New takeout financing norms – Positive for banks, NBFCs and infra companies (0)

7/31/10 •

ECBs) after the project risks stabilize. We believe this is positive for non-bank finance companies (NBFCs) and banks as it will help them manage ALM risks better and can also earn fees on selldowns. Some investors are worried about domestic credit growth being impacted with this. We do not subscribe to that view because there is a significant requirement for bank funds to finance infra projects and with economic growth, working capital requirements will also be cyclically strong, in our view. We believe rather that it will help banks manage their ALMs better…

ECONOMIC OUTLOOK FOR 2010-2011 (0)

7/31/10 •

The performance of the Indian economy in 2009/10 greatly exceeded expectations. The farm sector which was expected to contract showed resilience, growing by 0.2 per cent despite the weak South West monsoon. The non farm sector also did well. It is the assessment of the Council that the Indian economy would grow at 8.5 per cent in 2010/11 and 9.0 per cent in 2011/12. In the current fiscal year, agriculture will grow at 4.5 per cent, industry at 9.7 per cent and services at 8.9 per cent…

WIPRO: Result Update 1Q FY11 (0)

7/31/10 •

WIpro’s IT services volume growth was in-line with our expectation but way lowerthan peers; however we expect it to catch up peers (in terms of volume growth) from 2Q FY11 onwards. Further, our view of the company gaining ground is corroborated by double-digit onsite volume growth indicating strong momentum in new projects and 6.1% QoQ revenue growth guidance for 2Q FY11 (in US$). Moreover we are impressed by the company’s ability to maintain margins despite decline in billing rate, dip in utilization rate, cross currency headwinds and impact of wage hike (it was effective from February 2010). Considering, strong momentum in new projects…

Analysis of royalty payments in view of Maruti’s margin surprise (0)

7/31/10 •

Maruti delivered a big negative surprise this weekend as Suzuki raised royalty payments by 150 bps from 3.6% to 5.1%. While the impact on Maruti is already discounted (stock down 10% today), we have looked at the other companies in BSE-500 to ascertain the impact on broader Indian market. We find that that 75 (32 of them to foreign entities) companies in BSE500 pay royalties largely dominated by automotive, capital goods, pharmaceuticals and FMCG sectors…

Kotak – Lending biz improves, but all others in a weak spot (0)

7/31/10 •

Lending biz improves sharply, but all others in a weakspot [Dipankar Choudhury, Manish Shukla] Q1FY11 results, which were in line with our estimates on a headline basis, continue to reflect the trends visible for the last few quarters and could sustain for some time. The bank reported consolidated loan growth of 42% YoY driven bysecured retail and corporate lending, and a NIM of 5.7% that was down 40bps QoQ. The bank in their earnings call guided for a 30-35% loan growth for FY11E, which they had earlier estimated at mid-twenties, but also indicated that margins could correct to 5-5.5% despite the capital infusion expected soon…

NSE Bulk Deals – India Equity Market 30th July, 2010 (0)

7/30/10 •

Bulk deal is a stock trading where stock quantities buy or sell by an investor is more then 0.5% of total number of equity shares of the company listed at India stock exchanges.

In year 2004 SEBI bring more transparency to the bulk deals by making is compulsory for stock exchanges to publish intraday bulk deals at the end of the trading day.

Below are current bulk deals at National Stock Exchange of India (NSE):

Bulk Deals in BSE 30th July, 2010 (0)

7/30/10 •

Members are required to make a disclosure on a daily basis up to 5.00 p.m. through DUS (Data Upload software), with respect to all transaction in a scrip for a client where the total quantity bought/sold is more than 0.5% of the number of equity shares of the company listed at BSE…

RELIANCE INDUSTRIES LIMITED: Result Update Q1 FY11 (0)

7/28/10 •

■ Revenues at Rs582bn, higher by 81.7% yoy and 1.1% qoq; much in line with our estimates
■ OPM falls 243bps yoy driven by fall in petrochemical EBIT margins yoy
■ PAT at Rs48.5bn v/s our estimate of Rs49bn
■ Gas production from KG-D6 field continues to be at 60mmscmd;management guidance as reported by media for not being able to sustain production higher than current levels a cause of concern

IPO NOTE: SKS MICROFINANCE LIMITED (IIFL) (0)

7/28/10 •

SKS Microfinance (SKSMF) is the largest microfinance company in India with loan portfolio of ~US$1bn, 2,000+ branches spread across 19 states and 6.8mn members. Its strengths include pan-India presence, scalable operating model, diversified product revenues and access to various sources of capital. Lending primarily to poor women, the business model involves village centered group lending, thereby ensuring a check on asset quality. The hugedemand-supply credit gap and inability of banks to penetrate into unbanked areas have driven the growth of microfinance industry…