Indian Equity Research and Investment Strategy
We Summarize the Views of Foreign Institutional Investors the Big Movers and Shakers of Indian Stock Market on the Exit Poll Results.
BOFA Merrill Lynch
Exit polls indicate advantage for BJP-led NDA. Expect 8% return by year-end on the Sensex. Sensex target at 25,500 on stabel Govt scenario. GDP growth likely to recover slowly to 5.4% in FY15. Expect $25bn of portfolio flows to get rupee to 57 – 58 levels. Expect rupee (more…)
After a productive boom period during 2003-2007 with high growth and moderate inflation, India has been facing a stagflation type environment since 2008 with the Corrupt Congress Government at the helm of affairs, and a persistent slowdown in growth alongside high inflation. The agenda driven politicians in Congress caused (a) a sharp increase in rural wages, (b) a high fiscal deficit, (c) a decline in private investment, and (d) weaker external demand.
Worst Is Behind UsWith the progressive BJP Government all set to be installed within the next few days, expect the Structural Growth (more…)
Ahead of the 2014 General Election Results, lets have a peek into how FIIs are positioned in the Indian Stock Market.
FIIs have largely been buyers over the past 8 months. As of Mar 2014, FIIs own 26-27%in MSCI India/Nifty stocks and own c.50% of the free (more…)
Some of the American Foreign Institutional Investors are not convinced about Shri Narendra Modi’s Big victory. Many though seem more confident than we are of a strong government reviving the investment cycle quickly. While it is hard to quantify, this suggests the threshold for market disappointment is not 230-240 seats for the NDA but 210-220.
While some did question if there (more…)
The 4 Mid Caps which are beaten down but still have good operating ROEs and hold potential of an earnings recovery 12 months out. The stocks have been beaten down over the last 4 years but incrementally are reducing debt and sales growth has been positive. EPS revisions over the last 2 quarters too seem to have stabilized albeit at a lower level. Free cash flow is also positive implying scope to de-lever from underlying operations.
Indian Hotels Peak supply in the domestic market in our view is over and a large part of the company’s capex is coming to an end. Any improvement (more…)
Sadbhav’s overall operational projects portfolio could potentially have an equity IRR of about 16% and P/B valuation of about 2X. This is despite the near-term traffic / toll collection disappointments witnessed in the projects, attributed to the broad economic slowdown, and some one-off issues (in Aurangabad-Jalna project).
Sadbhav’s under-construction projects require an incremental equity commitment of Rs 3.8-4 bn, to be infused over the next (more…)