Indian Equity Research and Investment Strategy
SBICap Securities has initiated coverage on IDFC with a BUY Rating due to High Quality and Low Leverage. IDFC is now a diversified financial institution with investment banking / stock broking under its hood by the acquisition of SSKI / Sharekhan and Standard Chartered Mutual Fund.
Infra Project Finance:
Project Finance continues to be the largest contributor in terms of volume and bottom line. Since this business is not a high RoE, valuations are pretty much on the lower side. (more…)
With the rupee weakening to a low of Rs46.8/US$1 and call money rates spiking to 16%, the RBI announced a host of measures late last evening to stem market volatility.
Given the volatile market situation, near term rupee weakness is likely to continue and could trade in the Rs45-47 range. Although portfolio flows will likely remain negative, FDI remains buoyant and hence by March 09 INR is likely to be around Rs 43 levels to the USD.
If you are a regular reader here, you may have noticed that we didn’t put out any recommendation to BUY in the past 15 days but had recommended to book profits on rally. Just when everybody thought the worst was over, Frean and Panic has gripped Global Markets with Lehman filing for bankruptcy.
ICICI Bank has exposure of about USD80mn to Lehman Brothers in form of senior debt. This has triggered a fresh round of SELL of in the Indian market though domestic Institutions are BUYING. As Lehman goes under liquidation and the (more…)
We have obtained information about Advance Tax numbers by various corporates in India paid for Q2 of FY09. Here is the list [All figures in Rs Crore],
Except Tata Steel and Tata Motors, rest have seen an increase in the numbers compared YoY basis.
Advance Tax Numbers for Q1- FY2009.
Update:
Macquarie analysis shows that advance taxes paid in a quarter by a company has no correlation. 75% of the time the advance tax paid in a particular quarter is different from the accounting tax by more than 25%. There is absolutely no pattern – not even a normal distribution, not even a systemic understatement.
The filing of Chapter 11 by Lehman Bros and Bank of America’s buyout of Merrill Lynch has increased concerns about the possible impact on Indian IT leading to a sharp sell-off. Prima facie, expect a 2-3%/4-5% negative impact on FY09E/FY10E US$ revenues if the US financial sector continues to show more problems.
Lehman is not a big customer for any of the large Indian IT companies. Merrill is a big customer for Satyam and TCS and Bank of America is a big customer for TCS and Infosys. There could be some impact on Satyam over the coming 2-3 quarters.
Goldman Sachs just minutes ago removed Satyam Computers from favorite growth list due to stop loss. Satyam is down 15.4% since its addition to the favorite growth list on July-31, 2008, exceeding stop loss limit, vs. the S&P 500 down 5.9%.
We are posting a fundamental review on National HydroPower Corporation Ltd ahead of its planned IPO.
NHPC’s current capacity is 5,170MW and plans to add 5,320MW in the 11th plan, of which 1,030MW has already been commissioned. NHPC plans to further add 13,360MW in the 12th plan. The company generated 14,813mn units in FY08 and recorded a turnover of Rs23bn and net profit of Rs10bn. Total assets as on March 31, 2008 were Rs285bn and net worth was Rs175bn. (more…)