April, 2012 | Dalal Street

Equity Research

HDFC Bank Sailing Smooth as Ever – Rating Must be Higher than Sovereign Rating

April 20, 20122 min read

This is one Company and Group [HDFC] which is very cautiously managed yet Grows above its Sectoral Average and Deserves a Rating Higher than Government of India’s Sovereign Rating. No Kidding!

HDFC Bank reported 4Q earnings of Rs14.5bn, up +30% yoy led by topline and lower provisions, as asset quality continues to remain comfortable. Topline grew +19% yoy driven by 22% loan growth and margins holding-up at 4.2% yoy on rising share of retail loans. CASA remains high at 48.4%. Core fee income grew +24% yoy, ~85% from retail. (more…)

Equity Research

MindTree – Impressive Margins in FY2012 – Sustainable ? Differing Valuations

April 19, 20123 min read

MindTree reported modest results for 4QFY2012, with OPM and PAT coming in ahead of expectations. The company reported a 4.9% qoq increase in volumes. MindTree reported revenues of US$105m (+1.3% qoq, +22% yoy). EBIT margins surprised positively and improved to 15.5% (+161bps qoq, +895bps yoy). Net income grew to Rs689m (+14% qoq, +115% yoy).

Management Outlook: While the recent weeks saw deterioration in the spending environment and management expects lacklustre growth for 1HFY13, it (more…)

Economy, Markets and Macro Views

RBI Cuts Rate More than Consensus – Will Banks Pass on to Consumers ?

April 18, 2012April 18, 20202 min read

Given the unique growth-inflation dynamics of Indian Economy, the RBI was expected to ease rates for the first time in three years. However, it surprised positively – cutting its key policy rates by 50bps – higher than expectations of a 25bps cut. The repo and reverse repo rates now stand at 8% and 7% respectively. The cash reserve ratio (CRR) was left unchanged at 4.75%.

What is Beneficial to the Banks ? The RBI raised the borrowing limit (more…)

Breaking Corporate India Earnings News

High Scrutiny of Infosys / TCS H1-B Visa + Jack Plamer Interview on CBS against Infosys

April 16, 20122 min read

Infosys’ disappointing performance has raised multiple concerns around the demand environment and the competitive landscape of the IT services industry.

The increased visa scrutiny from the US, leading to delays and denials of visas, has been a reality for a while now, but has not impacted companies’ growth momentum by much. The CBS interview on 13 April with estranged Infosys employee Jack Palmer has attracted much attention (more…)

Breaking Corporate India Earnings News

India’s March Inflation at 6.89% – higher than estimate

April 16, 20122 min read

The Ruling Congress Government doesn’t seem to get the Inflation Fixed despite a slap on the face in the recent State Elections of Uttar Pradesh.

Annual Inflation for March came at 6.89% compared with 6.95% for the previous month and was higher than consensus of 6.65%. The rise in WPI in March is mainly a result of rise in primary articles prices. On the positive side, manufactured product inflation fell sharply to 4.87% from 5.75%. (more…)

Equity Research

Is MCX the Leading Commodity Stock – Fully Valued ?

April 16, 20122 min read

MultiCommodity Exchange Ltd a Monopoly exchange in its own way in the Indian Commodity Segment listed with a appreciable premium [Read our MCX IPO Review here] and is all set to enter the Equity Trading Segment to get a slice of market from the National Stock Exchange.

Business of Commodity Exchnages in India: Commodity exchanges distinct from stock exchanges with a separate regulator; Multiple competitors (five national exchanges); Closely regulated list of products and participants; and Pricing is low and based on turnover rather than number of contracts. (more…)

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