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India Equity Research Reports, IPO and Stock News
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ICICI Bank: Company meeting takeaways: cautiously optimistic [Manish Shukla]
In our recent meeting ICICI Bank management was cautiously optimistic. While the bank appreciates RBI's hawkish imperative on account of inflation, it believes that further rate hikes could hurt loan growth -- retail loan momentum is already moderating. Fee income growth is likely to be moderate on account of a slowdown in fresh sanctions. The bank is confident of improving NIM in 2HFY12 and does not see any immediate risks to asset quality. We maintain our Hold.
Health Care: Exports to few European markets may be under threat [Abhay Shanbhag]
Stada (SAZ GR, mkt cap: €1.36bn, Buy) announced a one-off write-down on receivables in Serbia that amounted to €85m post-tax. Our DB analyst covering Stada wrote that (a) Serbia accounts for only 6% of Stada’s rev., (b) only ~15% of the write-down might be cash relevant, and (c) Stada is focusing aggressively on costs. Despite the stock trading at only ~10x CY11e; this write-down (on DBe CY11 revenue, EBIDTA and PAT of € 1737m, € 331m & €133m respectively) resulted in a 19% fall yesterday.
Indian Cement Sector: From a trot to a canter; ACC, Grasim, Shree our top picks [Chockalingam Narayanan]
Rising inquiries for cement purchases could result in a demand uptick a good 3-6 months ahead of our previous expectations. With the pace of new capacity additions slowing, utilisations are set to move to c85%+ during peak season -- read pricing power shifting to producers. Risk-reward appears favourable for our new top picks – ACC (non-consensus), Grasim and Shree -- as they are trading closer to their replacement value, especially at a time when capital costs are rising and the sector could see a turnaround in some regions over the next 12 months.
The Investigator: Pulling the Plug [Ajay Kapur]
On the 23rd August, we wrote a report “Risk-Love Deep Panic Alert, tactical Buy” (The Investigator). Indeed since then the MSCI ACWI index was up 4.6% to its recent highs, and is now down 2.1%. In that report, we had also cautioned “We will look at the ECRI stable of leading economic indicators, apart from our own battery of high-frequency leading economic indicators. If we note any deterioration, we will pull the plug on this call. Fighting the Tape when a recession is imminent is dangerous, regardless of how panicked sentiment is.”
Volatility Cross Asset Note: TWIST And Shout [Aleksandar Kocic]
A very volatile reaction to operation twist continued for the second day with big moves across all markets. The size of purchases at the long end of the US Treasury curve remains the biggest surprise and a cause of significant re-pricing. The negative response of risky assets can be rationalized in the context of re-pricing in government bonds.
US Daily Economic Notes: Amid the gloom, corporate profits are a silver lining [Joseph LaVorgna]
Despite weak economic growth in the first half of the year, corporate profit growth remains healthy, indicating that recession may not be imminent. Since turning positive in Q3 2009, corporate profits have continued to grow year-on-year for the past eight quarters. At the moment, profits are very high, especially relative to the number of people working in the economy.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ICICI Bank: Company meeting takeaways: cautiously optimistic [Manish Shukla]
In our recent meeting ICICI Bank management was cautiously optimistic. While the bank appreciates RBI's hawkish imperative on account of inflation, it believes that further rate hikes could hurt loan growth -- retail loan momentum is already moderating. Fee income growth is likely to be moderate on account of a slowdown in fresh sanctions. The bank is confident of improving NIM in 2HFY12 and does not see any immediate risks to asset quality. We maintain our Hold.
Health Care: Exports to few European markets may be under threat [Abhay Shanbhag]
Stada (SAZ GR, mkt cap: €1.36bn, Buy) announced a one-off write-down on receivables in Serbia that amounted to €85m post-tax. Our DB analyst covering Stada wrote that (a) Serbia accounts for only 6% of Stada’s rev., (b) only ~15% of the write-down might be cash relevant, and (c) Stada is focusing aggressively on costs. Despite the stock trading at only ~10x CY11e; this write-down (on DBe CY11 revenue, EBIDTA and PAT of € 1737m, € 331m & €133m respectively) resulted in a 19% fall yesterday.
Indian Cement Sector: From a trot to a canter; ACC, Grasim, Shree our top picks [Chockalingam Narayanan]
Rising inquiries for cement purchases could result in a demand uptick a good 3-6 months ahead of our previous expectations. With the pace of new capacity additions slowing, utilisations are set to move to c85%+ during peak season -- read pricing power shifting to producers. Risk-reward appears favourable for our new top picks – ACC (non-consensus), Grasim and Shree -- as they are trading closer to their replacement value, especially at a time when capital costs are rising and the sector could see a turnaround in some regions over the next 12 months.
The Investigator: Pulling the Plug [Ajay Kapur]
On the 23rd August, we wrote a report “Risk-Love Deep Panic Alert, tactical Buy” (The Investigator). Indeed since then the MSCI ACWI index was up 4.6% to its recent highs, and is now down 2.1%. In that report, we had also cautioned “We will look at the ECRI stable of leading economic indicators, apart from our own battery of high-frequency leading economic indicators. If we note any deterioration, we will pull the plug on this call. Fighting the Tape when a recession is imminent is dangerous, regardless of how panicked sentiment is.”
Volatility Cross Asset Note: TWIST And Shout [Aleksandar Kocic]
A very volatile reaction to operation twist continued for the second day with big moves across all markets. The size of purchases at the long end of the US Treasury curve remains the biggest surprise and a cause of significant re-pricing. The negative response of risky assets can be rationalized in the context of re-pricing in government bonds.
US Daily Economic Notes: Amid the gloom, corporate profits are a silver lining [Joseph LaVorgna]
Despite weak economic growth in the first half of the year, corporate profit growth remains healthy, indicating that recession may not be imminent. Since turning positive in Q3 2009, corporate profits have continued to grow year-on-year for the past eight quarters. At the moment, profits are very high, especially relative to the number of people working in the economy.
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