Category: Equity Research

The large size of Indian population is a blessing in disguise for Footwear Retail Chains. It is is treading growth path, backed by benign demographics, rising affordability, increasing incomes and evolving tastes. Organized Retailer control 30% of the Footwear market in India. Bata took the initial lead to expand 8 years ago and has seen the fruits of its investments. Today, we’d like to recommend two stocks in the footwear industry – Relaxo Footwear and Mayur Uniquoters as recommended by Anand Rathi Research in a report. Both Bata and Relaxo are looking at expanding distribution network. Bata is emphasising on tier II/III cities, whereas Relaxo pan India. (more…)

Motherson Sumi a JV of Sehgal family and Sumitomo Wiring Systems has gone from being a wiring harness manufacturer to a broad based auto parts major.

Motherson’s acquisition of Visiocorp in 2009 has helped deliver a step change in scale. The 2011 acquisition of Peguform presents a larger challenge with a higher capital outlay straining the balance sheet. However, the Euro1.6bn revenue base of the business creates headroom for profit growth (more…)

Bajaj Finance (earlier called Bajaj Auto Finance) started operations 25 years ago as a captive unit of Bajaj Auto, a promoter-owned two-wheeler manufacturer with 20% market share in the domestic two wheeler market (as of FY12). In August 2007, post a demerger from Bajaj Auto, Bajaj Finserv became the parent company of Bajaj Finance.

The company has focused on improving profitability consolidating the distribution franchise – rationalizing locations as well as dealer network, Realigning and diversifying products and customer segments; and Reducing risks by strengthening processes and systems and hiring / investing in key personnel.

Strong growth in disbursement and advances of (more…)

JSW Ispat has been merged with JSW Steel. While the transaction will be completed by end FY13, the merger will be effective from July 2012. JSW Ispat shareholders will be issued one share of the merged entity for every 72 shares of JSW Ispat. With this transaction, JSW Steel‟s outstanding shares will increase from 223m to 241.7m.

For Ispat, of the Rs3.5-5 bn of synergies from the merger, Rs2.5 bn is expected to come from interest cost (more…)

Today the market hit a 52 week high. [Follow us on Twitter here] and the question arises to many minds, are we in a Bull Market ? Before we answer the same, let us study what Quantifies and what Parameters Set-in for the Bull market in Indian Equities.

Historically, in our Stock Market, the following three parameters have been determining factor- steepening of the yield curve, expanding profit margins and attractive valuations. Other less important yet required factors are (more…)

Foreign Institutional Investors – FII Investments in India stands at 15.7% is near its historic high. Insurance holdings of Indian equities at 5.9% are at an all time high. Mutual fund holdings at 3.7% are well off the highs though.

Portfolio Strategy
Over Mar-12 to June -12, FIIs increased their holdings in Consumer Staples, Utilities and Health Care sectors, while they reduced holding in Industrials, IT Services and Financials sectors. At the aggregate level, FIIs are currently overweight Financials and Consumer Discretionary and underweight Energy, IT Services and Industrials vs. the MSCI India benchmark. (more…)