Dalal Street :: India Equity Research, Investment Analysis

MIC Electronics – Review

November 24, 20082 min read

MIC Electronics is the only listed / organized player in the LED segment with capabilities in multi color display boards and LED based lighting solutions. MIC has competencies in the design, development and manufacture of LED Video Displays, high-end Electronic and Telecommunication equipment and development of Telecom software since 1988. The company is a technology driven design-to-manufacture player with an early mover advantage and an established clientele. MIC offers a cost effective means of communicating with a longer shelf life than the traditional means of advertising through billboards. (more…)

Breaking Corporate India Earnings News

Real Estate – The Picture on the Street

November 24, 20081 min read

Real estate demand in the residential vertical has been badly hit due to high prices and poor affordability.

Buyers Sentiment in Realty:
Buyers are shying away from new projects or under construction projects, where project delivery is more than a year away. This is because – buyers are optimistic that prices have to correct further in the near term, and they lack confidence in the developers and the developers’ ability / intention to construct and deliver the project on time.

Reality of Indian Realty List Prices:
The list prices quoted by developers for under construction projects have little meaning today as no few deals are concluded at the official list prices. Deals are happening at 30-50% discount to list prices. However, developers are not officially lowering list prices, as they believe that taking such measures may not necessarily result in any incremental demand from home buyers, but developer himself will be impacted due to the negative outlook on prices and weak sentiments.

Standard Chartered – BKC Deal which happened at a 30% discount to the last deal reported in Bandra Kurla complex has led to re-negotiation of lease rentals / rates in the Commercial property segment across India.

Economy, Markets and Macro Views

Merrill Continues to be Bearish – Big Rally in Late 2009

November 21, 20083 min read

Merrill Lynch continues to be bearish on India mainly due to slowing economy hurting earnings and the uncertainty of general elections as we move towards the summer of 2009 [Q1-2009]. Economic news should continue to adverse through most of 2009, expect equity markets to recover in 2HCY09. Markets have typically given a over 30% return from its bottom and we could see such a rally start towards Q4CY09 led by – liquidity, lower inflation and fall in interest rates. This is the time when earnings downgrades will be behind us and the earnings revision ratio bottoming out.

Merrill Lynch expects the Sensex to hit 7000 levels in 1QCY09 as earnings get downgraded and drag valuations to historic lows of below 8x PE. Expect FY10 to see a flat to negative EPS growth which would bring Sensex EPS to the 850-900 levels. (more…)

Equity Research

Astra Microwave Products – Review

November 21, 20082 min read

Astra Microwave Products – AMPL designs, develops and manufactures components and sub-systems for microwave wireless communications systems used in defense, space, and civilian telecom applications. Around 60% of revenues accrue from Defense, 30% from Space and the balance from Telecom. AMPL has 4 state of the art manufacturing facilities. AMPL is expected to be a key supplier of sub-systems for all of India’s future missile/radar/electronic warfare development programs. (more…)

Economy, Markets and Macro Views

Reliance ADAG Stocks Fall Freely – Where are the Businesses headed ?

November 20, 20083 min read

Reliance ADAG Group stocks have been under a Free fall Mode ever since the correction started. LIC the God Father of Indian Stock market did what it could to support but it has likely given up. We guess that not many investors have the confidence in the younger scion of the Ambani family, not even the FIIs [Reliance ADAG Group Stocks are not in FIIs Top-15, while RIL is at Number One] who like flamboyant CEOs, but bottom line matters when it comes to Investing.

We decided to conduct the performance of Reliance ADAG stocks in the past 10 months and they have been performing terribly bad, but (more…)

Breaking Corporate India Earnings News

Loan Growth – Who is Borrowing ?

November 20, 20081 min read

This must come as a surprise to most of our readers as India’s loan growth is accelerating; 22% yoy in Jan-08, which has climbed to 28% currently. But, with a slowing economy, where is this growth coming from ?

RBI data suggests that, Large and medium corporates are borrowing most aggressively, consumer and agriculture are lagging industry growth, while small businesses make up the rear, with negative growth YTD. [This is really bad, Small businesses should be given an opportunity to Grow]. Excluding Oil companies, loan growth remains high at 27% yoy.

Loan Growth is a Big Risk:
The fastest-growing sectors – real estate (46%), construction (56%), iron & steel (34%), credit cards (90%) and financial companies (46%) – are also probably the most risky ones. Infrastructure loans also strong (36% yoy), but have moderated in 2Q09 (3% qoq). While rising loan momentum in the face of falling economic growth / Industrial production data sits uneasy, the sectoral bias of this growth suggests even more caution.

Can Indian banks recover the loans lent to Real Estate and Credit Cards ?

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