Indian Equity Research and Investment Strategy
Indian Equity MFs AUM, at INR 2.14 tn, accounted for ~34% of total AUM. Aided by the rally in broader markets, equity AUM rose ~4% over the previous month. Sales in existing equity schemes stood at ~INR 40.3 bn in June against ~INR 54 bn in May. New fund offerings (NFOs) of equity schemes of ~INR 10.7 bn during the month.
Total AUM stands at INR 6.3 tn. It dipped by ~INR 1 13 tn over the previous month. Ratio of large-cap AUMs to mid-cap AUMs (more…)
HDFC Robust growth of 62% in new residential loans led to a 17% loan book growth after sell-down of some part of the loan book. While new developer loans data were unavailable, we believe overall disbursements (new loans) grew 25-30% in 1QFY11. Home loan spreads, too, grew from last year to 2.34%. Fees and capital gains are typically lumpy and hence acted as a (more…)
Indian airline passenger traffic came in at 4.57 mn passengers for the month of June’2010 showing a strong 21.4% YoY growth broadly in line with our view. Sequential drop of 4.5% in traffic was on account of seasonality. YTD industry has shown a growth of 23.1% in FY11 at 13.6mn passengers. We expect the industry to show a ~15% growth for FY11, at 53 mn passengers. Seat factors for most airlines (more…)
Tata Consultancy Services (TCS) reported 8.1% sequential volume growth (highest in past 11 quarters), 6.4% USD revenue growth and EBITDA margins at 29.3% (decline of only 60bps) – all ahead of our and Street’s expectations. TCS’ Q1 results have clearly surpassed that of Infosys on multiple counts such as volume growth, large deal wins, pricing movement and operating margin performance.
EBITDA outperformance and lower foreign exchange loss led to net profits (INR 18.4bn) well ahead of our expectations of INR 17.1 (more…)
Anad Rathi has initiated coverage on Ester Industries which produces PET films & Engineering plastic, whereindemand and realizations are moving northwards in recent past. Company’s utilization levels are more than 100% for PET film andlooking to realization trend in last 6 months, this division will be a big money spinner for now. The company is also doubling the capacity of PET Films, which maybe commissioned by the end of calendar year 2010. Engg Plastic division which caters to Automobile, Engg & Electrical segments is also doing well.
Over 80% revenues come from PET films, where (more…)
Large Institutional Investors continue to be bullish on growth and worried about inflation. Buy-side earnings expectations are in line with the sell side. Investors expect modest rate hikes totaling to 50bp for the rest of the year and almost unchanged 10-year bond yields. The Sensex is expected to close the year 10% higher from current levels, although it may hit an intra-year high of around 19,500. About two-thirds of the surveyed investors expect India to continue to outperform emerging markets in 2010 and about half of them are overweight India in their portfolios. (more…)