Indian Equity Research and Investment Strategy
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Does HDFC AMC deserve High Valuation ? Review
Valuation of Indian Markets & Relentless FII Selling
Why Indian StockMarket Quoting at High P-E ?
Why Value Investing Does not Work in India ?
Mastek Ltd has informed us about their Oct-Dec 2008 quarter results. The Total Income up 19% year-on-year at Rs 256 cr – PAT for quarter up 16% year-on-year at Rs 31 cr.
The Board of Directors have declared an interim dividend of Rs 2.50/- per equity share for the financial year 2008-09.
More updates to follow.
Inflation continues to come down even as monetary authorities follow a liberal credit policy to halt the slowdown in economy. The wholesale price index (WPI) registered a decline of 0.3% to 229.5 for week ended December 27. Rate of increase in prices or inflation stood at 5.91% in the said week compared to 6.38% in the previous week.
The decline was visible across all the segments. Manufacturing index was down 0.3% week-on-week while Primary articles were down 0.5% W-o-W. Meanwhile the inflation figures for week ended Nov 1 was revised to 8.7% versus 8.98% (provisional).
Inflation has taken a much steeper trajectory on its way back compared to what was being anticipated by most economists. Reserve Bank of India (RBI) was targeting to bring inflation down to 7% by end of 2008 while the current figures are substantially lower than that.
Economists expect inflation to continue its falling rapidly in coming weeks due to lower base effect of last year and decline in excise implemented earlier in December trickling down.
JP Morgan equity research upgraded India to neutral from underweight. They were underweight on 18 January 2008 due to expensive valuations, high earnings growth expectations, rising inflation, high borrowing costs, weak currency and widening twin deficits. Many of these factors have now reversed. Monetary and fiscal policies have turned significantly pro-growth.
Over the past few months, RBI and the Government has taken measures to control the inflation [though Food Prices are still high] and ensure credit flow to the productive sectors rather than fuel a bubble in Real Estate and restructure debt where needed. (more…)
Drug major Sun Pharmaceutical Industries along with its subsidiaries has secured its first US Food and Drug Administration approval to sell the generic version of a controlled substance in tablet form and has also received final approval from USFDA for the various Abbreviated New Drug Applications (ANDA).
The company has received the approval for Hydrocodone with APAP, its first approvals for product based on controlled substances.
The company has also received approval for generic versions of cholesterol-fighting Lopid, Aredia, used to treat high blood calcium, and anti-allergent Phenargen in multiple strengths.
Sensing Trouble or whatever, some smart fund managers sold Satyam Computers. HDFC Tax Saver and HSBC Equity completely exited their positions in Satyam as on Dec-31st 2008. HDFc Long Term Advantage Fund reducedi ts esposure but didn’t completely exit Satyam in Dec-08. IDFC and Kotak fund managers also completely exitted Satyam in Dec-08.
However, HDFC Top 200 and HDFC Equity funds increased their exposure to Satyam [less than 2.5% of total assets] in the month of Dec-08. Both th funds are managed by Sr. fund Manager Prashant Jain. In the last 12 months his over aggressive investment bet on ICICI Bank has already led to the under performance of both of these funds compared to Reliance Growth Fund.
However, we need to take a macro view on the fund and the management before taking any extreme decision of switching like Dhirendra Kumar recommends. Here is Satyam’s complete holding picture by Domestic Mutual Funds.[PDF]
Update on Feb-5-2009:
HDFC Mutual Fund has sold 50 Lakh Shares of Satyam Computers on Jan-2nd. So the loss from Satyam is negligible in the funds we recommend. Economic Times of Feb-05 carries an article on who all sold Satyam before Jan-7th when the stock crashed.
PriceWaterhouse Coopers – PwC India is the Auditor of Satyam Computers which let the $1 bn scam happen under its nose.
Some of the companies mentioned below might come under pressure as they have Auditor as PwC.
Colgate Palmolive, Coromandel Fert
Cummins India, Gateway Distpark
GlaxoSmith C H L, GMR Infra.
Graphite India, HCL Infosystems
HCL Technologies, Hinduja Ventures
Info Edge (India) ,Infotech Enterprises
Ingersoll-Rand, Jagran Prakashan
Kesoram Inds, Lanco Infratech
Marico, Maruti Suzuki
Mastek, Max India
Moser Baer (I), Motherson Sumi
NDTV, NIIT, NIIT Tech.
Piramal Healthcar, Religare Enterprises
Satyam Computers, Simplex Infra
United Breweries, United Spirits
UTV Software & Co, Glenmark Pharma and Novartis India.
