CP | Dalal Street

Jagdish Bhagwati & Arvind Panagariya – Write Economic Policies of Narendra Modi

February 20, 20143 min read

Two star economists with a free market bent – Jagdish Bhagwati and Arvind Panagariya – appear to be the intellectual godfathers of Progressive BJP led NDA’s forthcoming election manifesto. These gents have published a book in 2013 – India’s Tryst with Destiny – in which they have criticized the UPA’s redistributive policies (Food Security Act, NREGA, etc), declared their fondness for the “Gujarat model” and advocated an economic renewal program centred on cutting universal subsidies, reviving spend on infrastructure, reforming India’s antiquated labour laws and reforming the country’s higher education system.

Both professors have steadfastly supported Narendra Modi in the domestic and international press. Whilst they deny having any official role (more…)

India IPO Reviews and Updates

Subscribe to PowerGrid FPO at Cut-Off

December 4, 2013December 4, 20132 min read

PowerGrid Corporation of India’s FPO is an attractive opportunity to own the fast-growing (19% net profit CAGR in FY13-17) near monopoly regulated power utility with stable RoEs (~16% in FY15/16). Whilst 10% equity dilution at Rs90/share was the ideal scenario, the 13% dilution at Rs85 (the lower band of the FPO) would raise enough equity to meet the equity needs up to FY15E/16E capex. The allowed return on equity in 2001-04 and 2004-09 was 16% and 14%, respectively. The CERC increased the regulated RoE to 15.5% + 0.5% incentive for timely completion of the projects.

After aggressive bidding in the initial eight (more…)

Breaking Corporate India Earnings News

Corporate India Cautious – No Pick up in Investment Demand Yet

November 27, 2013November 27, 20132 min read

At the CLSA India Conference, Indians Corporates appeared to be cautious and most highlighted weak consumer demand as a near-term headwind. The cautious view was emanating from the belief that the market has already factored in, partially, the strong outcome in the elections.

Weak Consumer Sentiment
10 companies from consumer staples & retailing appeared cautious on the near term growth outlook citing weak consumer demand partially (more…)

Equity Research

Credit Suisse Outlook for Indian Equities in 2014

November 25, 2013April 18, 20202 min read

The Indian markets will be driven by politics and developments around the “taper” to drive the market in the first half of 2014. Both will have limited impact on fundamentals, but market sentiments will still get affected. Their research suggests almost no correlation between the extent of government fragmentation at the centre and growth / market performance.

Investment Cycle Broken
They foresee the investment cycle staying broken for the next two to three years and middle-income consumption to stay under pressure as inflation and stagnant (more…)

Breaking Corporate India Earnings News

NSE Nifty in Long Term Trading Range

November 12, 2013November 12, 20131 min read

The Nifty has been ranging for over two-years, the ranging pattern is roughly 40% (or 1,800 pts) wide. When the market finally breaks out of these ranges the minimum expectation will be for a 40-50% advance.The most dynamic price moves occur when markets emerge from a prolonged period of sideways trading. The longer the time spent ranging the greater potential of the ensuing breakout. However, with the Nifty in US dollar and relative terms nowhere near breakout levels we are not expecting the Nifty to record a sustained breakout at this time. (more…)

Equity Research

Goldman Sachs Upgrades India on the Back of Narendra Modi as CEO of Govt of India

November 5, 20132 min read

The Sanctity of Highly Paid Equity Research is – It Follows the market and never Leads 🙂 At a time when all the Star Analysts Downgraded India, the market rose very sharpy. And this time around, Goldman Sachs Star Analysts, Timothy Moe, Sunil Koul and Team have upgraded India to MarketWeight from Underweight.

The Report said that there exists optimism in the political front, led by BJP’s prime ministerial candidate Mr. Narendra Modi. External Pressures have moderated according to Goldman and early signs of cyclical pick up and structural improvement. (more…)

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