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Larsen & Toubro – Best Bet on Infrastructure Recovery

February 12, 2015

Larsen Toubro Poised for RecoveryLarsen & Toubro – L&T reported weak results with standalone revenue growth of 4.2% versus expectations of 7.5%. EBITDA margins contracted YoY to 10.5% from 11.6% in 3Q FY15 ostensibly on job mix and some orders not crossing the margin recognition threshold.

While L&T, in revenue terms, is larger than India’s next six largest construction companies put together, owing to the fragmented market (L&T’s market share Read more

Which Stocks Will Benefit from Mission – Namami Ganga of NaMo ?

November 24, 2014

Clean River GangaThe River Ganga is considered amongst the holiest rivers in the country with thousands of pilgrims thronging its banks to take a dip. However, the river today holds the infamous distinction of being the fifth most polluted river in the world. The narendra Modi led government has promised to clean up the river and wants to complete the same over the next decade by spending Rs510bn on setting up sewerage plants in 118 towns and villages.

Sewerage treatment opportunity to Clean Ganga
Daily sewerage being generated by 50 cities Read more

Kotak Bank to be 4th Largest Private Bank after ING Vysya Merger

November 21, 2014

Kotak 4th Largest Private BankKotak Bank will offer 725 shares for every 1000 shares held in ING Vysya Bank. The swap ratio at current prices implies a valuation of Rs159 bn for ING Vysya Bank (2.1x Sept- 14 BV) and is 2.6% higher than its last closing price. The good part is that Kotak is using its expensive stock currency (4.3x trailing book) to buy an asset at 2xBV. However, lower RoE for ING Vysyawill deplete the RoE for the combined entity and Kotak will have to grow fast to improve RoE over time. The deal will result in 18% dilution for Kotak Bank at current prices.

Kotak Bank will induct one member from ING Vysya Bank on the board of the merged entity. Kotak Bank intends to keep one savings account interest Read more

Hold Indian Oil, Gas Energy Companies

October 24, 2014

Indian Oil Gas CompaniesThe BJP Government led by Shri Narendra Modi has taken some bold decisions in the Oil & Gas and Energy sector. Retail diesel price deregulation, providing predictability to improved cash flows of oil marketing companies (OMCs), setting the sector up for better marketing margins and private-sector competition, 2) Two-tier natural gas pricing with 47% rise in price of current production to US$6.19/mmBtu (from 1 Nov 2014 with 6 monthly review) and other incentives for future gas discoveries from the more expensive types of projects and finally, direct cash subsidy transfer to retail LPG consumers by June 2015, further improving OMC cash flows Read more

Indian Private Banks Should Rally Further – BUY

September 22, 2014

Indian Banking Stocks RallyA Rising Tide Lifts All Boats so it was True with Banking Stocks. Indian banks are up 42% YTD – the key driver being growing confidence in the economy, hence better asset quality.

The first leg is driven by expectations around better asset quality. As tail risk recedes, stocks move sharply to normalized multiples – that has Read more

SENSEX Valuations at Peak – What Retail Investors Must Do ?

August 19, 2014

Breaking News - ExclusiveIndia continues to trade at a premium to the region, but given its stronger growth expectations under Narendra Modi (#NamoBullRun), it seems well placed on a PEG basis vs. peers. Most market indicators also indicate valuations FAIRLY PRICED with NIFTY quoting at 7,900. With a firm government in place, we think the implementation of reforms could jumpstart earnings in coming years.

Which Sectors of NIFTY Have Reached Peak Valuation ?
Out analyst has beautifully constructed Read more

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