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Conference Materials – RBS India Access takeaways
RBS held its inaugural India Access conference in Mumbai last week, showcasing 14 companies
across different sectors. Among these, we highlight Infosys, Mahindra & Mahindra and IDFC as
our analysts' top picks.
Table 1 : RBS India Access participating companies
Sector Company
Energy Bharat Petroleum Corporation, Cairn India, Hindustan Petroleum Corporation
Materials Grasim Industries, Tata Steel, UltraTech Cement
Consumer Discretionary Mahindra & Mahindra, Maruti Suzuki India
Financials HDFC Life, IDBI Bank, Infrastructure Development Finance Company, Rural
Electrification Corporation
Technology HCL Infosystems, Infosys Technologies
Source: RBS; Note: HDFC Life is not listed
RBS’s inaugural India Access conference was held in Mumbai on 4 March 2011
RBS hosted senior management from 14 companies across different sectors for one-on-one and
group meetings with institutional equity clients. Eleven of these 14 companies were represented
by their CEOs or CFOs. This was the first India investor conference post the presentation of the
Union Budget on 28 February 2011. In this report, we summarise our analysts’ key takeaways
from these meetings and the FY12 Union Budget.
Rural consumption is increasing in importance
Maruti now generates 20% of its auto volumes from rural/semi-urban areas, up from only 4% in
FY08. Media reports suggest a normal monsoon for 2011 – this should be a positive for rural
demand and benefit stocks like Mahindra & Mahindra, where more than 60% of automotive
volumes are rural. In addition, the recent 19-30% hike in NREGA (National Rural Employment
Guarantee Act) daily wages should bolster rural consumption.
RBS India Access top picks: Infosys, Mahindra & Mahindra and IDFC
Infosys (Sandeep Shah’s top pick in the tech sector) suggested that discretionary spending is
picking up across sectors, and its volume growth in FY12 should exceed NASSCOM’s forecast
industry growth of 16-18%. Mahindra & Mahindra (Pramod Amthe’s top pick in autos) expects
tractor volumes to grow 11% in FY12 because of a normal monsoon, and it expects increased
farm mechanisation due to rising rural wages. IDFC (Jatinder Agarwal’s top pick in non-bank
financials) is targeting 28-30% loan growth over FY12-14F, but it expects lending spreads to
remain under pressure in the near term.
Other key takeaways: refining IPOs and cement overcapacity
Two refinery IPOs seem to be in the pipeline with the Bina refinery (BPCL’s joint venture with
Oman Oil) scheduled to start commercial production at end March/April 2011, and the Bhatinda
refinery (HPCL’s joint venture with Mittal Energy) scheduled to start commercial production by
September 2011. UltraTech Cement expects over-supply conditions to persist for the next two
years in the Indian cement industry, with the industry operating at a capacity utilisation of 73-79%
over the next two years.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Conference Materials – RBS India Access takeaways
RBS held its inaugural India Access conference in Mumbai last week, showcasing 14 companies
across different sectors. Among these, we highlight Infosys, Mahindra & Mahindra and IDFC as
our analysts' top picks.
Table 1 : RBS India Access participating companies
Sector Company
Energy Bharat Petroleum Corporation, Cairn India, Hindustan Petroleum Corporation
Materials Grasim Industries, Tata Steel, UltraTech Cement
Consumer Discretionary Mahindra & Mahindra, Maruti Suzuki India
Financials HDFC Life, IDBI Bank, Infrastructure Development Finance Company, Rural
Electrification Corporation
Technology HCL Infosystems, Infosys Technologies
Source: RBS; Note: HDFC Life is not listed
RBS’s inaugural India Access conference was held in Mumbai on 4 March 2011
RBS hosted senior management from 14 companies across different sectors for one-on-one and
group meetings with institutional equity clients. Eleven of these 14 companies were represented
by their CEOs or CFOs. This was the first India investor conference post the presentation of the
Union Budget on 28 February 2011. In this report, we summarise our analysts’ key takeaways
from these meetings and the FY12 Union Budget.
Rural consumption is increasing in importance
Maruti now generates 20% of its auto volumes from rural/semi-urban areas, up from only 4% in
FY08. Media reports suggest a normal monsoon for 2011 – this should be a positive for rural
demand and benefit stocks like Mahindra & Mahindra, where more than 60% of automotive
volumes are rural. In addition, the recent 19-30% hike in NREGA (National Rural Employment
Guarantee Act) daily wages should bolster rural consumption.
RBS India Access top picks: Infosys, Mahindra & Mahindra and IDFC
Infosys (Sandeep Shah’s top pick in the tech sector) suggested that discretionary spending is
picking up across sectors, and its volume growth in FY12 should exceed NASSCOM’s forecast
industry growth of 16-18%. Mahindra & Mahindra (Pramod Amthe’s top pick in autos) expects
tractor volumes to grow 11% in FY12 because of a normal monsoon, and it expects increased
farm mechanisation due to rising rural wages. IDFC (Jatinder Agarwal’s top pick in non-bank
financials) is targeting 28-30% loan growth over FY12-14F, but it expects lending spreads to
remain under pressure in the near term.
Other key takeaways: refining IPOs and cement overcapacity
Two refinery IPOs seem to be in the pipeline with the Bina refinery (BPCL’s joint venture with
Oman Oil) scheduled to start commercial production at end March/April 2011, and the Bhatinda
refinery (HPCL’s joint venture with Mittal Energy) scheduled to start commercial production by
September 2011. UltraTech Cement expects over-supply conditions to persist for the next two
years in the Indian cement industry, with the industry operating at a capacity utilisation of 73-79%
over the next two years.
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