It’s one step forward
The Centrum Corporate Connect investor conference, held on May28, 2014
had an impressive turnout of 34 corporates, around 55 investor
organisations and 625 meeting requests. This response, far better than
our own expectations, was undoubtedly helped by a strong election
mandate. Evidently, it was also an indication of the quality of the
companies showcased, as also the fact that within a broad, macro
market upturn, there was a strong undercurrent of exploring niche
ideas. The overall message was that both corporates and investors were
ready to welcome a potentially better era, though they all
acknowledged challenges.
$ Industrials taking steps gingerly towards capex: The last three
years’ downturn has driven all companies in this segment to a major
cost-reduction and working capital rationalisation mode. But, in what
came as a pleasant surprise, many corporates used phrases such as
growth focus, visibility, expansion and ‘worst-is-behind’, which was
unthinkable even a few weeks back. Interestingly, the only unlisted
participant – Western Railways – emphasised the continuation of strong
railway capex and steps to expedite completion of mega projects.
$ Understandably, Financials were more cautious: With their fortunes
likely to revive only with a substantial lag to an upturn in the real
economy, only fee-based businesses appeared upbeat, while lenders
signalled an FY16 recovery, both on growth and credit quality. Part of
it also has to do with the already implemented and expected regulatory
tightening on various parameters, which curbs the room for manoeuvre
and capital efficiency.
$ Consumer non-cyclicals not all that despondent: Perhaps this
conclusion was a result of the inadvertent selection bias – all
participants under this category were niche product/service companies
rather than mainstream FMCGs, who appeared to be passing through a
slowdown phase. But therein also lies a lesson, the choice of the
right product and the market, including exports, has helped a number
of companies retain buoyancy.
$ Big sigh of relief after elections and high hopes pinned on the new
regime: Possibly because of past disappointments, participants were
chary of making sweeping statements, but said that with the change
government, risk in their business decisions was now out of the way.
The subtext of their commentaries was their desire to see a more
facilitative business environment rather than overt pump-priming,
which of course, could benefit companies at the margins. The mood of
the conference was best paraphrased by one participant: “You are now
less aggressive with us, and we are better prepared”.
Thanks & Regards
--
��
The Centrum Corporate Connect investor conference, held on May28, 2014
had an impressive turnout of 34 corporates, around 55 investor
organisations and 625 meeting requests. This response, far better than
our own expectations, was undoubtedly helped by a strong election
mandate. Evidently, it was also an indication of the quality of the
companies showcased, as also the fact that within a broad, macro
market upturn, there was a strong undercurrent of exploring niche
ideas. The overall message was that both corporates and investors were
ready to welcome a potentially better era, though they all
acknowledged challenges.
$ Industrials taking steps gingerly towards capex: The last three
years’ downturn has driven all companies in this segment to a major
cost-reduction and working capital rationalisation mode. But, in what
came as a pleasant surprise, many corporates used phrases such as
growth focus, visibility, expansion and ‘worst-is-behind’, which was
unthinkable even a few weeks back. Interestingly, the only unlisted
participant – Western Railways – emphasised the continuation of strong
railway capex and steps to expedite completion of mega projects.
$ Understandably, Financials were more cautious: With their fortunes
likely to revive only with a substantial lag to an upturn in the real
economy, only fee-based businesses appeared upbeat, while lenders
signalled an FY16 recovery, both on growth and credit quality. Part of
it also has to do with the already implemented and expected regulatory
tightening on various parameters, which curbs the room for manoeuvre
and capital efficiency.
$ Consumer non-cyclicals not all that despondent: Perhaps this
conclusion was a result of the inadvertent selection bias – all
participants under this category were niche product/service companies
rather than mainstream FMCGs, who appeared to be passing through a
slowdown phase. But therein also lies a lesson, the choice of the
right product and the market, including exports, has helped a number
of companies retain buoyancy.
$ Big sigh of relief after elections and high hopes pinned on the new
regime: Possibly because of past disappointments, participants were
chary of making sweeping statements, but said that with the change
government, risk in their business decisions was now out of the way.
The subtext of their commentaries was their desire to see a more
facilitative business environment rather than overt pump-priming,
which of course, could benefit companies at the margins. The mood of
the conference was best paraphrased by one participant: “You are now
less aggressive with us, and we are better prepared”.
Thanks & Regards
--
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