Indian Equity Research and Investment Strategy
After JP Morgan, Citigroup, Bofa Merrill its now Morgan Stanley Downgrading SENSEX EPS Estimates and Target for FY 2014 and 2015. Based on the Broad market earnings growth forecast for F2014 to -6% from 12% and introducing an estimate of 5% for F2015. Morgan Stanley [MS] Cut Sensex earnings growth estimates from 10.5% to 4.1% for F2014 and from 19.0% to 12.7% for F2015.
Morgan’s SENSEX Valuation Model
Base Case [50% Probablity] – SENSEX EPS estimate is Rs 1320 and a Target of (more…)
BofA Merrill was the one of the first Research House which said that the SENSEX Earnings will be tapered to as low as Rs 1260 for FY 2014. Bofa Merrill’s estimates were in as early as April so that left ample time for investors like us sitting with 90% investments in Equities to Book Profits in the Rally but unfortunately we didn’t.
In the aftermath of the Massive Appreciation of USD against Indian Rupee and Decade Low GDP Growth Citi Analysts Questioned the Rationale behind India Quoting at 14 P/E on forward earnings when Bank’s Asset Quality is questionable as the Government (more…)
Citigroup Equity Analysts were the first to come out and boldly question Why Indian Equities which are already overvalued compared to Emerging Economies must Trade at a higher P/E of 14 when the Policy Paralyzed and Lip Service Government is delivering the Worst GDP Growth of Decade ?
Today, JP Morgan Analysts have seconded Citi Opinion in a research report released just a while ago. Their valuation model suggests that there could be downside of another 5-7% (more…)
The Indian Finance Minister Mr. P.Chidambaram came this evening with a “communique” that he thinks the Government must have done [In reality for how long & for how many quarters the Government wants to do Lip Service ?]. Mr Swamy Iyer, Editor at the Economic Times ripped P. Chidambaram apart and raised few questions of which I remember the important ones – Why is the GDP Growth on Downtrend? It has been 12 months for FM in office why the so called Project Clearances have not transformed into Orders and the industry not working on the same ?
In this backdrop, Mr. Iyer told (more…)
FII Mover & Shaker of Indian Market, Citigroup Equity Research has set the undertone of to be Bearish on India. Citi says that India has gone back to its old normal (FY95-03): lower growth, higher uncertainty and yes, lower market multiples
The macro-economic levels: be it its fiscal deficit, which it reduced from 6%+ to under 3% over the 2003-08 period; inflation – which it sustainably reduced to sub 5% in the 2001-03 period; and its currency, which appreciated almost 25% (Rs49 to sub Rs40) over 2001-07. These no doubt (more…)
The market had its 3rd largest 1 day fall in 4 years falling 4% as the Government is Severely Paralyzed. Is the Indian Market Oversold ? Technical indicators including RSI, 200 DMA are getting close to but are not yet at over-sold levels. Fund manager survey indicate sentiment on India is at a lower end of last 12 month trend but not yet at extreme bearishness levels.
The single biggest factor making investors nervous on India is the currency [Well, impossible to stabilize if FII Withdraw at the rate they have done in June & July $10 Bn or Rs 60,000 Cr from Debt & Equity]. A stabilization of the currency would make us as well as investors more positive (more…)