Indian Equity Research and Investment Strategy
Indian Equity Research and Stock Recommendation
We’ll shortly write an in depth research on the Indian Equity Strategy and the way forwards. However, until then since the market has substantially corrected, rejig your portfolio on the basis of Quality of the Stock.
Equity Stock Picking has changed from Momentum and Growth back to Fundamentals. Buying stocks of companies with high FCF, high ROE, low debt, low beta and low capex to depreciation has (more…)
Global Institutional Investor and Mover and shaker of the Indian Market, Goldman Sachs has upgraded India to OVERWEIGHT in a report released just a while ago. GS likes Indian equities on both a 3 and 12-month basis.
The increase in corporate tax surcharge in the Union Budget would potentially have muted impact on overall earnings. The 130 bp hike in corporate taxes would potentially lower aggregate EPS by only 2%. Earnings revisions and sentiment have been weak lately, but we expect the cycle to improve.
India currently trades at 13.4x forward 12-month P/E and 2.6x book value. Relative to the rest of region, India is also (more…)
A significant pent-up expectation had developed on the eve of the Rail Budget FY14. But we find the budget wanting in a number of areas like rolling stock capex and track-capex allocation (adjusted for DFC and MTP projects). Resource generation will again fall on freight segment which will bear the brunt of hike (~5%) and extra-budgetary support as passenger fares are untouched.
The ministry taking cognizance of a serious shortfall of resources gave resource generation its focus with implementation of Fuel Adjustment Component (FAC) for freight transport. We believe this is a weak attempt to balance the revenue skew, as it was not passed on to the passenger fares which (more…)
CARE Ratings is India’s second-largest credit rating firm in terms of ratings income for FY12. CARE’s total income and profit after tax CAGR during FY08-12 were 41% and 44.3%, respectively. RoE was 30.7% in FY12, and we see it in the high 20s for the next three years.
The key drivers for the CARE’s Revenues are – 1) India’s macroeconomic (more…)
Key Indian Benchmark Indices are up whopping 30% in the last 13 Months. Foreign Institutional Investors have bought total Equity of US$31 billion since then and their ownership of Indian equities has reached all-time highs. In contrast, domestic institutional flows have been negative (US$15 billion).
We can ascertain that one of the pockets where Domestic Investors have redeemed is the Insurance Related ULIPs to the tune of $3Bn in Nov-Dec 2012.. Investors were struck in these non yielding instruments sold by private Indian insurance companies which was a big day time loot and the Indian Government did little while complaints against Insurance Sector Piled up. With rising market, the average Indians (more…)
The Indian Equity Market is just 10% below its all time high of 21,000. Goldman Sachs has already upgraded India to OVERWEIGHT with a NIFTY target of 6,600, which is 5% higher than the previous all time high. If you’ve invested in a Diversified Portfolio of Blue Chips [Nifty / Sensex] stocks, hold them tight as they lead the rally. What next can we do about the CASH we are earning month over month ? It doesn’t make sense to keep BUYING the overheated ones but it takes a little research to identify the next horse which can win the jackpot.
The Theory NIFTY / SENSEX / MegaCap Stocks – Already Appreciated (more…)