Month: June 2008

Earlier we have presented statistics on the market share of all the Life Insurance companies in India including LIC [Public Sector]. Today lets analyze the difference in market share of Private Sector Life Insurance Companies over a Year’s time.

Top 5 Life Insurance Companies in India at the end of April-2008 are:
ICICI Prudential Life – 22.1%
Bajaj Allianz – 13.8%
SBI Life – 9.8%
Reliance Life – 8%
Max New York – 8%

Top 5 Gaines in Life Insurance Business in a Year:
Reliance Life +3.9% gain in total private life insurance market share
Birla Sunlife +3.3% gain in total private life insurance market share
Met Life +2.8% gain in total private life insurance market share
Aviva +2% gain in total private life insurance market share
SBI Life +1.7% gain in total private life insurance market share

Top Losers in Life Insurance Business in a Year:
ICICI Prudential Life – 8.3% loss in total private life insurance market share
Bajaj Allianz – 2.4% loss in total private life insurance market share
HDFC Standard Life – 1.2% loss in total private life insurance market share

From the above data, the reason is now obvious on why K.V.Kamath, wanted to list ICICI Prudential Life as a separate entity on the bourses.

With the Indian Inflation out of control, India’s central bank – RBI stepped in late last evening and hiked the repo rate – the rate at which it lends/injects money by 25bps to 8%. The reverse repo rate – the rate at which RBI absorbs liquidity and the CRR were left unchanged at 6% and 8.25%.

Since the uptrend in inflation from 3% levels in Oct 07 to 8%, the RBI has used the CRR as a liquidity absorbtion tool and raised the CRR 75bps in the same period from 7.75% in Sept07 to 8.25% in May08. Despite a deceleration in the macro momentum, in a pre-election year, inflation will continue to get priority over growth.

Home Loan and Auto Loan are likely to see equivalent rise in lending rates [~ 0.25%]

Elecon Engineering Ltd’s [EEL] Q4FY2008 results are below expectations. Revenue below estimates at Rs3.3 bn and 16% yoy growth and net profit below estimates at Rs230 mn and 30% yoy growth.

For FY2008, Elecon Engineering (EEL) reported net profit growth at 26% yoy to Rs672 mn and earnings of Rs7.2/Share, below estimates. Led by slippages in new business, we have revised our revenue estimates by 15.1% (Rs11.5 bn) and 23.2% (Rs14.0 bn) for FY2009E and FY2010E respectively. Consequently, the net profit estimates are revised by 22.1% (Rs840 mn) and 31.6% (Rs992 mn) for FY2009E and FY2010E respectively.

EEL order book at Rs12.9 bn, in line with our expectations. The order book has grown at 55% from Rs8.3 bn to Rs12.9 bn. The current order book indicates robust visibility at 1.6X FY2008 revenues, best in last 5 years.