key Takeaways from FMCG companies Annual Reports - Emkay

Key Takeaways from FMCG companies’ Annual Reports

We have gone through 7 annual reports of Consumer Staples companies to get some insights into strategy, outlook for the sector and their respective business segments.

* In FY17, rural demand was sluggish in the early part of the year. Consumption started to witness some

15/07/2017 1:43:02 PM | Posted in Broking Firm Views - Sector Report read full news
Telecom Sector Industry active subscriber addition recovers led by RJio - Motilal Oswal

Industry active subscriber addition recovers led by RJio

remains the only other strong contender The Telecom Regulatory Authority of India (TRAI) has released the monthly subscriber data for the month of May 2017. Active (VLR) subscribers in the industry increased by 4.6m to reach 1,020m in May, after declining by 1.5m in the previous month due to the commencement of RJio’s paid

14/07/2017 4:03:56 PM | Posted in Broking Firm Views - Sector Report read full news
IT Sector Update June`17 quarter preview: INR appreciation adding insult to injury - Emkay

June’17 quarter preview: INR appreciation adding insult to injury

* We expect 1.5-2.5% QoQ revenue growth in constant currency terms in Jun’17 quarter for Tier I IT services players with Wipro being the only exception (de-growth of about 1%).

* Sharp INR appreciation against US$ of about 3% QoQ would impact the reported INR perfor

13/07/2017 5:05:23 PM | Posted in Broking Firm Views - Sector Report read full news
Cement Sector Update Price increases to offset cost escalations - ICICI Sec

Price increases to offset cost escalations

Cement companies under our coverage are likely to report ~6% YoY (~20% QoQ) EBITDA growth during Q1FY18 led by 4.6% YoY volume growth. We estimate industry volumes to be up ~1% YoY as strong demand growth in East region is expected to be offset by volume declines in South and Central regions. Average pan India

12/07/2017 3:40:45 PM | Posted in Broking Firm Views - Sector Report read full news
FMCG Sector Update Subdued Performance on the Cards - Reliance Se

Subdued Performance on the Cards 

We expect implementation of GST to have an adverse impact on performance of consumer companies in 1QFY18. Lack of clarity over input tax credit on old stocks resulted in trade de-stocking its inventory in June before the GST rollout, which impacted the primary sales of most consumer companies. We expect the situat

12/07/2017 3:36:52 PM | Posted in Broking Firm Views - Sector Report read full news
IT Sector Update Currency Fluctuations to Add to the Woes - Reliance Se

Currency Fluctuations to Add to the Woes

Sector Preview

We expect the IT firms under our coverage universe to post a combined 2.2% QoQ rise in USD revenue in 1QFY18. We expect the Top-5 IT firms to post 0-3% QoQ USD revenue growth in reported terms (0-2% in CC terms), with Tech Mahindra (TechM)and HCL Tech (HCLT) to lead the

12/07/2017 3:20:06 PM | Posted in Broking Firm Views - Sector Report read full news
Banking Sector Update Challenging Quarter in the Offing - Reliance Se

Challenging Quarter in the Offing

The performance of Banking, Financial Service & Industry (BFSI) is likely to remain under pressure owing to slower momentum in NII growth and higher credit cost. We expect the banks having significant exposure to corporate term loan to report sequential rise in slippages and higher provisioning expenses. The Reserv

12/07/2017 3:14:32 PM | Posted in Broking Firm Views - Sector Report read full news
Entertainment Sector Update Bad quarter; GST impacts ad revenue growth - ICICI Sec

Bad quarter; GST impacts ad revenue growth

Reason for report: Q1FY18 results preview

We expect I-Sec media universe to register a weak quarter as adspends were postponed owing to pre-GST destocking across industries. We forecast Q1FY18 ad revenue growth of 2.0% YoY for the media companies under our coverage and expect things

12/07/2017 2:41:07 PM | Posted in Broking Firm Views - Sector Report read full news
Metal Sector Update Chinese illegal capacity - new twist? - ICICI Sec

Chinese illegal capacity – new twist?

Reason for report: Aluminium sector update

Post our call with AZ China, the client reactions and news flows on Chinese aluminium cuts have been diverse. Since then, the various industry consultants that we have interacted have been sceptical about the strength of the “illegal

12/07/2017 10:01:24 AM | Posted in Broking Firm Views - Sector Report read full news