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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We recently hosted senior management teams from Indian companies
representing diverse economic segments including consumption, capital
goods and finance. In this report we highlight key takeaways from these
meetings and our top SMID ideas.
Managements are cognizant of slowing growth: DBCL is seeing
slowing advertising spending, notably from autos, real estate and
lifestyle-related segments, although FMCG players are increasing print
advertising for high-end products. HNGI, which supplies glass
containers to major liquor and F&B players, noted that volume growth
remained steady. HAVL is seeing a slowing demand for durables, but its
new products should help it maintain 15%-18% growth. OPTC noted that
hospitals in the US/EU are not yet cutting spending on vital equipment,
but are prepared for any potential pressure. Manappuram was the notable
exception, which is looking to revise loan growth targets upwards.
Capex plans intact, barring some delays: None of the presenting
companies have curtailed capex plans. BILT’s pulp expansion is on
track, HNGI is expanding capacity for glass as per schedule and DBCL
is committed to rolling out 8-9 editions in Maharashtra. Manappuram is
looking to revise its branch opening target upwards. Essar Port’s
expansion plans are delayed pending environmental clearances. Phoenix
Mills is revisiting entry into the hospitality segment, converting capexheavy
hotel projects into cash-generating mixed-use projects.
Commodity price correction a mixed bag: HAVL noted that the
correction in copper and aluminum should aid margins with a lag, while
DBCL should benefit from lower newsprint prices. BILT has seen some
correction in paper realizations, partially mitigated by pulp price
correction. Welspun noted that customers are delaying orders in the
expectation of a steel price correction.
Recent sharp FX moves highlighted: HAVL expects MTM losses on
account of the strengthening of US$ vs the Rupee and euro. It has also
raised prices in Brazil and EU to mitigate the adverse impact of US$-
denominated outsourced product imports. OPTC’s 40% debt is US$-
denominated, but it has a natural hedge on account of US$ revenues.
Welspun has US$-denominated debt of US$300MM, which could lead to
MTM losses in 2Q, while 70% of its US$-denominated revenues is
naturally hedged on account of imported raw materials.
High-conviction ideas: Our high-conviction SMID ideas include
HAVL, BILT, and DFPC, which have a market leadership position, have
demonstrated strong pricing power, and should benefit from lower
commodity prices.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We recently hosted senior management teams from Indian companies
representing diverse economic segments including consumption, capital
goods and finance. In this report we highlight key takeaways from these
meetings and our top SMID ideas.
Managements are cognizant of slowing growth: DBCL is seeing
slowing advertising spending, notably from autos, real estate and
lifestyle-related segments, although FMCG players are increasing print
advertising for high-end products. HNGI, which supplies glass
containers to major liquor and F&B players, noted that volume growth
remained steady. HAVL is seeing a slowing demand for durables, but its
new products should help it maintain 15%-18% growth. OPTC noted that
hospitals in the US/EU are not yet cutting spending on vital equipment,
but are prepared for any potential pressure. Manappuram was the notable
exception, which is looking to revise loan growth targets upwards.
Capex plans intact, barring some delays: None of the presenting
companies have curtailed capex plans. BILT’s pulp expansion is on
track, HNGI is expanding capacity for glass as per schedule and DBCL
is committed to rolling out 8-9 editions in Maharashtra. Manappuram is
looking to revise its branch opening target upwards. Essar Port’s
expansion plans are delayed pending environmental clearances. Phoenix
Mills is revisiting entry into the hospitality segment, converting capexheavy
hotel projects into cash-generating mixed-use projects.
Commodity price correction a mixed bag: HAVL noted that the
correction in copper and aluminum should aid margins with a lag, while
DBCL should benefit from lower newsprint prices. BILT has seen some
correction in paper realizations, partially mitigated by pulp price
correction. Welspun noted that customers are delaying orders in the
expectation of a steel price correction.
Recent sharp FX moves highlighted: HAVL expects MTM losses on
account of the strengthening of US$ vs the Rupee and euro. It has also
raised prices in Brazil and EU to mitigate the adverse impact of US$-
denominated outsourced product imports. OPTC’s 40% debt is US$-
denominated, but it has a natural hedge on account of US$ revenues.
Welspun has US$-denominated debt of US$300MM, which could lead to
MTM losses in 2Q, while 70% of its US$-denominated revenues is
naturally hedged on account of imported raw materials.
High-conviction ideas: Our high-conviction SMID ideas include
HAVL, BILT, and DFPC, which have a market leadership position, have
demonstrated strong pricing power, and should benefit from lower
commodity prices.
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