Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IF 2011 – What to look for?
IF 2011 will see a large contingent of 17 Indian corporates, representing
US$325bn in market cap. The Indian market has underperformed peers
YTD due to concerns on the investment slowdown and the messy political
scenario. Consumption has, for most part, remained strong, but are
surprises around the corner? The longer-term story for the domesticdriven
India market remains strong and the insights from meetings will
help discern winners and losers.
Consumption growth is unaffected, for now
Despite the inflationary pressures, c.12%+ wage inflation has propped-up
consumption demand. Little wonder that consumption plays like Hindustan
Unilever, ITC, noted for their pricing power, have been large outperformers.
Indeed pricing power will be the key, as consumer markets will inevitably feel
the impact of a slower growth trajectory and moderation in hiring
momentum; The outperformance of the Bharti Airtel stock reflects optimism
that India's leading mobile service operator Bharti will benefit from the
cessation of price wars in the industry. As chairman of Reliance Comm, Mr
Ambani’s perspective on this issue should not be missed. An interesting
laggard in the consumption space has been United Spirits but we believe that
concerns on higher raw material prices are well priced in. Hear about
potential cost improvement measures likely playing out in 2HFY12 from the
horse’ mouth.
Investment slowdown is clearly visible
One of the key reasons for Indian markets underperformed peers over the
last 12 months has been concerns on investment slowdown. Environmental
clearances / raw material availability issues have been the primary reason.
IDFC, one of the leading infrastructure financiers has been impacted but
continues to guide for a robust 15-20% loan growth, hear them out to know
why. Project delays have impacted growth outlook for Jindal Steel & Power,
however, Tata Steel and Adani Power have seen a relatively better execution.
Adani group also operates a large port with sufficient land parcel in one of
India’s most prosperous state Gujarat and will be a beneficiary of the
proposed land acquisition bill.
Private sector banks face much less asset quality pressures
We have four among the largest private sector banks viz. ICICI Bank, HDFC
Bank, Axis Bank and Yes Bank presenting at the forum. Slowing economic
growth will likely impact credit growth and asset quality. However, we believe
that the higher CASA ratio private sector banks are much better placed to
defend margins. Also, we believe that the asset concerns not as much as that
for public sector banks.
Don’t miss the big daddies
Reliance Industries – the largest Indian corporate has been an underperformer
due to concerns on lower gas production at KG-D6 as well as regulatory
pressures. We believe that the worst now behind. DLF– the largest property
company is all set to offload certain non-core assets to make balance sheet
leaner. Tata Consultancy – the largest IT services company has now become
the margin and growth leader in the sector but currently impacted due to the
slowdown in the developed world.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IF 2011 – What to look for?
IF 2011 will see a large contingent of 17 Indian corporates, representing
US$325bn in market cap. The Indian market has underperformed peers
YTD due to concerns on the investment slowdown and the messy political
scenario. Consumption has, for most part, remained strong, but are
surprises around the corner? The longer-term story for the domesticdriven
India market remains strong and the insights from meetings will
help discern winners and losers.
Consumption growth is unaffected, for now
Despite the inflationary pressures, c.12%+ wage inflation has propped-up
consumption demand. Little wonder that consumption plays like Hindustan
Unilever, ITC, noted for their pricing power, have been large outperformers.
Indeed pricing power will be the key, as consumer markets will inevitably feel
the impact of a slower growth trajectory and moderation in hiring
momentum; The outperformance of the Bharti Airtel stock reflects optimism
that India's leading mobile service operator Bharti will benefit from the
cessation of price wars in the industry. As chairman of Reliance Comm, Mr
Ambani’s perspective on this issue should not be missed. An interesting
laggard in the consumption space has been United Spirits but we believe that
concerns on higher raw material prices are well priced in. Hear about
potential cost improvement measures likely playing out in 2HFY12 from the
horse’ mouth.
Investment slowdown is clearly visible
One of the key reasons for Indian markets underperformed peers over the
last 12 months has been concerns on investment slowdown. Environmental
clearances / raw material availability issues have been the primary reason.
IDFC, one of the leading infrastructure financiers has been impacted but
continues to guide for a robust 15-20% loan growth, hear them out to know
why. Project delays have impacted growth outlook for Jindal Steel & Power,
however, Tata Steel and Adani Power have seen a relatively better execution.
Adani group also operates a large port with sufficient land parcel in one of
India’s most prosperous state Gujarat and will be a beneficiary of the
proposed land acquisition bill.
Private sector banks face much less asset quality pressures
We have four among the largest private sector banks viz. ICICI Bank, HDFC
Bank, Axis Bank and Yes Bank presenting at the forum. Slowing economic
growth will likely impact credit growth and asset quality. However, we believe
that the higher CASA ratio private sector banks are much better placed to
defend margins. Also, we believe that the asset concerns not as much as that
for public sector banks.
Don’t miss the big daddies
Reliance Industries – the largest Indian corporate has been an underperformer
due to concerns on lower gas production at KG-D6 as well as regulatory
pressures. We believe that the worst now behind. DLF– the largest property
company is all set to offload certain non-core assets to make balance sheet
leaner. Tata Consultancy – the largest IT services company has now become
the margin and growth leader in the sector but currently impacted due to the
slowdown in the developed world.
No comments:
Post a Comment