We have obtained the basis of Allotment of Chemcel Biotech IPO for Retail and HNI Category. For, institutions, I believe they are calling and informing the pattern of allocation in such terrible market conditions. WoW!!! Investors Rule. (more…)
Year: 2008
IT Services Sector – Buy / Sell ?
Indian IT stocks have corrected sharply in the last two weeks given global financial turmoil. Uncertainty of demand environment and achievable growth in 2009E/FY10E is the key issue. Valuations are at new lows; confidence in earnings also remains low. While lower valuations/reduction in consensus means that risks have largely been priced in, (more…)
Soft Landing of Economy – Very Likely
Amidst Global Financial Crisis, the Indian Economy is likely to end up with a Soft Landing after 5 years of growth. In a report, Merill states that the soft landing is possible only due to lower crude oil prices which will cool of the double digit inflation but the bad news is growth cycle is irretrievably past peak with the return of capacity exhaustion.
Merrill has cut FY10E inflation forecast to 5.5% (from 6%) to price in lower oil
prices, in-line with RBI expectations of 5%. RBI to ease the money market to reverse repo mode (at a higher 6.5% LAF reverse repo rate) from the present repo mode (at the 9% LAF repo rate).
US$90/bbl will likely ease pressure on the government to hike prices drastically. The current account deficit will likely slip to 2.7% of GDP in FY09 (from 3%) and 1.9% in FY10 (from 2.3%). This will put the macro numbers in better shape.
Welspun Gujarat Stahl Rohren – BUY
HDFC Sec has initiated coverage on Welspun Gujarat Stahl Rohren – WGSRL with a Long Term BUY rating. The fundamentals of the company remain unchanged post Q1FY09 results with minor cut in plate production for FY09E and FY10E which will be partly compensated by volumes in the higher grade (API) category. WGSRL is a mere converter of of various forms of steel and not a steel producer. The pipe segment globally is of national interest in terms (more…)
Mixed Auto Sales in September
Dealer dispatches were again mixed this month with strong dispatches in two wheelers (especially Hero Honda) and relatively weaker trends were visible in the passenger car segment. Two-wheeler dispatches appear strong, aided by strong rural demand, whereas in cars, retail demand continues to be very weak.
Hero Honda, Bajaj Auto & TVs Motors:
Hero Honda dealer dispatches were up 23% YoY. Bajaj’s domestic sales declined 4% YoY, whilst TVS’ domestic sales were very strong up 17% YoY. Hero Honda continues to build inventory levels ahead of the festive season to match demand
Maruti Suzuki:
Domestic sales were up 3% Y/Y driven by strong sales of Swift and Dezire volumes and increase in inventory levels at the dealer end ahead of the festive season in Oct-Nov. Swift sales were up 31% Y/Y. A2 segment declined by 8% Y/Y. Maruti is waiting for the India Babus to get their accumulated Pay Check on Hand so that they can re-launch their Wheels of India marketing campaign again.
Mahindra & Mahindra:
Sept sales rose 17% YoY; driven by strong Utility Vehicles sales (+31% YoY) aided by strong sales of Non-Scorpio segment (+46% Y/Y) which offset weak Scorpio sales (-13% Y/Y). Tractor sales declined by 7% Y/Y.
ECBs Disappointing – BOP as Expected.
India’s 1QFY09 balance of payments played out, more or less, on expected lines. The current account deficit, at US$10.7bn. Notwithstanding a higher trade deficit and FII outflows, other flows continue to be strong. Beyond a robust FDI, invisibles actually surprised on the upside.
The disappointing news is that corporate external commercial borrowings slipped to a paltry US$1.6bn during 1QFY09 from US$7bn during 1QFY08. This reflected, in our view, the double whammy of tight credit conditions. Given that India lacks a local source of project finance, ECBs are critical to financing investment plans. External debt stagnated at US$221bn during the June 08 quarter.
Finally, expect the INR to regain ground in 2HFY09 with most of the adverse factors – risk aversion, oil, and USD strength – likely playing themselves out.