Indian Equity Research and Investment Strategy
Shriram Transport Finance (SHFT) reported earnings were 13% above our estimates (net profit of Rs2.64bn in 4QFY10, 72% yoy growth), both in terms of quality and quantity. NII growth came in at 45% yoy, driven by expansion in NIMs (on average AUM) by 100bp yoy and 46bp qoq, and AUM growth of 25% yoy.
SHFT is attempting to move towards a business model, whereby they leverage their niche franchise to grow faster by securitizing (more…)
JSW reported consolidated net income of Rs6,110mn (+42% qoq) vs. a net loss of Rs399mn in 4QFY09. Net profit was 7% above our expectation and 10% above Reuters consensus, even after adjusting for a one-off forex gain of Rs964mn. For FY2010E, JSW reported net income of Rs15.9 bn (+481% yoy)
EBITDA/t was up 11% QoQ to US$185/t, 4% ahead of our est.. Realizations were up 4% QoQ, marginally below our est. Input (more…)
Indian Stock Market have over the last 10 years (and over 1995-2010 too) had a fairly robust correlation with MSCI- India real ROE. India Inc’s ROE (Morgan Capital Index-India) in FY11 will be 16.7%; lower than its 18-year average, meager when adjusted for Cost of Equity (ROE-COE: 3%).
India’s ROE swings have been driven primarily by changes in asset turn: profit margins, leverage, tax rates, and the cost of (more…)
Reliance Capital’s 4QFY10 net profit at Rs645mn, down 79% yoy on lower capital gains booked during the quarter. Also, we saw consolidation of market share across businesses and cost rationalization. But core earnings have consistently grown during last few quarters (at Rs470mn vs. loss of Rs20 mn in 4QFY09). In particular, life insurance and AMC, (more…)
HDFC Ltd reported net profit of Rs9.3B, up 26% y/y, higher than our and consensus estimates. The earnings surprise arose mainly from higher loan growth and better-than-expected margins (spreads improved from 50bp y/y to ~3.5%). For full year FY10, net profit increased by 24% y/y to Rs28.2B.
Margins even adjusted for the sale of loans to HDFC Bank improved by 20bp to 3.3%. The dual rate loan re-introduced recently would (more…)
The battle for scarce Natural Resource – Gas between RIL’s Mukesh Ambani and RNRL’s Anil Ambani is expected to end with the verdict of APEX Court in the next few days. Lets look into the impact for both the companies.
Favorable result for RNRL – immediate gas as at US$2.34/mmBtu. Assuming RNRL wins a direct verdict (more…)