Category: Economy, Markets and Macro Views

In a report released just a while ago, Goldman Sachs [GS] has maintained UNDERWEIGHT on India stating – India has sold down but other markets have corrected as much or more. The growth /inflation /rate /currency tradeoff is less favorable now than it was in 3Q07, when the market began its last bull move. Earnings growth, while good, is not likely to surprise positively.

Goldman Sachs estimates valuation support at 15x P/E, which equates to 20% downside or a range-bound market to end-2008. (more…)

In a landmark judgment, the High Court of Madras [Chennai] has upheld Bajaj Auto’s patent for use of twin spark plugs in an engine of a small bore used in Motorbikes and has ordered TVS Motors not to go ahead with the launch of TVS Flame a bike which is using Bajaj’s technology.

Are you surprised by Bajaj Auto and patents ? Yes, as a company under its erstwhile incompetent laidback Chairman, Rahul Bajaj, there was no place for innovators. Things don’t work the same anymore under Rajiv, who is a hands on person and thus the changes you see in India’s Motorbike industry. In fact, Harvard Business Review had a case study on Rajiv Bajaj for transforming incompetent legacy business. (more…)

It was another day blood bath on the street – Day of Rumors, Losses and continued selling from Foreign Institutions. If you are sticking to VALUE INVESTING, then you don’t see the PANIC button. However, if you have been speculating, let Lord save you.

CNBC TV-18 which rose to fame with rising market and its worthless reporters have some Global Chameleons as hosts – presenting Shankra Sharma of (more…)

The markets are concerned about the negative impact on India’s economy if the US is thrown into a severe recession, but for now that remains an “if”. The RBI is focusing on a domestic economy that still has strong growth momentum and rising inflation risks.

India’s growth is set to moderate in 2008. US will avoid a full blown recession but is likely to witness an extended period of lackluster growth. This is likely to hurt India’s exports, most notably exports of services, of which about 60% depend on US demand. (more…)

Punj Lloyd took a hit on its bottom line last quarter due to project delay and cost overrun. However, the markets have reacted more than necessary considering the strong order-book the company enjoys.

Punj Lloyd’s management expects to settle these losses once the projects get over by March-April 2008. In that case, losses may get reversed. Kotak expects blended operating margins to be around 9% in FY08 and expect it to improve to 10.3% in FY09 and 11% by FY10. (more…)

The days if unidirectional views on a stock are over. More confusion lies ahead as one fund Manager recommends a BUY and other recommends a SELL.

Shoppers Stop posted Q3 FY08 EBITDA at 4.3%, showing that margin pressure continues to be the most important concern for the stock. Higher operating costs (employees, rents) have taken a toll on margins, and we are now estimating 5.7% EBITDA margin in FY09E from previous 8.6% expectations. (more…)