| Category | Buy | Sell | Net | |
| Value | Value | Value | ||
| FII | 2851.06 | 2139.94 | 711.12 | |
| DII | 708.9 | 1216.72 | -507.82 | |
28 May 2013
FII & DII trading activity on NSE, BSE and MCX-SX 28-05-2013
Angel Broking - Daily Reports and Market Summary - 28.05.2013
Forwarding you the Daily Reports and Market Summary 28.05.2013. Kindly click on the following links to view the Report.
Don't fight the BoJ, or Fed/ECB:: JPMorgan
The Bank of Japan is changing capital markets. Its plan to buy 1.6 times net
issuance of JGBs is flattening yield curves. The search for yield has
significantly more fuel. Further QE is also possible from the Fed and the
ECB just cut rates. Yield search was the catalyst to upgrade Australia in
February. We should have closed all underweights in high-yield sectors
then. The action points are upgrading Singapore from UW to OW.
Most countries in Asia Pacific benefit from cheaper oil, with Thailand,
Korea and India the biggest beneficiaries. Oil imports in Thailand are 11%
of GDP. A 20% decline in oil price improves current account balance by
2.2% of GDP. Malaysia is a marginal net oil exporter and would lose out
from oil price declines. Indonesia is a refined oil importer, but an exporter
of gas, palm oil and crude (see page 5).
The concentration of dividends pushes forward levels lower, resulting in
cheaper call premiums but higher put premiums. The impact can be
magnified for short-dated options when the dividend period falls before
expiry. On page 15, we present option strategies for upcoming dividend
season in HK.
All EM ASEAN markets are outperforming Asia-ex Japan YTD, albeit to
differing degrees, ranging from 22% (Philippines) to 3% (Malaysia). From
mid-month, all ASEAN markets started to underperform the region. See
page 21for more on ASEAN strategy.
MXAPJ and MXASJ have struggled to establish clear direction YTD and we
would need a clear breakout in order to recommend broad-based positions.
Resistance zone at 480-487 and support at 460 are key levels to watch. See
page 19 for more on Asia technicals strategy.
Key asset allocation calls:
OW: Japan, Singapore, India, Thailand, Malaysia, Indonesia, the
Philippines, financials and industrials
UW: China, Korea, Taiwan, materials and energy
The key risks to our strategy are return of the high beta/low P/B rally and
improvement in Chinese economic data.
issuance of JGBs is flattening yield curves. The search for yield has
significantly more fuel. Further QE is also possible from the Fed and the
ECB just cut rates. Yield search was the catalyst to upgrade Australia in
February. We should have closed all underweights in high-yield sectors
then. The action points are upgrading Singapore from UW to OW.
Most countries in Asia Pacific benefit from cheaper oil, with Thailand,
Korea and India the biggest beneficiaries. Oil imports in Thailand are 11%
of GDP. A 20% decline in oil price improves current account balance by
2.2% of GDP. Malaysia is a marginal net oil exporter and would lose out
from oil price declines. Indonesia is a refined oil importer, but an exporter
of gas, palm oil and crude (see page 5).
The concentration of dividends pushes forward levels lower, resulting in
cheaper call premiums but higher put premiums. The impact can be
magnified for short-dated options when the dividend period falls before
expiry. On page 15, we present option strategies for upcoming dividend
season in HK.
All EM ASEAN markets are outperforming Asia-ex Japan YTD, albeit to
differing degrees, ranging from 22% (Philippines) to 3% (Malaysia). From
mid-month, all ASEAN markets started to underperform the region. See
page 21for more on ASEAN strategy.
MXAPJ and MXASJ have struggled to establish clear direction YTD and we
would need a clear breakout in order to recommend broad-based positions.
Resistance zone at 480-487 and support at 460 are key levels to watch. See
page 19 for more on Asia technicals strategy.
Key asset allocation calls:
OW: Japan, Singapore, India, Thailand, Malaysia, Indonesia, the
Philippines, financials and industrials
UW: China, Korea, Taiwan, materials and energy
The key risks to our strategy are return of the high beta/low P/B rally and
improvement in Chinese economic data.
Thermax Channel check on the captive power market ::Prabhudas Lilladher
Interaction with ISGEC: We interacted with ISGEC (formerly John Thompson),
the key competitor to Thermax (TMX) in the captive power market. Key
highlights are: 1) Good enquiry levels in plants upto 30-50MW from domestic
markets; however, enquiries for large plants are limited 2) Demand largely
coming from small industries like Food processing, Textiles, Pharma, Healthcare
etc. 3) Market for small power plants are likely to pick up significantly, given the
power shortage scene (highlighted enquiries coming from unconventional
segments like huge housing complexes) 4) Enquiry levels in export markets are
quite healthy due to a weak rupee (especially Africa) 5) Cethar vessels bidding
for very few projects in markets (augurs well for margins once the market
improves).
! TMX expects a growth in order inflow in FY14 and maintain margins in double‐
digits: TMX has been maintaining its order inflow run-rate of ~Rs12bn per
quarter for the last 3-4 quarters in this environment. Even in the current
quarter, the company is confident of maintaining a healthy order inflow runrate.
The company is quite confident of growing order inflow in FY14 by 8-10%
even on a higher base. The key sectors which the company is looking at for
order inflow includes Steel, Cement, Oil&Gas. The optimism is largely coming
from visible pipeline of orders, good enquiry levels and expectation of recovery
in the second half of FY14. The company is also looking at improved traction in
export markets like Middle East, Africa and South East Asia. While the company
acknowledges the fact that margins are under pressure due to high competition
in the market, it believes double-digit margins could be maintained due to tight
cost controls by the management and increased contribution from export
markets.
the key competitor to Thermax (TMX) in the captive power market. Key
highlights are: 1) Good enquiry levels in plants upto 30-50MW from domestic
markets; however, enquiries for large plants are limited 2) Demand largely
coming from small industries like Food processing, Textiles, Pharma, Healthcare
etc. 3) Market for small power plants are likely to pick up significantly, given the
power shortage scene (highlighted enquiries coming from unconventional
segments like huge housing complexes) 4) Enquiry levels in export markets are
quite healthy due to a weak rupee (especially Africa) 5) Cethar vessels bidding
for very few projects in markets (augurs well for margins once the market
improves).
! TMX expects a growth in order inflow in FY14 and maintain margins in double‐
digits: TMX has been maintaining its order inflow run-rate of ~Rs12bn per
quarter for the last 3-4 quarters in this environment. Even in the current
quarter, the company is confident of maintaining a healthy order inflow runrate.
The company is quite confident of growing order inflow in FY14 by 8-10%
even on a higher base. The key sectors which the company is looking at for
order inflow includes Steel, Cement, Oil&Gas. The optimism is largely coming
from visible pipeline of orders, good enquiry levels and expectation of recovery
in the second half of FY14. The company is also looking at improved traction in
export markets like Middle East, Africa and South East Asia. While the company
acknowledges the fact that margins are under pressure due to high competition
in the market, it believes double-digit margins could be maintained due to tight
cost controls by the management and increased contribution from export
markets.
Sell State Bank of India (SBI) Return Potential: (12%) Downgrade to Sell on aggressive strategy and higher stress loans :: Goldman Sachs
Source of opportunity
We downgrade SBI to Sell from Neutral as we expect stress levels to
remain elevated and find the company’s desire to grow loan book
aggressively under current adverse macro environment concerning.
Lending in 4QFY13 to mid-corporate and SME sector was >50% of
incremental loans when outstanding stress loans there are high at 15.6%
and 10.5%. Although SBI trades near average valuation: FY14E PABV of
1.6x, RoA is below average and stress levels significantly higher at 8%. We
lower FY14/FY15 PAT 14%/5% and cut our SOTP-based 12-m TP to Rs1900
(from Rs2420) and believe SBI will continue to underperform our coverage.
Catalyst
We believe FY14 will be a tough year for SBI as: (1) it will likely continue to
face margin pressure given aggressive lending strategy. We expect NIM to
decline 27bps in FY14 to 2.9%. NII growth (yoy) will thus be muted at 7.5%.
(2) We expect FY14 stress loan formation to remain elevated though lower
than FY13 at 4% (FY13: 6.6%), with risk of further deterioration if macro
remains weak. (3) We expect operating expenses to increase 16% yoy and
note this number could rise higher as the bank will need to make
provisions for pensions, estimates for which are not available. (4) We
expect slower revenue and higher expenses to pull down already low RoA
to 0.7% for FY14 vs 1% in FY13.
Valuation
SBI trades at FY14E PABV of 1.6X (1.4x standalone) vs RoA of 0.74%
(average FY14E-FY15E) and PAT growth of 4% (FY13-15E CAGR). Its
valuations are also higher than those of other PSU banks like BOB and
PNB that trade at FY14E PABV 0.8X and generate RoA of 0.8% to 1%.
Key risks
Improvement in macro, lower NPL accretion, higher margin.
We downgrade SBI to Sell from Neutral as we expect stress levels to
remain elevated and find the company’s desire to grow loan book
aggressively under current adverse macro environment concerning.
Lending in 4QFY13 to mid-corporate and SME sector was >50% of
incremental loans when outstanding stress loans there are high at 15.6%
and 10.5%. Although SBI trades near average valuation: FY14E PABV of
1.6x, RoA is below average and stress levels significantly higher at 8%. We
lower FY14/FY15 PAT 14%/5% and cut our SOTP-based 12-m TP to Rs1900
(from Rs2420) and believe SBI will continue to underperform our coverage.
Catalyst
We believe FY14 will be a tough year for SBI as: (1) it will likely continue to
face margin pressure given aggressive lending strategy. We expect NIM to
decline 27bps in FY14 to 2.9%. NII growth (yoy) will thus be muted at 7.5%.
(2) We expect FY14 stress loan formation to remain elevated though lower
than FY13 at 4% (FY13: 6.6%), with risk of further deterioration if macro
remains weak. (3) We expect operating expenses to increase 16% yoy and
note this number could rise higher as the bank will need to make
provisions for pensions, estimates for which are not available. (4) We
expect slower revenue and higher expenses to pull down already low RoA
to 0.7% for FY14 vs 1% in FY13.
Valuation
SBI trades at FY14E PABV of 1.6X (1.4x standalone) vs RoA of 0.74%
(average FY14E-FY15E) and PAT growth of 4% (FY13-15E CAGR). Its
valuations are also higher than those of other PSU banks like BOB and
PNB that trade at FY14E PABV 0.8X and generate RoA of 0.8% to 1%.
Key risks
Improvement in macro, lower NPL accretion, higher margin.
Double-edged foreign flows: Barclays
• Foreign investment is likely to flow into countries with high historical returns on
capital. Balance of payments data can help to identify countries with particularly
high returns on foreign investments in bonds and equities, and on foreign direct
investment. We find returns on foreign investments have been high in Malaysia,
the Philippines, Thailand and Indonesia, which bodes well for future inflows.
Returns have been low in Korea and Taiwan, and average in Singapore and India.
• The flip side of large foreign investment flows in the past and high returns on
foreign capital is deterioration of the current account balance (via increasing
income outflows). Indonesia and Thailand stand out on this measure.
• Moreover, even countries with a large amount of foreign assets – often in the
form of foreign exchange reserves, which earn low yields – regularly experience
a negative impact. Countries with high levels of reserves such as China, Thailand,
the Philippines and Malaysia should benefit from reserve diversification, which
could add to intra-regional bond demand
• Indonesia and India would benefit most from structural reforms targeting their
current account deficits. Otherwise, given their large funding needs and low
reserve coverage ratios, they are likely to continue to suffer large losses on their
external positions.
Bajaj Finance, Nirmal bang report
Growth story continues; still more steam left
Bajaj Finance (BFL) reported net profit of Rs 163.8 cr (+51.1% YoY) in Q4FY13
driven by strong growth across SME and consumer business. Overall
disbursement growth remained healthy at 21.3% YoY for FY13. However, net
interest income declined sequentially and was marginally below estimates
owing to the higher composition of the lower yielding SME product. The overall
share of the SME segment increased to 48% in Q4FY13 as compared to 46% in
Q3FY13. Cost to income ratio continued to witness improvement driven by
operating leverage. The asset quality remained fairly stable with gross NPA at
1.09% and net NPA at 0.19%. However, there was one SME client which
attributed to marginal increase in Gross NPA. Barring this, asset quality across
segments remained fairly under control.
Going forward, Management has indicated for growth of 25%+ for FY14E.
Margins may witness some compression owing to increasing mix of SME in the
overall portfolio. Lower credit costs and operating leverage will be the key to
strong performance going forward.
BFL continues to enjoy pricing power resulting from the benign competition and
healthy asset quality. BFL has been consistently delivering healthy performance
which is commendable given the current environment. With control over NPAs,
wider access and strong growth in the book, Bajaj Finance will continue to
strengthen its position as a retail finance company. We expect profitability to
grow at 25.3% CAGR over FY13-FY15E.
Demonstrating strong business model and excellent execution capability of
the management, the stock has been an outperformer in the last one year
generating a return of 71.9%. At CMP the stock is trading at 1.89x FY14E and
1.6x FY15E ABV and 9.85x FY14E and 7.89x FY15E EPS. Considering the recent
run up in the stock we recommend our investors to HOLD the stock with a
target price of Rs 1,638 indicating further potential upside of 11% from current
levels. Any decline can be used as an opportunity to BUY the stock as our long
term outlook remains positive.
AUM grew by 33.6% YoY and 4.0% on QoQ basis at Rs 16,844 cr.
Capital adequacy ratio increased to 21.95%, with tier I ratio of 18.7% after
the capital infusion which will aid in growth trajectory for the company.
Disbursement in the Lifestyle financing business stood at Rs 240 cr and is
expected to reach Rs 500 cr in FY14E.
Disbursements in the SME segment remain robust with growth across all
business; working capital and loan against property products.
The company has tied up with Apple for selling its iPhone product.
The company did assignment of Rs 330 cr in Q4FY13
Management has indicated that Bajaj Finance would be applying for
banking license and would be converting into a bank.
The company has declared dividend of Rs 15 per share translating into a
dividend yield of 1%.
Bajaj Finance (BFL) reported net profit of Rs 163.8 cr (+51.1% YoY) in Q4FY13
driven by strong growth across SME and consumer business. Overall
disbursement growth remained healthy at 21.3% YoY for FY13. However, net
interest income declined sequentially and was marginally below estimates
owing to the higher composition of the lower yielding SME product. The overall
share of the SME segment increased to 48% in Q4FY13 as compared to 46% in
Q3FY13. Cost to income ratio continued to witness improvement driven by
operating leverage. The asset quality remained fairly stable with gross NPA at
1.09% and net NPA at 0.19%. However, there was one SME client which
attributed to marginal increase in Gross NPA. Barring this, asset quality across
segments remained fairly under control.
Going forward, Management has indicated for growth of 25%+ for FY14E.
Margins may witness some compression owing to increasing mix of SME in the
overall portfolio. Lower credit costs and operating leverage will be the key to
strong performance going forward.
BFL continues to enjoy pricing power resulting from the benign competition and
healthy asset quality. BFL has been consistently delivering healthy performance
which is commendable given the current environment. With control over NPAs,
wider access and strong growth in the book, Bajaj Finance will continue to
strengthen its position as a retail finance company. We expect profitability to
grow at 25.3% CAGR over FY13-FY15E.
Demonstrating strong business model and excellent execution capability of
the management, the stock has been an outperformer in the last one year
generating a return of 71.9%. At CMP the stock is trading at 1.89x FY14E and
1.6x FY15E ABV and 9.85x FY14E and 7.89x FY15E EPS. Considering the recent
run up in the stock we recommend our investors to HOLD the stock with a
target price of Rs 1,638 indicating further potential upside of 11% from current
levels. Any decline can be used as an opportunity to BUY the stock as our long
term outlook remains positive.
AUM grew by 33.6% YoY and 4.0% on QoQ basis at Rs 16,844 cr.
Capital adequacy ratio increased to 21.95%, with tier I ratio of 18.7% after
the capital infusion which will aid in growth trajectory for the company.
Disbursement in the Lifestyle financing business stood at Rs 240 cr and is
expected to reach Rs 500 cr in FY14E.
Disbursements in the SME segment remain robust with growth across all
business; working capital and loan against property products.
The company has tied up with Apple for selling its iPhone product.
The company did assignment of Rs 330 cr in Q4FY13
Management has indicated that Bajaj Finance would be applying for
banking license and would be converting into a bank.
The company has declared dividend of Rs 15 per share translating into a
dividend yield of 1%.
Hindustan Unilever In Line at Operational Level :: Morgan Stanley
Hindustan Unilever
In Line at Operational Level
Quick Comment – Results In Line at Operational
Level: HUL reported revenue, operating profit and
adjusted profit growth of 12.5%, 16.6% and 17.7%,
respectively, compared with our expectations of 9.2%,
16.2% and 13.9%. Domestic FMCG revenue growth of
13% was driven by 13% growth in HPC and 15% growth
in the foods segment. 1) Key positive is relatively strong
volume growth of 6% vs. MSe 4-5%, whilst the key
negative is continuing sluggish revenue growth and
operating profit trends in the PP segment. 2) The gross
margin and EBITDA margin improved by 125bps and
50bps (MSe EBITDA +100bps yoy), respectively.
Advertisement and promotion expenses increased
90bps, while other expenses decreased 60bps. 3) The
Board has proposed final dividend of Rs6/sh, implying
an F13 dividend of Rs18.50/sh (incl. special dividend
Rs8.50/sh). 4) The tax rate was +110bps (MSe
+330bps)
Key Positives: 1) Soaps & Detergent revenue grew by
12.6%, coming in 1% above estimates. Double-digit
volume growth was reported in ‘Dove’, ‘Lux’, ‘Lifebuoy’,
‘Rin’ and ‘Surf’. 2) The beverage business EBIT margin
(16.9%) was 170bps above our estimate, driven by the
Tea category viz. extended distribution, impactful
activation and continued market development. 3) Foods
business was profitable with a 3.8% margin (MSe 0%).
Key Negatives: 1) Personal product revenue (12.1%)
and margin (25.8%) reported were 5% and 40bps below
our estimates. HUL registered double-digit volume
growth in the Hair and Oral portfolios. 2) The Soaps &
Detergent EBIT margin came in at 12.0%, up 70bps yoy
but 30bps below our expectations.
Reiterate UW: Although we think the consumer industry
fundamentals are intact, HUL’s earnings upgrade cycle
has clearly peaked. Positives (input costs, benign
competition, share gains) are largely factored in and
now offset by a ~700bps rise in effective tax rate over
the next three years and a step increase in royalty
payments to Unilever. Thus, we project an F13-15
earnings CAGR of just 6% – the lowest in our coverage
universe, and, at an F15e P/E of 27x, we remain UW.
In Line at Operational Level
Quick Comment – Results In Line at Operational
Level: HUL reported revenue, operating profit and
adjusted profit growth of 12.5%, 16.6% and 17.7%,
respectively, compared with our expectations of 9.2%,
16.2% and 13.9%. Domestic FMCG revenue growth of
13% was driven by 13% growth in HPC and 15% growth
in the foods segment. 1) Key positive is relatively strong
volume growth of 6% vs. MSe 4-5%, whilst the key
negative is continuing sluggish revenue growth and
operating profit trends in the PP segment. 2) The gross
margin and EBITDA margin improved by 125bps and
50bps (MSe EBITDA +100bps yoy), respectively.
Advertisement and promotion expenses increased
90bps, while other expenses decreased 60bps. 3) The
Board has proposed final dividend of Rs6/sh, implying
an F13 dividend of Rs18.50/sh (incl. special dividend
Rs8.50/sh). 4) The tax rate was +110bps (MSe
+330bps)
Key Positives: 1) Soaps & Detergent revenue grew by
12.6%, coming in 1% above estimates. Double-digit
volume growth was reported in ‘Dove’, ‘Lux’, ‘Lifebuoy’,
‘Rin’ and ‘Surf’. 2) The beverage business EBIT margin
(16.9%) was 170bps above our estimate, driven by the
Tea category viz. extended distribution, impactful
activation and continued market development. 3) Foods
business was profitable with a 3.8% margin (MSe 0%).
Key Negatives: 1) Personal product revenue (12.1%)
and margin (25.8%) reported were 5% and 40bps below
our estimates. HUL registered double-digit volume
growth in the Hair and Oral portfolios. 2) The Soaps &
Detergent EBIT margin came in at 12.0%, up 70bps yoy
but 30bps below our expectations.
Reiterate UW: Although we think the consumer industry
fundamentals are intact, HUL’s earnings upgrade cycle
has clearly peaked. Positives (input costs, benign
competition, share gains) are largely factored in and
now offset by a ~700bps rise in effective tax rate over
the next three years and a step increase in royalty
payments to Unilever. Thus, we project an F13-15
earnings CAGR of just 6% – the lowest in our coverage
universe, and, at an F15e P/E of 27x, we remain UW.
Tax Talk- May 28:: Business Line
My mother, along with her sisters and brothers, inherited a house from their brother who does not having any heirs.
The said property is an independent house in Chennai valued at around Rs 5 crore. Now they want to sell this property. What is the tax treatment for the proceeds made from this sale? Can they claim any exemption?
- Jooby Paul
Angel Broking - Multiple Scrips - Result Updates, May 28, 2013
Forwarding you the Multiple Scrip’s Result Updates. Kindly click on the links to view the report.
HDFC Bank- 4Q13 results: strong margins and asset quality; JPMorgan
HDFC Bank reported strong 4Q13 results, with 30% y/y PAT growth
driven by strong margins and continued asset quality strength. NIMs
ticked up, primarily led by strong deposit flows, and credit quality
remained stable, with 55bp credit costs. Loan growth was robust at 22.7%,
with most retail segments continuing to fire well. We raise our Mar-14 PT
by 11%, to Rs750, on the strong operating outlook and maintain OW.
HDFC Bank is one of our top picks among Indian financials.
NIM improvement. NIMs improved from 4.3% to 4.5% q/q (as per new
RBI-directed accounting policies), led by an improving deposit profile.
The CASA ratio improved 200bp q/q, to 47.4%, driven by 11% q/q CA
growth and 8% q/q SA growth – term deposits were almost flat q/q, and
that is a strong long-term benefit, as TD pricing tends to be the tightest
in 4Q. There was some yield enhancement in the loan book, too, but
deposits remained the primary driver.
Asset quality stable. Asset quality improved, with credit costs declining
18bp q/q, to 50bp. Management mentioned that there was some stability
in the CV portfolio, though delinquencies still remained elevated – the
CE portfolio continues to see stress. The rest of the book remains robust,
and overall credit costs remain well below expected loss levels in the
retail book. There was no guidance for credit costs, but management
reiterated that past discretionary provisioning remains a cushion against
a worsening economy.
Loan growth strong, fees weak. Loan growth, at 22.7%, was slightly
ahead of estimates, with management reiterating that the industry outlook
is improving for FY14. Management expects retail to continue to
dominate growth, though corporate demand could be better in FY14.
Fees were under pressure (declined 1% q/q) from shifting products in
insurance sales, some pressure from loan fees as the retail mix changed
away from installment products, and regulatory pressure on some
banking products, like debit cards.
driven by strong margins and continued asset quality strength. NIMs
ticked up, primarily led by strong deposit flows, and credit quality
remained stable, with 55bp credit costs. Loan growth was robust at 22.7%,
with most retail segments continuing to fire well. We raise our Mar-14 PT
by 11%, to Rs750, on the strong operating outlook and maintain OW.
HDFC Bank is one of our top picks among Indian financials.
NIM improvement. NIMs improved from 4.3% to 4.5% q/q (as per new
RBI-directed accounting policies), led by an improving deposit profile.
The CASA ratio improved 200bp q/q, to 47.4%, driven by 11% q/q CA
growth and 8% q/q SA growth – term deposits were almost flat q/q, and
that is a strong long-term benefit, as TD pricing tends to be the tightest
in 4Q. There was some yield enhancement in the loan book, too, but
deposits remained the primary driver.
Asset quality stable. Asset quality improved, with credit costs declining
18bp q/q, to 50bp. Management mentioned that there was some stability
in the CV portfolio, though delinquencies still remained elevated – the
CE portfolio continues to see stress. The rest of the book remains robust,
and overall credit costs remain well below expected loss levels in the
retail book. There was no guidance for credit costs, but management
reiterated that past discretionary provisioning remains a cushion against
a worsening economy.
Loan growth strong, fees weak. Loan growth, at 22.7%, was slightly
ahead of estimates, with management reiterating that the industry outlook
is improving for FY14. Management expects retail to continue to
dominate growth, though corporate demand could be better in FY14.
Fees were under pressure (declined 1% q/q) from shifting products in
insurance sales, some pressure from loan fees as the retail mix changed
away from installment products, and regulatory pressure on some
banking products, like debit cards.
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