Indian Equity Research and Investment Strategy
Like most of our readers I was also curious to figure out the constituents of the Indian Inflation Data. Finally I got to know what are the constituents of the Indian Inflation data and I thought I’ll share with our readers here. Due to lack of correct data, analyzing and calculating the same is beyond the scope of this article.
Food and Non-Food Articles in Inflation Index:
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The IT spending in US Financial companies is likely to see a drop of 4% YoY [Dec-08] This contraction will continue for at least a year and the turnaround could happen only by 2010. Volumes for India IT companies are likely to be severely affected in F2010, although too uncertain to estimate as of now.
Even in the best case for Indian IT companies if the spending is unlikely to be cut down, due to collapse and M&A activities, BSFI segment will easily contract by 2-3%. The business environment has deteriorated considerably faster than what the street may have expected.
Ahead of th results, Analysts expect Infosys to lower its F2009 organic USD revenue guidance by ~2.5% to at least US$4,850mn in the worst case (vs. current guidance of US$4,970-5,050mn). Likewise, Satyam may also lower its F2009 USD revenue guidance to US$2,600mn (21.5% YoY revenue growth) from current guidance of 24-26% YoY revenue growth.
With 10% depreciation of the INR, IT companies are likely to stay on target for their earnings in Rupee terms.
The Indian Real Estate sector, one of the most speculative sector in the growth story and house of cards is severely beaten down on the bourses. All the Realty Stocks have hit a new LOW. They have been making new lows since June-08. The Table below shows Live Stock Prices of Indian Real Estate Stocks. 
We are presenting complete All Time High and Low Data for your ready reference. (more…)
India’s overall textile exports to the US fell by 3.6% while overall US imports fell by 1.7% in July 2008. China’s textile exports in July were up 0.7% yoy. In the apparel category, imports by the US fell by 0.5% while India’s apparel exports fell by 4.9% and China apparel exports grew by 1.1%.
India’s market share in textile export slipped 9bps yoy. China continued to regain market share in August, as its share rose to 37.0%, up about 89 bps yoy.
Despite 12% depreciation of the Indian Rupee versus RMB from Jan 2008 to July 2008. However, India does not seem to have benefited from this relative improvement in competitiveness yet.
We recommend investing by means of SIP in HDFC TaxSaver Fund [ELSS]. Here is a small analysis on how these fund managers adjust the folios to beat the benchmarks even when the markets under turmoil and thus crate wealth for discplined investors like us.
Assume your SIP is on the 15th of Every Month. The Market hit a bottom of 12,676 [BSE Sensex] on July-15th. NAV of this fund on that date is Rs 122.67. On Sept-15th, Sensex is at 13,531 and NAV of this fund is Rs 137.29.
The benchmark index has risen by 6.7% while the NAV of the fund has appreciated by 11.9% between the above two dates [15/7 and 15/9] So this is how with continuous monitoring and shuffling of portfolio the fund managers beat benchmarks. His job now is to fall slower than the markets and he is a winner 🙂
The softening of steel prices to benefit equipment makers like Cummins India. Raw material (mainly steel and cast iron) costs accounted for 64% of the revenues for Cummins India in FY08. In response to the sharp increase in material prices (Steel and Cast iron) in Jan-June 2008 period, Cummins had taken price hikes between 2-2.5% across its product categories in the first quarter. The full impact of these hikes is expected in current quarter. (more…)