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India Equity Research Reports, IPO and Stock News
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India Oil Downstream: Are worries on the high oil price overdone? [Harshad
Katkar]
Oil marketing company (OMC) stocks have corrected by 23-32% in the last three
months following the Brent price crossing the psychological barrier of US$100/bbl.
The high oil price induced a 42% yoy rise in gross under-recoveries (at INR982bn
in FY12) that is likely to adversely affect OMCs. However, after the 28% fall in
IOC's stock price from its Sep 2010 peak, it trades at 1.2x FY12E P/BV (near its
0.8x five-year low), more than discounting the potential downside on higher underrecoveries. We upgrade IOC to Hold but retain Sell on BPCL and HPCL.
Bharti Airtel Limited: 3QFY11 – Stability in India, steady progress in Africa
[Srinivas Rao]
Bharti’s operating results are in line with our estimates and reflect the reduction of
competitive intensity in India and an improving business trajectory in Africa. For
the Indian wireless business, we highlight a flat trend in revenue per minute
(Rs0.44), 30% yoy growth in traffic and a stable EBITDA margin (35%). For its
African operations, Bharti reported 16.6% qoq revenue growth and a 100bps qoq
increase in the margin to 25%. We maintain our Buy rating and Rs460 target price.
Hero Honda Ltd: 3QFY11: Weak results [Srinivas Rao]
Hero Honda's 3QFY11 results were weaker than expected and came below our
and consensus estimates on account of higher than expected other expenses.
EBITDA at Rs 5.8bn was 14% below our estimates. EBITDA margin at 11.2%
(-20bps QoQ, DBest at 13.1%) was at the lowest level in the past three years.
Consequently, EBITDA/bike fell 15% QoQ to Rs 4,037 /bike (DBest Rs 4,675).
Asia Credit Weekly: Paving for a better tone [Gene Cheon]
A handful of potential new issues were reported throughout the week. Bank of
India announced its plans to meet credit investors starting next week, ahead of a
possible dollar bond sale. Bank of Baroda's Chairman/MD was quoted in the news
regarding their plans to raise $500mn by selling bonds.
Asia Local Markets Weekly: Strong Q4 growth adds to inflationary pressures
[Smaeer Goel]
Data suggests that along with better than anticipated 4Q growth outturn, inflation
risks have also accentuated, thereby increasing the urgency for monetary policy
response in certain countries. We expect BI to raise rates this Friday. *FX: We
think the strong growth momentum in the US should continue to drive the
divergence in FX performance between the lower yielders and higher yielders. For
the higher yielders IDR and INR, a shift in the central bank's policy stance and a
sustained improvement in the BoP respectively, are key to a shift in sentiments.
US Daily Economic Notes: The need to raise rates and the timeline of Fed
exit strategy [Joseph LaVorgna]
By the end of June, when QE2 has run its course, the Fed’s balance sheet will
total almost $3 trillion, nearly three times its size prior to the Lehman bankruptcy.
Moreover, real interest rates, measured as the difference between the level of the
fed funds rate and the year-over-year growth rate in the core CPI, will have been
negative for 38 consecutive months. This matches the length of time that real
rates were negative in the 2001 to 2004 period.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Oil Downstream: Are worries on the high oil price overdone? [Harshad
Katkar]
Oil marketing company (OMC) stocks have corrected by 23-32% in the last three
months following the Brent price crossing the psychological barrier of US$100/bbl.
The high oil price induced a 42% yoy rise in gross under-recoveries (at INR982bn
in FY12) that is likely to adversely affect OMCs. However, after the 28% fall in
IOC's stock price from its Sep 2010 peak, it trades at 1.2x FY12E P/BV (near its
0.8x five-year low), more than discounting the potential downside on higher underrecoveries. We upgrade IOC to Hold but retain Sell on BPCL and HPCL.
Bharti Airtel Limited: 3QFY11 – Stability in India, steady progress in Africa
[Srinivas Rao]
Bharti’s operating results are in line with our estimates and reflect the reduction of
competitive intensity in India and an improving business trajectory in Africa. For
the Indian wireless business, we highlight a flat trend in revenue per minute
(Rs0.44), 30% yoy growth in traffic and a stable EBITDA margin (35%). For its
African operations, Bharti reported 16.6% qoq revenue growth and a 100bps qoq
increase in the margin to 25%. We maintain our Buy rating and Rs460 target price.
Hero Honda Ltd: 3QFY11: Weak results [Srinivas Rao]
Hero Honda's 3QFY11 results were weaker than expected and came below our
and consensus estimates on account of higher than expected other expenses.
EBITDA at Rs 5.8bn was 14% below our estimates. EBITDA margin at 11.2%
(-20bps QoQ, DBest at 13.1%) was at the lowest level in the past three years.
Consequently, EBITDA/bike fell 15% QoQ to Rs 4,037 /bike (DBest Rs 4,675).
Asia Credit Weekly: Paving for a better tone [Gene Cheon]
A handful of potential new issues were reported throughout the week. Bank of
India announced its plans to meet credit investors starting next week, ahead of a
possible dollar bond sale. Bank of Baroda's Chairman/MD was quoted in the news
regarding their plans to raise $500mn by selling bonds.
Asia Local Markets Weekly: Strong Q4 growth adds to inflationary pressures
[Smaeer Goel]
Data suggests that along with better than anticipated 4Q growth outturn, inflation
risks have also accentuated, thereby increasing the urgency for monetary policy
response in certain countries. We expect BI to raise rates this Friday. *FX: We
think the strong growth momentum in the US should continue to drive the
divergence in FX performance between the lower yielders and higher yielders. For
the higher yielders IDR and INR, a shift in the central bank's policy stance and a
sustained improvement in the BoP respectively, are key to a shift in sentiments.
US Daily Economic Notes: The need to raise rates and the timeline of Fed
exit strategy [Joseph LaVorgna]
By the end of June, when QE2 has run its course, the Fed’s balance sheet will
total almost $3 trillion, nearly three times its size prior to the Lehman bankruptcy.
Moreover, real interest rates, measured as the difference between the level of the
fed funds rate and the year-over-year growth rate in the core CPI, will have been
negative for 38 consecutive months. This matches the length of time that real
rates were negative in the 2001 to 2004 period.
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