Why Investors like SBI over ICICI ?

There are six main reasons why investors love SBI over ICICI.

  • CASA franchise of 42% provides comfort on margin sustainability for SBI.
  • Asset-liability match of SBI is better
  • Life Insurance: Cost ratios of SBI Life are better than ICICI Prudential Life due to its strong
    bancassurance model and better agency productivity.
  • Asset quality risks persist for both banks, SBI’s loan book is well diversified across a variety of segments; ICICI’s loan book is still skewed towards retail. In the next 18 months the retail segment is likely to be more vulnerable
  • SBI will continue to gain market share in both advances and deposits a ICICI’s expense due to the latter’s strategy of going slow.
  • SBI is trading at 0.94x FY10E adjusted book, while ICICI is trading at 1.0x FY10E adjusted book

Infact we have never liked ICICI Bank. Maybe with the exit of Kalpana Morparia ICICI bank will see some improvement but the aggressive Kamath is still in the Driver’s seat and hence we will avoid it for now.

Ballarpur Industries Results

Ballarpur Industries (BILT) Q4FY08 and FY08 results were in line with expectations. 540 bps decline in EBITDA margins to 21.8% due to revenues from low margin timber sales and cost pressure at BPH due to rising fuel and pulp prices. BUY Company has recently taken price increase of ~10% in coated paper and ~5% in uncoated paper which is likely to improve EBITDA margins by ~150 bps to 26.5% by FY09E as per guidance given by the management.

FY08 net sales increased by 22.1% to Rs 28.3 bn and net profit increased by 17.2% to Rs 3 bn resulting in an EPS of Rs 4.8.

It’s expansion plan at unit Bhigwan to increase paper capacity by 190 thousand mtpa is expected to finish by Nov’08 and at unit Ballarpur to increase paper capacity by 155 thousand mtpa to complete by June’09. This is likely to result in volume growth of ~12%. For FY09 EPS growth is expected to be flat between Rs 4.6 to Rs 4.8

Unitech Spectrum + Inflation at 12.40

The subsidiary company of Unitech has received this allocation of 4.4 Mhz startup spectrum for GSM Operations in the Madhya Pradesh service area.With this, the Company have been allotted initial spectrum in six service areas out of total 22 service areas.

The government has revised the inflation figure for June 21, 2008 as 11.91% against 11.63%. The wholesale price index (WPI) based inflation rate on a week-on week basis calmed down slightly to 12.40% for week ended August 16, 2008, as compared to 12.63% in the previous week.

The inflation numbers declined significantly and went even lower than August 2, 2008 mark of 12.44%, but is still above the Reserve Bank of India’s (RBI) comfort level of 5% for the 27th consecutive week.

The government has revised the inflation figure for June 21, 2008 as 11.91% against 11.63%.

DLF + Sobha Downgrade to Sell – Goldman Sachs

In a report released just a while ago, Goldman Sachs [GS] has downgraded DLF and Sobha Developers to a SELL as a way to book profits in the recent rally from trough of July-1st. GS believes that primary property prices and commercial rentals are yet to witness a significant correction. It may only be a matter of time before developers give in and bring prices down as end-users are bound to be affected by the recent monetary policy tightening. (more…)

Power Sector – A Ray of Hope

You have already that Foreign Institutions are bullish on the Indian Power sector. In this post, I am going to briefly touch upon the reforms [excluding Nuclear Power] and developments in the Global Energy that will impact the bottom-line of Indian companies. The following post will cover outlook of Individual power producing companies.

The big producers of Power are NTPC, Tata Power, CESC, Neyveli Lignite, Reliance Energy, Gujarat Industries Power and state owned electricity corporations. The Ministry of Power has issued LoI to 64 different companies to meet the additional production target of 68,539 MW. Most of these are less than 1,000 MW in capacity powered by Coal [Ya I know its dirty energy, but we can’t help it]. Tata, Reliance and NTPC are developing ultra mega power projects (more…)

1 2 3 8