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India Equity Research Reports, IPO and Stock News
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Reliance Industries: E&P concerns priced in, reiterate Buy [Harshad Katkar]
RIL has fallen by 10% over the last one week. The stock has underperformed BSE
Sensex by 14% over the last 3m predominantly on account of negative newsflow
on its E&P segment. RIL has also underperformed against regional refining and
petrochemical stocks. RIL is trading at 6.7x FY12e EV/EBITDA which is at the
bottom end of its last five years' trading range of 7x–24x. RIL is trading at a
discount to its regional refining peers despite being a more complex refinery. In
our opinion, considering the rising Light-Heavy crude differentials and high
complexity of RIL's refinery, RIL should trade at a premium to regional peers. RIL
is also trading at a 10% discount to its regional petrochemical peers.
Larsen & Toubro Ltd: Middle-east capex could be a differentiating factor for
L&T [Manish Saxena]
Over the last two days, L&T has announced order wins of INR 55bn, which is a
clear positive, particularly at a time when we see a slowdown in execution and
construction. Looking at the series of order inflows, approx - INR 21bn has come
from real estate, INR 13bn Bangalore airport expansion order and INR 14bn from
Middle-east (ME). These series of orders are largely in line with the pipeline of
orders assumed by us and also in line with the guidance given by management at
the time of annual results.
India Insight: Re-ranking the Macro Risk Parameters [Taimur Baig]
We believe that the Indian economy’s cyclical drivers and challenges have evolved
in the last couple of months, necessitating a revision to our ranking of underlying
risks. In this short note, we examine five key parameters of the economy and
explain why we are considering re-ranking them. 1) Fiscal: Our forecast of 5.1% of
GDP central government deficit in FY11/12 (budget forecast is 4.6%) is now
subject to further upside risks, as revenue growth has slowed and subsidy
spending pressure has ballooned. We are also worried about the financing picture,
as INR400bn in disinvestment proceeds could be very difficult to achieve.
Asia Economics Special: India: Coping with headwinds – policy meeting
takeaways [Taimur Baig]
We summarize the findings from our meetings over the past week with senior
policy makers in the Ministry of Finance and the Reserve Bank of India: Ministry of
Finance * In Delhi, the government's focus now is almost entirely on governance
issues and a forthcoming cabinet reshuffle. Reforms through the legislative
channel have become very challenging. * Expectations of controlling subsidy
spending and raising substantial disinvestment revenues have been scaled back. *
Some diesel and kerosene price increase appears to be just a matter of time,
although the magnitude would not be sufficient to mitigate fully the subsidy risk.
US Daily Economic Notes: Fed to sound a somewhat more somber tone
[Joseph LaVorgna]
With the groundwork for the eventual Fed exit strategy largely established at the
prior FOMC meeting, the analysis of today’s statement will focus more squarely
on policymakers’ assessment of the economic situation. The April FOMC
statement showed a very modest forecast evolution from that of the prior
meeting, but we suspect the recent soft patch in the economic data will lead to a
more noticeable downgrade of the Committee’s latest economic assessment.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Reliance Industries: E&P concerns priced in, reiterate Buy [Harshad Katkar]
RIL has fallen by 10% over the last one week. The stock has underperformed BSE
Sensex by 14% over the last 3m predominantly on account of negative newsflow
on its E&P segment. RIL has also underperformed against regional refining and
petrochemical stocks. RIL is trading at 6.7x FY12e EV/EBITDA which is at the
bottom end of its last five years' trading range of 7x–24x. RIL is trading at a
discount to its regional refining peers despite being a more complex refinery. In
our opinion, considering the rising Light-Heavy crude differentials and high
complexity of RIL's refinery, RIL should trade at a premium to regional peers. RIL
is also trading at a 10% discount to its regional petrochemical peers.
Larsen & Toubro Ltd: Middle-east capex could be a differentiating factor for
L&T [Manish Saxena]
Over the last two days, L&T has announced order wins of INR 55bn, which is a
clear positive, particularly at a time when we see a slowdown in execution and
construction. Looking at the series of order inflows, approx - INR 21bn has come
from real estate, INR 13bn Bangalore airport expansion order and INR 14bn from
Middle-east (ME). These series of orders are largely in line with the pipeline of
orders assumed by us and also in line with the guidance given by management at
the time of annual results.
India Insight: Re-ranking the Macro Risk Parameters [Taimur Baig]
We believe that the Indian economy’s cyclical drivers and challenges have evolved
in the last couple of months, necessitating a revision to our ranking of underlying
risks. In this short note, we examine five key parameters of the economy and
explain why we are considering re-ranking them. 1) Fiscal: Our forecast of 5.1% of
GDP central government deficit in FY11/12 (budget forecast is 4.6%) is now
subject to further upside risks, as revenue growth has slowed and subsidy
spending pressure has ballooned. We are also worried about the financing picture,
as INR400bn in disinvestment proceeds could be very difficult to achieve.
Asia Economics Special: India: Coping with headwinds – policy meeting
takeaways [Taimur Baig]
We summarize the findings from our meetings over the past week with senior
policy makers in the Ministry of Finance and the Reserve Bank of India: Ministry of
Finance * In Delhi, the government's focus now is almost entirely on governance
issues and a forthcoming cabinet reshuffle. Reforms through the legislative
channel have become very challenging. * Expectations of controlling subsidy
spending and raising substantial disinvestment revenues have been scaled back. *
Some diesel and kerosene price increase appears to be just a matter of time,
although the magnitude would not be sufficient to mitigate fully the subsidy risk.
US Daily Economic Notes: Fed to sound a somewhat more somber tone
[Joseph LaVorgna]
With the groundwork for the eventual Fed exit strategy largely established at the
prior FOMC meeting, the analysis of today’s statement will focus more squarely
on policymakers’ assessment of the economic situation. The April FOMC
statement showed a very modest forecast evolution from that of the prior
meeting, but we suspect the recent soft patch in the economic data will lead to a
more noticeable downgrade of the Committee’s latest economic assessment.
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