Category: Equity Research

The market had its 3rd largest 1 day fall in 4 years falling 4% as the Government is Severely Paralyzed. Is the Indian Market Oversold ? Technical indicators including RSI, 200 DMA are getting close to but are not yet at over-sold levels. Fund manager survey indicate sentiment on India is at a lower end of last 12 month trend but not yet at extreme bearishness levels.

The single biggest factor making investors nervous on India is the currency [Well, impossible to stabilize if FII Withdraw at the rate they have done in June & July $10 Bn or Rs 60,000 Cr from Debt & Equity]. A stabilization of the currency would make us as well as investors more positive (more…)

Over the past few years, Equity Research has lost its sheen as it seldom predicts the future course for the market. One such classic case is that in India where corrupt Policy Makers are hardly worried about the Economy and the RBI & Finance ministry unable to control the Vital Economic Parameters resorted to extreme measures of sucking back the liquidity on July 17th and July 23rd. Since then in 10 Trading Sessions, the Banking stocks have been hammered by upto 50% from their 2013 Highs.

Morgan Stanley the mover and Shaker of the Indian Equity Market (more…)

Mahindra and Mahindra Financial Services – MMFSL is a dominant player in rural vehicle finance market. MMFSL has clear advantage vs competition, in that, most competitors have single / fewer product (vs MMFSL’s diversified product offering) or are regionally focused (vs MMFSL’s pan India). Finally, despite slower (~6-10%) underlying volume growth across products. Expect MMFSL to show healthy AUM growth (~30%) in FY14, as it gains market share, with larger distribution in the semi-urban, rural segments and a close-to-customer model and strategic tie-up with other OEM.

Asset Quality Policies like linking a part of employees’ pay to asset quality, (more…)

With the the fall in global commodity prices over the past month, investors have been adding to their positions in India. Majority of investors were slightly overweight India.

Rate cut the Only Silver Lining
The current rally in the market could be attributed as investors position themselves for a faster than consensus rate cut led by (a) inflation falling faster than expected. The WPI data today at just under 5% has borne out this view (b) falling oil and gold prices helping ease the current account deficit worries (c) expectations that the change of RBI Governor would lead to faster rate cuts. Our analysis indicates that there is no clear (more…)