Category: Economy, Markets and Macro Views

Hindustan Unilever Ltd – HUL reported recurring PAT at R5bn (+9.7%Y/Y) Despite strong margin expansion (+166bps Y/Y), overall EBITDA rose c17%, as revenue growth was a disappointing 5% – with overall FMCG volume growth of ~1% – despite the lower base.

Market share in both hair and skin remains fairly stable; oral market share [personal wash, skin care and toothpaste] continues to deteriorate. This segment remains the bulwark of profitability. We expect ad spends (as % of sales) to continue to accelerate, as mgmt refocuses on these categories. (more…)

Going forward we expect Volatility in the Movement. There can be sharp downward spikes on intra-day basis and a recovery at the end. As a small investor, how can you take advantage of this spike since you can’t avail this benefit with Mutual Funds which transact on the NAVs on closing basis. You can take Delivery of these units which will be held in your DEMAT A/C. For example, on 31/10/08, Nifty Bees made a Spike downwards and hit a low of 230 and lets since then has more than doubled beating every other mutual fund.

Benchmark Funds ETFs can be of great help. NAV of these ETFs keep moving with the market. The ones available and recommended for investment are – Nifty Bees, Junior Bees, Bank Bees (more…)

Around 139 companies from the BSE 500 have reported earnings and the overall score is – Net Sales increase by 3.3% and Net Profits by 25.3% with NPM expanding to 12.4%.

Autos and cement have performed strongly in sales while Telecom, metals and media are the laggards. When it comes to profit, Banks and Autos lead the chart followed by Pharma. Construction and Infra have seen a decline in profits.

On the back of tepid earnings growth, reforms moving slower than expectations and central bank’s signals on a possible exit policy (more…)

Reliance Industries Ltd reported F2Q10 earnings in line with expectations. EBITDA was up 13% QoQ, 12% YoY; EBIT was up 9% QoQ however down 10% YoY due to higher depreciation which was up 30% QoQ and 92% YoY. Net profit grew 5% QoQ however declined
7% YoY.

Gross refining margins (GRMs) stood at US$6/bbl implying a spread of just under US$3/bbl, despite full commissioning of its new refinery. EBIT stagnated QoQ, and was (more…)

Q2FY10 net profit of Canara Bank surprised on the upside, at INR9.1bn, up 72% y-o-y. Net interest income growth was healthy at 14% y-o-y. Credit growth has been exceeding the deposit growth for many quarters now (unlike at some of the other PSU peers where the trend is the reverse) and is the primary reason for its strong operational performance. (more…)

In its quarterly review today, the RBI left key policy rates unchanged. However, in a move that marks the first phase of exit from monetary accommodation, it raised the Statutory Liquidity Ratio (SLR) by 100bps to 25% effective Nov 7th. Most major impact on the banking sector comes from RBI’s new regulation – real estate loan provisioning from 0.4% to 1% and imposing total provisioning against NPAs at 70%.

In particular, we highlight the potentially meaningful pretax profit and BVPS impact for several banks of the RBI’s 70% minimum loan loss reserve coverage on NPLs.

ICICI Bank requires an increased provisioning of (more…)