Indian Equity Research and Investment Strategy
Kotak sec expects weakness in crude oil. There will be likely subdued demand on account of seasonality in 2QCY10, low OPEC compliance and high inventories. However, we do not rule out continued high levels of speculative trading.
In the medium term, given large spare OPEC capacity of ~6 mn b/d over CY2010-11E, significant oil discoveries announced in new areas, increase in OPEC supply, (more…)
>Post Budget 2010, the Indian markets rallied. However, is the rally sustainable ? Here are the various Strategies adopted by Foreign Institutional Investors – The Major Movers of Indian Market.
Bofa Merrill Lynch – The positive from the budget was that the Finance Minister has laid a roadmap for cutting fiscal deficit with a forecast of 5.5% in FY11 (vs 6.9% in FY10) and targeted capping Government debt to GDP ratio. But Sensex EPS change from budget is practically zero. Corporate earnings growth will be close to 25% in FY11. However, (more…)
In December 2009 quarter, Indian companies recovered all the profits that it had lost in December 2008 quarter due to global factors (economic slowdown & liquidity crisis), on back of YoY sales growth of 20%. We will have a look at Sectoral Performance of the Indian industry to get an overview on how the bounce back has been.
Auto Sector is the best performing sector, and illustrated ‘Total Cost Control’. Profits scaled to new peaks, (almost knocked down to zero profitability in Dec-08). Auto Ancillaries displayed similar trend. (more…)
Despite Lyondell Basell being a strategic fit, the bid not going through is a better outcome, as it saves Reliance Industries Limited from getting drawn into a bidding war and thus potentially over-paying for the assets. Also, LB would have added more deep cyclical earnings to RIL at a time when RIL’s gas business is improving the company’s earnings profile by adding a more steady cash flow. If RIL has to add cyclicality in order to grow, we believe E&P makes more sense, either for supply security of its 1.24mn b/d refining capacity or for entry into (more…)
The market’s rally post the budget reflects a realistic and progressive F2011 budget. The government is achieving fiscal consolidation program which is positive for earnings growth and market performance. The key risk factors in what seems to be a very strong growth environment are a combination of rising inflation and fragile risk appetite.
Yield curve flattening is likely more certain – the government’s market net borrowing is (more…)
Here are the Highlights and Live Coverage of Budget 2010.
RBI to give more banking licenses, NBFCs may also be considered.
Kirit Parekh committee’s recommendations on Oil Prices to be taken in due course.
Coal: competitive bidding for captive blocks to be introduced. (more…)