Volumes Picking Up Gradually, but We Expect Stress to Remain in FY22E: Recovery is clearly visible from the latest two quarterly numbers, with YoY revenues in Q2FY21 and Q3FY21 coming in at 51% and 74% of the numbers seen in the corresponding quarters in the previous year.

Rural Growth Benefiting RelaxoRelaxo continues to perform well despite the country only beginning to recover from the negative impacts of the pandemic. The Q3FY21 results were above our expectations as rural India rebounded faster

Credit offtake in the economy has turned sticky and is growing around 6% levels for months now. Non-food credit too came in at 5.9% vs 7% during same period last year. YTD bank credit decelerated with gross bank credit growth slipp

Getting Back to Normalcy: Indusind Bank (IIB) reported stable set of numbers. NII growth at 11 percent was below normal run rate due to lower advances growth despite stable NIM. NIM at 4.12 was maintained despite interest reversals of Rs. 1.89 Bn due to funding cost benefits.

Passenger Vehicles: PV makers posted mid-single digit growth during the month driven by filling up of dealer stocks amid supply chain constraints faced by some OEMs due to shortage of semi-conductor chips.

Preferred Prudence to Profitability: Axis Bank (AXSB) s Q3FY21 performance was on the down side as the bankpreferred prudence to profitability.

Beat on All Counts HDFC Bank (HDFCB)s Q3FY21 performance was a beat on all counts. Core operating performance was steady driven by industry-leading loan growth of 16% and 4% YoY/QoQ.

Stress is Showing Up, Valuations are Stretched Kotak Mahindra Bank, (KMB) reported NII growth of 17%/2.4% YoY/QoQ primarily driven by lower cost of funds aided by declining SA costs and higher liquidity available at bank due to recent capital infusion.

All eyes are set on Union Budget to be announced on Feb 1, 2021. This budget session comesat unexceptional times. Amid advance estimates of a contraction of -7.7% for FY21, the onus is on the government to revive the economy on a sustainable basis and instill the confidence in households and corporates alike.

Credit offtake in the economy stabilities at low levels of around 6% YoY in the month of November 2020. YTD gross bank credit growth moved into positive territory. YTD bank credit grew at 0.3% vs. -0.5% during previous month.

Passenger Vehicles: PV makers posted double digit growth during the month driven by filling up of dealer stocks after good festive season and due to low base during the corresponding period. Maruti reported a growth of 20% led by sustained demand for compact segment and utility vehicles. Marutis compact segment grew by 15% even as vans growth continued at robust pace of 47%.

In De-risk Mode: Axis Bank s performance on asset quality front has been volatile and has affected company s return ratios in the past.

A changing business model - BATA in the process of re inventing itself: BATA over the last few years has focused on higher value products and re-inventing itself to cater to the younger and urban population with the aggressive addition of stores and the introduction of red collection and increased focus on women footwear.

Future action to hinge on inflation:We believe that future course of policy action hinges on inflation trajectory.RBI looks to be waiting in wings to cut policy rates once the inflation starts easing. While theRBI was upbeat about the economic recovery despite a GDP

A changing business model - BATA in the process of re inventing itself: BATA over the last few years has focused on higher value products and re-inventing itself to cater to the younger and urban population with the aggressive addition of stores and the introduction of red collection and increased focus on women footwear.

High Valuations Despite Increased Rural Demand and Market Share Gain Possibilities: Footfalls continue to be low as the textile industry continues to witness selectivespecific purchases based on needs in the current economic scenario.

On the technical front, APOLLOHOSP has been making higher highs and higher lows on the daily charts and is currently placed above the medium-term EMAs in the daily frame. In the recent past, after clocking a low of 1986 levels, the stock has witnessed a bounce and rallied to the current levels. At the current juncture, the stock has formed a base of around 1985 levels on the lower side and is all set to move higher.

Realization and Cost Savings Helped Drive Growth: Volumes continue to be robust in rural and semi urban India, which helped sustain overall volume dip to only 4percent despite significantly lower on the go consumption.

Credit Tracker - Stabilises at Low Levels: Credit offtake in the economy continues to remain subdued despite availability of ample liquidity with banks.

Gross Margins - A Positive Surprise: Revenue for Q2FY21 was 7.4percent lower on YoY basis but EBITDA was up significantly,at 21.2percent on account of higher gross margins and good cost control measures.Gross margins were higher by 505 bps on account of lower inventory, tradedgoods and commodity prices.