Indian Equity Research and Investment Strategy
A total of 27 companies which were listed during the period have been examined. During this period ~INR 24832 crores has been raised from the primary market. Taking over-subscription into consideration around ~INR 1, 54,449 has been applied for these IPO’s.
On an average these IPO’s were over-subscribed 6.2x while if we remove NMDC (which was the biggest IPO at INR 9966 crores and was oversubscribed only 1X) from the over-subscription list, the over-subscription would go up to 9.5x. (more…)
Even as foreign flows have remained buoyant, foreign ownership has actually dipped…unusual and mathematically challenging, but likely a combination of flow timing (buying at the top, selling low and possibly buying back – it’s called underperformance), capital raising – including large secondary market sales, and insurance company buying…over the year though, within the now fairly stable 16-18% range.
But let there be no two views on this – foreign flows have had a consistently huge impact on the market…the market has tended to (more…)
The earnings season looked tepid – but the headline numbers hide the underlying strength. For example, excluding ONGC, Bharti and RCom, Sensex earnings were up 36%, its best performance in four years. The quality of earnings was also quite strong – net financial income’s share in pre-tax earnings fell to a near 8-year low.
Earnings growth in the broad market (3,038 companies) slowed down (as expected), though it was particularly damaged by the
energy sector (ex-energy growth was at 22%). Earnings at the aggregate level appeared to be in line with expectations — though (more…)
Rolta India Revenues at Rs4.1b were up ~4% qoq (CIRA exp: Rs4.1b) with EBITDA margin expansion of ~100bps qoq (CIRA exp: ~50bps decline). This led to profits at Rs691m, up ~3% qoq vs. our expectations of Rs672m (flattish qoq).
Management has guided for revenue growth of ~12-15% yoy in FY11 with EBITDA margins in the range of 37-38% (FY10: 37.6%). Further, the net profit guidance is in excess of 15% yoy. Though the revenue growth guidance looks muted and is below our (more…)
Tata Motors reported consolidated 1QFY11 adjusted net income of Rs20.3bn vs. Rs6.6bn loss in 1QFY10, and Rs8.8bn profit in 4QFY10 (up 130% qoq). This is significantly ahead of our adjusted net income estimate of Rs12.1bn and implied Bloomberg consensus of Rs10.1bn for the quarter. The company reported consolidated EBITDA margin of 14.3% vs. 3.1% in 1QFY10 and 10.9% in 4QFY10.
The main source of surprise was performance at the JLR division, which reported an adjusted net income of Rs15bn vs. Rs4.8bn loss (more…)
Punj Lloyd reported 1QFY11 PAT loss of Rs306mn, significantly below CIRA estimate of Rs439mn profit. PAT loss was driven by sharp
decline in revenues. 1QFY11 revenue at Rs16.1bn declined 46% YoY and was 36% below CIRA estimate of Rs25bn. Losses would have been higher but for Rs1.28bn (Rs201mn in 1QFY10) other operating income in the quarter.
~38% of order backlog comes from slow moving Libya orders. Continuing execution delays and operating leverage led to EBITDA (more…)