Category: Economy, Markets and Macro Views

Fertiliser stocks have been in the news for a while. Much of this has to do with hardening global food grain and fertilizer prices, which have brought the spotlight on Indian fertiliser stocks.Fertiliser consumption to grow at 4% CAGR FY 07 – 12E. Growing at 4% p.a. Low capacity additions expected to lead to a deficit of 5~6 mtpa till FY11E. Firming international prices of fertilizers, making imports an expensive proposition. Positive view on select commodities like Soda ash & Acetic Acid.

Chambal Fertilizers: CFCL has been operating at over 100% capacity for last 4 years. We expect the capacity utilisation to marginally improve and production to compound 2% during FY07-FY10E. (more…)

DSP Merill Lynch has initiated coverage on Aptech Ltd with a BUY rating.The recent sharp 45% fall in stock price on concerns over IT training market is overdone. As the company evolves from a IT training company in India to a diversified training company. The company’s IT training in China contributes 40% to revenue while non-IT services, including animation, aviation and online testing account for 50%. (more…)

WPI inflation continued to accelerate to 7.41% yoy in the week ending March 29, from 7% yoy in the previous week. Inflation is now at its highest level since November 2004, and significantly above the Reserve Bank of India’s (RBI) comfort ceiling of 5%.Minerals prices hastened by 42%, while basic metals rose 20% respectively yoy, reflecting a one-time upward adjustment to WPI prices which have been running up for several months.

Goldman Sachs expects RBI to increase the repo rate by 50 bp in its April policy meeting to primarily arrest inflationary expectations and second round effects. The central bank will encourage further INR appreciation. (more…)

DSPML in a report expects private banks led by HDFC to Outperform the market; top line growth to be weak for govt. banks owing to margin compression and lower loan growth. Private banks should still deliver 25-30% growth. Key risks are to FY09E growth. It estimates this could impact govt. bank earnings by +10-14%, halving the earnings growth to 5-15% from +20-25%. (more…)

Credit suisse in a report released just a while ago continues to be overweight on Indian Infrastructure and Capital Goods Sector except Power Generation.
It has revisited several companies and has set fresh expectations and Target prices.

The infrastructure spend in India to show good growth, with the company targeting 35% YoY growth for FY08 and FY09. Project finance will not be an issue for public sector plays like NTPC and State Electricity boards. However, among private sector players, companies with good execution skills will have a better probability of putting up capacity. (more…)

Inflation based the wholesale price index rose 7% in 12 months to 22 March 2008, accelerating from the previous week’s rise of 6.68%, government data showed today. The rate is the highest reading since 4 December 2004 when it was 7.07%. The annual inflation rate was 6.54% during the corresponding week of the previous year.

As soon as the figures were out, Banking stocks came under selling pressure and the BSE Bankex was down 3.50% at 7,547.04. (more…)