23 July 2013

STFC NCD Issue Closes 24th July 2013 ... Wednesday............

Dear All, 

Shriram Transport Company India's NCD public issue is closing on Wednesday,July 24,  2013. 


Issue has subscribed upto Rs.697.155 crs. Balance amount remaining to subscribe is Rs.52.845 crs. 

India: Bright spots emerging :: HSBC Research

Economy continues to slow but patches
of growth are emerging
Valuations now look reasonable.
Elections and INR volatility remain the
key themes for the next year
Overweight India. Stock picking is key:
Prefer IT, healthcare and selected banks

Where are the customers’ yachts?: Macquarie Research

Event
 Q1FY14 earnings preview reflect low demand: For 128 stocks under our
coverage, we are forecasting a meagre 5% YoY revenue growth for Q1, which
is the lowest level seen over a decade and almost in line with GFC. This is
driving a 5% increase in EBITDA, though PAT is expected to show no growth
given MTM forex losses. We think Metals and Cement will be the worst
performers, while Private Banks, NBFCs and Power sector will show the
fastest growth.
 Earnings revisions are a key driver of stocks prices; however, several have
run up against this trend and look expensive – these include ACEM, UTCEM,
INFY and ZEETV. On the other hand, stocks where positive earnings
revisions are holding up and yet have underperformed include REC, PFC,
ICICI, YES and NTPC.
Impact
 Revenue growth at all-time low: Impact of a stalling economy is well visible
now, with revenue growth in the vicinity of GFC levels of around 5%. We do
expect that there will be revival in rural demand as the monsoon is
progressing well. Also, government spending is expected to increase by 30%
YoY in the 2
nd half as it prepares for general election due early next year.
 Margins have stabilised: EBITDA margins have benefited from the
moderation in inflation. There is a bit of worry that the fall in INR might stoke
inflation again. However, commodity prices are already falling globally as the
slowdown in China has pushed most commodities in an oversupply situation.
There is risk from crude oil, though, given the unrest in Egypt, but the
government is absorbing this with measured increase in diesel prices.
 Power sector is making a comeback: Sectors expected to show profit
growth of 10% or more include power, telecom, pharma, consumer and
media. Amongst financials, PSU banks are expected to drag growth down
with an 8% decline in profits, while private banks and NBFCs are expected to
show 23% and 21% profit growth, respectively. On the negative side, cement
and metals would likely be the worst-performing sectors with negative
revenue growth leading to decline in profits. Other sectors expected to show
decline in profits include autos and real estate.
 Consensus expectations are conservative: Consensus is building in 12–
13% earnings growth driven by 8% revenue growth and a slight improvement
in EBITDA margins. We think that as GDP growth recovers closer to 6% from
5%, corporate revenue growth has potential to surprise upwards.
Outlook
 Holding up despite FII outflows: Markets have held up well despite FII flows
turning negative. Once the anxiety over phasing out of QE3 has eased, focus
will shift back to domestic economics and we are hopeful of a recovery in 2nd
half, driven by improved government spending and prospects of normal
monsoon. Consider cyclical stocks.

How to file tax returns electronically :Business Line

Come July, what is on top of our minds is tax return filing.
Most of us might have experienced hardships in manual preparation and verification of returns, visiting the tax office, identifying the jurisdiction and spending time in long queues when filing the returns in paper form. On the contrary, e-filing is really a boon, as the benefits range from avoiding long queues to file returns to quick processing of the tax returns to speedy refunds. But the catch is that you need to focus on a few things while filing the tax return electronically. Otherwise, you will end up wasting time with added woe to set things right later on. Here is a guide to e-filing returns through the Income-Tax Department’s Web site.
What you should do
Ensure that appropriate ITR Form is used, which is available for download in the Income-tax e-Filing website – https://incometaxindiaefiling.gov.in. For example, ITR 1 is to be used in case an individual has income from salary, house property and other sources whereas ITR 2 is applicable for those having income from all other sources except income from business or profession.
Also, fill in your correct contact details (address, email and telephone number) in the income-tax return, to ensure appropriate communication from the Tax Department. Make sure that the bank account number and MICR code (the 9 digit number found at the bottom of the cheque leaves) is entered correctly, in order to facilitate refund credits.
Verify the tax credits as reflected in the Form 26AS (available for download in the same website). Form 26AS is a consolidated tax statement which includes details of tax deducted at source, advance tax, self assessment tax etc deposited by the taxpayer. You must identify any mismatch in the tax credits against the Form 16 / Form 16A (TDS certificates) issued, to take up the matter with the deductor (employer / banker) on time.
Steps to Filing return
As a prerequisite, you should get registered at www.incometaxindiaefiling.gov.in using PAN and other personal and contact details. On receipt of activation link and by successfully activating it, you are ready for e-filing of the tax return.
In this context, it is also beneficial to understand ‘XML files’ and ‘Digital signature’ . XML file is a file format which is generated for uploading a tax return, which can be understood both by the taxpayer and the computer. Whereas, digital signature is a method by which authentication is done electronically instead of physical signature.
The following steps should be taken for e-filing of the tax return. First, select the appropriate ITR Form and download the same. Fill the ITR Form offline and save the XML file generated by the Form.
Then, register your PAN in the income-tax website by getting a username (the PAN itself ) and a password (of your choice). Log in and click the relevant form on the left panel and select "Submit Return". After this, upload the XML file and print the acknowledgement/ ITR-V Form. If you wish to use a digital signature to sign the return, then the process is over. If not, you need to sign and file the acknowledgement with the Central Processing Centre (CPC) of the Income-tax Department within 120 days of uploading the return. Once the CPC receives the physical copy of the signed ITR-V form, an acknowledgement will be sent by email.
The income tax department has upgraded its e-filing website with additional features. With a user-friendly interface and enhanced features, the website allows taxpayers to submit tax returns, request for rectification of returns, view old tax returns and their acknowledgements as well as demand and check the status of tax refunds. Though the process of e-filing may appear to be little complicated, by paying a little attention to above, one can reap the benefits of e-filing!
What you should not do
Do not miss to file your returns on time. Delay in filing the tax return has certain unfavourable consequences as you would lose your entitlement to carry forward losses to subsequent years (except loss from house property). Also, you lose the benefit of being able to revise the return in case of an error or omission discovered later. Lastly, it could also be a costly affair as there is an interest charge at the rate of 1 per cent of outstanding taxes, per month of delay in filing the returns.
Do not forget to send the signed ITR V, after uploading your tax return on the website of the Income-tax department (without digital signature), within 120 days to CPC, else the tax return becomes invalid as and is as good as not filed.
(The writer is a senior tax professional, EY.)

LIC Housing Finance - Raising Estimates to Factor In Better Capital Position :: Morgan Stanley Research

F13 Tier I ratio was above the 10.7% reported as of
Sep-12 and our estimate. Lower risk weights
announced by the RBI (NHB should follow) will raise
Tier I ~40 bps more and lower capital consumption
structurally. Raising EPS estimates and TP; we no
longer assume capital raising in F2014.
F13 Tier I ratio was 11.5% according to the recently
published annual report, above our estimate: The last
reported Tier I ratio based on audited accounts as of
Sep-12, was 10.7% (lower than 11% as of Mar-12). RWA
grew 11.5% between Mar-12 and Sep-12 – faster than
loans at 9.5%. We estimated F2013 Tier I ratio at 10.1%,
accounting for dividends and RWA growth in line with
loan growth. However, RWA declined 2% from Sep-12 to
Mar-13 (based on F2013 annual report data). Likely
reasons are a high proportion of loans qualifying for lower
risk weights after repayments during the year,
cancellations of sanctions not utilized (usually beyond 90
days), and other potential capital efficiency measures.
We no longer assume capital raising in our F14 base
case: The company may still decide to raise capital, as
suggested on past conference calls. However, the 11.5%
Tier I ratio is now healthy. Also, assuming the NHB lowers
risk weights in line with the RBI, Tier I could rise 40 bps
and capital consumption will be lower structurally on
individual mortgages > Rs0.2mn up to Rs0.75mn.
Raising EPS estimates, TP by 3% to account for no
dilution in F14; maintain OW: We continue to like the
retail mortgage segment. Despite investor concerns
about developer asset quality, valuation (9.0x F14e P/E,
1.6x BV) is attractive vs. 27% EPS CAGR in F13-15e.

Why Chinese slowdown matters :Business Line


Ways to check your spending spree :: Business Line

It is no secret that you spend more when you use your credit card than if you pay cash. But will your spending behaviour change if you use a debit card instead? It turns out that behavioural psychology can throw some light on this issue.
Consider credit card purchases. You buy and enjoy the product today but your credit card payment is typically due a month later. The pain of paying is distanced, while the pleasure of owning the product is immediate. This immediate gratification can sometimes drive you to indulge and stretch your household budget.

PRODUCT FEATURES

Behavioural psychologists have also found another interesting behaviour about credit card purchases. Most individuals focus on the features of the product that they buy while using a credit card.
Whereas these individuals focus on the cost of the product when they pay cash. The finding is not entirely surprising. The pain of parting with cash forces you to measure the amount you give up while the distancing of the pain in the case of the credit card drives you to look at the joy of owning the product.
The question is whether you would behave differently if you use a debit card instead of a credit card. It appears that debit card could be better than a credit card, but not as good as cash. The reason is simple. The pain of parting with cash is only virtual and not physical in the case of a debit card. Your brain cannot simulate the pain based on virtual cash, as it can with physical cash. You can no doubt visualise your bank balance reducing, with the instant message of transactions on your mobile. But that is unlikely to have the same effect as parting with cash from your purse.

WHAT’S BETTER

This does not mean that debit cards are no better than credit cards. In fact, you should use a debit card if you want to control your spending.
Instead of overloading your credit card and consequently paying high interest on the amount outstanding, you can use your debit card and only spend the amount you have in your bank account. If you choose to use a debit card, have a separate bank account for your spending needs.
This would help ensure that you do not wipe out your regular bank account where your salary is credited every month. And if you have serious problems with self-control, use only cash for your purchases. The instant pain of paying is the only factor that can slow you down from spending all the money in your bank account.

United Spirits Ltd Diageo Estimates >24% EBITDA CAGR for UNSP Over the Next Five Years :: Morgan Stanley Research

UNSP is the top pick in our coverage universe:
Bears on this stock believe that UNSP’s long-term
earnings visibility is low. We disagree – our in-depth
work and conviction on profit pool growth for the Indian
liquor industry aside (refer to our report of 21 May 2013,
Structural Rise in Liquor Profit Pool in India; OW),
Diageo itself estimates >24% EBITDA CAGR for UNSP
over the next five years.
After the initial tailwinds following the change in
management control, we expect the next leg of stock
outperformance to be catalyzed by increased
confidence in higher long-term earnings growth.
What does “economic profit positive in year 5”
mean? In its 4 July press release, following the
completion of the share purchase agreement with
United Breweries (Holdings) Ltd, Diageo reiterated that
‘the transaction is expected to be… economic profit
positive in year 5 assuming a 12% WACC.”
Economic profit is the amount remaining after
subtracting from total income the total monetary cost of
all business activities, as well as the opportunity cost of
profits. Here, we assume the opportunity cost for Diageo
to be its capital employed to acquire the UNSP stake
times its Weighted Average Cost of Capital (WACC).
Diageo holds 25.02% of the enlarged UNSP share
capital at an aggregate cost of Rs52.36bn. Hence, to be
economic profit positive in year 5, UNSP would likely
have to generate over Rs25.1bn of NOPAT in F18. At
the current tax rate and based on our estimate of F18
depreciation, EBITDA should be over Rs40.7bn.
Further, with 12-16% F13-F18 revenue CAGR, we
estimate F18 EBITDA margin of 18.0-21.5%.
In our base case, we estimate F18 EBITDA of Rs44.3bn
and margin of 19.5%.