Category: Economy, Markets and Macro Views

Punjab National Bank (PNB) reported strong Q2FY09 numbers. Net profit was up 31% y-o-y to INR7.1bn and was better than our estimate of INR5.9bn. Key highlight of the result was the net interest income growth at 31% y-o-y, the highest since March 2006 and closely matching the pace of private sector peers. Loan growth too, at 29% y-o-y, for the first time moved above the sector average, having underperformed the sector for the past eight quarters.

Opex grew by 11% yoy (6% higher than MLe) as the bank provided Rs1bn towards impending wage revisions (v/s. Rs250mn in 1QFY09). Asset quality concerns have reduced significantly with gross NPAs declining by 4% qoq to 2.4%. Net NPAs too decreased 24% qoq (at 0.4%). (more…)

Punj Lloyd (PLL) announced its consolidated results; revenue was up 54% at INR29.5bn (our estimate was INR25.9bn, consensus estimate INR26.2bn). Net profit was up 61% to INR1.44bn (our estimate INR0.84bn, consensus INR1.1bn). A large part of the order inflow of INR56bn in 2QFY09 was driven by the INR36.4bn EPC order by Qatar Petroleum.

Management continues to be confident given the robust backlog of Rs217bn (1.9x FY09E sales). The company has minimal exposure to real estate and most of the clients are government companies. (more…)

Reliance Communications and Bharti Airtel both reported their Q2 numbers and here is a brief comparison on the same.

RCom reported 2Q FY09 net profit at Rs15.3bn, up 17% YoY and flat QoQ; reported results were boosted by ~Rs919mn of one-time income from FLAG arbitration. Adjusting for this, RCom’s EBITDA margin fell ~250bps QoQ to 39.8%.

High debt levels (~70% of which is forex debt), possible pressure on EBITDA margins from network expansion and increasing competitive risks in the Indian telecom sector remain key risks in our view. The Co continues to capitalize (MTM) losses (~Rs23bn) on its forex exposure. (more…)

If you have been a regular reader here, you would have noticed by now that we always believe in “VALUATIONS”. Just to enlighten our readers, we are presenting Historical BSE SENSEX Forward P/E Chart from 1990 through Sept-2008. The Forward P/E is quoting at its lowest level ever as shown below.

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This is the last post in the series. You can read the first two here. Historical Bear market Returns in India and Concerns / Risks the Indian market offers and how they are mitigated.

Domestic Fundamentals:
Household savings are at a robust 35% of the GDP and consumers in India are highly under leveraged at 8% of the GDP compared to 13% in Thailand, 26% in Malaysia, 36% in Taiwan and 58% in Korea. Over the years Indians have amassed huge wealth in Gold and equity market investments, which has a wealth effect. (more…)

This is the second post in the series of three on why one can dare to BUY the Indian market now. If you have not already read the first part, its here – Historical Returns in India after Bear market.

As an Indian investor what are the prime concerns weighing (more…)