CP | Dalal Street

HDFC – Consistent Wealth Creator

January 17, 2011January 17, 20112 min read

HDFC reported F3Q11 PAT of Rs 8.9 bn (+33% YoY / +10% QoQ) This was higher than estimate of Rs. 8.2 bn though it included capital gains (pre-tax) of Rs 1.67 bn [Sale of IL&FS Investment]. Headline loan growth accelerated to 20.6% YoY from 18.7% in the previous quarter and adjusted loan growth (i.e. including sell-downs) picked up to 27% from 24%.

Housing Loan Growth – is picking up for HDFC Ltd after being subdued for most part of last year. Balance sheet loan growth has picked up from 9% YoY in 3Q FY10 to (more…)

Equity Research

Rising Interest Rates Impact on Automobiles

January 17, 20112 min read

With Inflation refusing to calm down, the meek RBI Governor is expected to take some bold steps in the forthcoming Policy Review on the 25th. In expectations of some hard monetary measures, the Auto Index has fallen by 10% since the beginning of Jan-2011.

The auto sector will not escape the impact of slower economic growth, which may be the collateral impact of interest rate hikes, we set out to isolate the real impact of interest rates on auto volumes. Auto volumes in the consumer-driven segments (cars and two-wheelers) are historically correlated much more (more…)

Economy, Markets and Macro Views

Manomhan’s Measure to Tame Food Inflation – Unacceptable

January 14, 2011January 14, 20112 min read

The Indian Government headed by the Weakest Prime Minister in the History, Dr Manmohan Singh shed Crocodile Tears on Rising Onion and Vegetable Prices by announcing slew of measures which will not have any long term impact on the Food Inflation.

The Government said that Onions, including imports from Pakistan, will be sold through agricultural co-operative outlets at nearly (more…)

Breaking Corporate India Earnings News

RIL’s KG D-6 Fishing in Troubled Waters

January 14, 2011January 17, 20112 min read

As per an industry journal (Indian Petro), RIL has informed DGH that it will not be able to ramp up gas production from its KG D-6 block beyond 50 mcm/d until FY2014E. The company has highlighted that there are some serious reservoir issues including water ingression in wells, sand interference and pressure depletion.

This development, if confirmed, poses a risk to Reliance’s earnings (more…)

Equity Research

Sintex Results – Good Quarter – Concerns Remain

January 14, 20112 min read

Sintex reported 3QFY11 consolidated EBITDA at Rs1.96 bn versus our estimates at Rs1.77bn. The outperformance has come on the back of higher execution (Rs11.86 bn vs our estimates at Rs10.69 bn) against our estimates. The EBITDA margins in 3QFY11 at 16.6% are exactly in line with our estimates. We see incremental risks and any rally on the back of good news/results should be used to pare down exposure.

The outperformance on the execution front has (more…)

Equity Research

Infosys Results Disappoint – Muted Guidance

January 13, 20112 min read

Infosys reported Q3FY11 below expectations. Revenues grew 2.3% QoQ in Re and 6% Q/Q in USD terms (4.7% in CC) driven by 1) 3% Q/Q volume growth (vs. 7%QoQ expectations), 2) offshore pricing improvement of 2.6% QoQ (1.6% blended QoQ) and 3) cross currency benefits. Margins were flat QoQ despite currency headwinds, led by improvement in pricing. The weaker-than-expected revenue and 4Q topline guidance will result in lower exit rate on revenues going into FY12.

Pricing improved 2.6% offshore (1.4% CC), 2) Reported attrition was (more…)

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