Equity Research
Coverage on Indian Fertilizer StocksMarch 12, 2010
Indian Fertilizer sector stocks have recovered due to the allocation of natural gas, which has reduced cost and increased utilization levels of fertilizer plants. Many of these plants ran on expensive naphtha or FO / LSHS feedstock. Closed units are also likely to open due to this cost reduction. The consumption of fertilizers in India is expected to grow by 4% CAGR till FY12. Urea is expected to witness a supply deficit of 5.4mmtpa by FY12. Phosphatic and potash fertilizers also remain matters of concern due to the lack of indigenous raw materials.
De-regulation of Fertilizer Prices – While Urea was under mandatory pricing control under the New Pricing Scheme, Stage-III, the government recommended an MRP for DAP, MOP, MAP, TSP, SSP, Ammonium Sulphate and 11 other complex fertilizers under the Read More »
Thermax Stock on Boil with Babcock – Wilcox JVMarch 11, 2010
The much anticipated JV for supercritical boilers with Babcock and Wilcox was announced on 10 March 2010. The JV (51:49) intends to set up a new 3 GW per annum boiler manufacturing facility at an investment of Rs7.6 bn. Of this, equity contribution from Thermax is anticipated to be Rs1.75 bn. With sufficient cash reserves (Rs7.2 bn in 2Q), even after the Purolite settlement, Thermax should be able to fund capex through internal resources. Read More »
Mahindra & Mahindra + Reliance Infra – Sum of Parts ValuationMarch 10, 2010
Is the sum of the parts greater than the whole ? We wi8ll have a look at looks at discounts to NAV as well as stub values for each holding company. Today we will analyze, Mahindra & Mahindra and Reliance Infrastructure.
Mahindra & Mahindra:
Mahindra & Mahindra rallied late in 2009 on strong auto sales in India before correcting early this year on a 3QFY10 earnings miss. We believe the auto momentum should continue and current stub values are attractive after the correction. Read More »
Indian Markets / Economy & Macro / Sector Research
FIIs India Stocks Strategy – Post Budget 2010March 2, 2010
Post Budget 2010, the Indian markets rallied. However, is the rally sustainable ? Here are the various Strategies adopted by Foreign Institutional Investors – The Major Movers of Indian Market.
Bofa Merrill Lynch – The positive from the budget was that the Finance Minister has laid a roadmap for cutting fiscal deficit with a forecast of 5.5% in FY11 (vs 6.9% in FY10) and targeted capping Government debt to GDP ratio. But Sensex EPS change from budget is practically zero. Corporate earnings growth will be close to 25% in FY11. However, Read More »
Indian Corporate – Rising from the BottomMarch 2, 2010
In December 2009 quarter, Indian companies recovered all the profits that it had lost in December 2008 quarter due to global factors (economic slowdown & liquidity crisis), on back of YoY sales growth of 20%. We will have a look at Sectoral Performance of the Indian industry to get an overview on how the bounce back has been.
Auto Sector is the best performing sector, and illustrated ‘Total Cost Control’. Profits scaled to new peaks, (almost knocked down to zero profitability in Dec-08). Auto Ancillaries displayed similar trend. Read More »
Budget 2010 – Pragmatically progressiveFebruary 26, 2010
The market’s rally post the budget reflects a realistic and progressive F2011 budget. The government is achieving fiscal consolidation program which is positive for earnings growth and market performance. The key risk factors in what seems to be a very strong growth environment are a combination of rising inflation and fragile risk appetite.
Yield curve flattening is likely more certain – the government’s market net borrowing is Read More »
Corporate Earnings News
Lanco Infratech Amarkantak: Unit 2 SynchronizedMarch 12, 2010
Lanco Infratech indicated that they synchronized Unit 2 of Amarkantak power plant and expect it’s commissioning during the next quarter. The synchronization of Unit 2 and consistent PLF for Unit 1 gives us more visibility on commissioning of Amarkantak power project. Further, calculations indicate the cash inflows of Unit 1 (since synchronization in May 09) have so far resulted in 21% reduction in capital cost.
Goldman Analysts expect the stock’s underperformance versus BSE Power index (14% YTD) to narrow in the medium term primarily Read More »
Opportunities in Indian Infrastructure Galore
March 10, 2010
All the infrastructure companies are upbeat on the immense opportunities available in the segment. Reliance Infrastructure, for instance, plans to bid for more road projects. As highlighted in our pre-conference note, private sector involvement in infrastructure development has expanded to ‘non-traditional’ areas such as metro, airports and even power transmission. Lanco plans to ramp up its generation capacity to benefit from the prevailing high merchant power tariffs. Read More »
IPO Reviews
IL&FS Transportation Networks Limited – Subscribe Long TermMarch 9, 2010
IL&FS has been engaged in road sector projects since 1993 as a sponsor, developer or investor. For consolidating its project portfolio in the surface transportation sector, ITNL was promoted by IL&FS in 2000. IL&FS Group currently holds 87.5% in ITNL. Over the years, ITNL has been encouraged to operate as an independent entity and expand its presence in the infrastructure space. ITNL is currently among the largest operators in the BOT roads segment, with over 9,300 lane km commissioned or currently under implementation.
Road Industry Overview – Roads are the dominant mode of transportation in India today, and carry almost 85% of Read More »
NMDC FPO – Company Review
March 5, 2010
NMDC one of the Government’s biggest Asset in Minerals is going for a FPO. Here is an Insight into the company.
NMDC has reserves and resources of 1,360.6 million metric tonnes of iron ore with predominantly greater than 64% Fe content and has been the largest producer by volume in India during the last three fiscal year – the Company’s producing mines are open cast and
primarily fully mechanised. Strong in-house capability to undertake exploration – NMDC is actively involved in exploration and development activities so as to apply for and acquire new iron ore and other mineral leases thereby expanding its reserves and Read More »
Mutual Funds in India
What Top Fund Managers are Buying / Selling ?February 18, 2010
It is true that Indian Mutual Fund industry is very small compared to Insurance and FIIs. However, it is one of the best regulated and somewhat directly under SEBI [Can you believe HDFC was sending their top Agents on a Foreign Trip and SEBI asked if the Agents have disclosed this to their Clients ?] We strongly advise to stick to Mutual Fund Products rather than ULIPS / Insurance Related Equity Products.
Here is how the Top Fund Managers of top 5 Mutual Fund Houses Have Bought or Sold in Jan-2010. Read More »
How does the Mutual Fund Industry Look Like ?January 9, 2010
Total AUM at INR 7.75 tn; assets worth INR 1.47 tn added in October with mere INR 1.92 tn Equity AUM; dipped INR 0.10 tn (down 5%) M-o-M. The ratio of large-cap AUMs to mid-cap AUMs was at 0.83 in October versus 0.85 in September.
Large-cap funds have increased exposure to banking, FMCG, pharmaceuticals, engineering, and reduced it in oil & gas , IT, telecom and cement. Banking seems to be a favourite among large-cap funds. Read More »
Feeds & Updates
