Indian Equity Research and Investment Strategy
WNS holdings is looking to buy out ICICI Bank’s entire stake and mop up shares held by some other private equity investors in Firstsource Solutions. ICICI Bank is the single largest shareholder in Firstsource Solutions (FSL), holding 24.84% stake (as at end March 2008).
Firstsource is among India’s leading business process outsourcing (BPO) companies providing business process management services to global leaders in banking & financial services, telecom & media and healthcare domains.
Merill Lynch has downgraded Shri Renuka Sugars on a number of factors – Indian govt steps to reduce buffer stock of about 5mn tonne sugar to reign in inflation coupled with prospect of good monsoon has increased supply side risk. Over 15% additional sugar cane production in Brazil has raised supply pressure and US Congress approval of farm bill on 15th May08 maintaining import tariff barrier on ethanol a deterrent too. (more…)
On fear of more than 20% hike in Petrol prices [Rs 10 to Rs 16 / litre hike expected], Auto stocks were unloaded on the bourses mercilessly. Bajaj Auto is down 11%, Maruti Suzuki down 4%, Hero Honda down 2%, Tata Motors down 2.5% and TVS Motors down 3%.
Auto firms are already facing a facing a challenging time. On the one hand, sales has slowed down due to higher interest rates and on the other hand a surge in raw material prices has squeezed margins.
India’s Economic Growth story can be grouped into three phases. (1) Prolonged below-trend growth period – 1998 to 2003. (2) Acceleration to Overheating Zone – 2004 to 2007; (3) Reverting to sustainable growth rate. We believe the underlying sustainable growth rate currently is 7.5-8% – the level at which the risk of overheating is low. (more…)
Though the revenue growth was good in this quarter, operating margins for the company were hit due to higher investments in the newer businesses. Going forward the growth in the cigarette business of the company will be severely impacted due to the recent changes in the excise duty structure in the Union budget. However, there might be some near-term strength due to migration of consumers from unfiltered to the filtered segment which would result in the company reporting strong numbers in the next few quarters. (more…)
India’s leading telecom company Reliance Communications and MTN Group, a leading emerging market telecom operator, have agreed to enter into exclusive negotiations for a period of up to 45 days with respect to a potential combination of their businesses.
The negotiations are currently taking place and a further announcement will be made when appropriate. It is to be noted that there is no certainty either on completion, or the timing of the said proposal. In the meantime, shareholders are advised to exercise caution in their dealings in the companies securities dealings until a further announcement is made.