They say one ends up over eating at a buffet because of being spoilt for choices. The recentlyconcludedspectrumauctionsareanexampleofthetelecomoperators'insatiable appetite the government put out all the available bands and spectrum up for auction and the operators went to town buying it all up. The saving grace was thatnooperator submitted bids for the ultraexpensive 700MHz. All have bought spectrum that is more than their current requirements. Jio, which is just days into the launch of its operations has added capacity spectrum. With this significant addition of data spectrum, all operators are now battleready. The scramble for capacity spectrum and the ensuing...
As of August 2016, IR had Rs 4,366bn (US$ 65bn) of pending projects, announced and/or awarded, but pending completion; 83% of these are construction related (new lines, doublingandgaugeconversion)whiletherestareroadsafety,signalling&telecom;,andIR's investmentsintoitsproductionworkshopsandmetroprojects. Constructionrelatedprojects:61%unbankable,48%WIPfor>5yearsduetonewlines InFY15,IRreduceditsthresholdrateofreturnto12%from14%earlier;despitethat,61%of its pending construction projects remain unbankable. Key reason for this is the slow...
that 4% CPI is now a fiveyear target vs. the 2018 timeline set during Dr. Rajan's governorship.We view this positively, asbringing CPI down to 4% in the nearterm was aggressive for India, because it suffers from supplyside constraints. The longer timeline will ensure easy monetary policy, low interest rates, and stimulus for economic growth. WeawaitmoredetailsontheinflationtrajectorythatRBIaimstoachievebeyondFY17to formanopiniononquantumanddurationofmonetarypolicyeasing.Fornow,thecurrent monetary policy regime seems reasonably dovish vs. the previous one. Commentary on growthismixedanditispositiveoninflation.Riskstobotharewellbalanced,saysRBI....
In Q2FY17, we do not see a major revival in growth for most consumer companies as the factors responsible for sluggish growth in the last few quarters, like rural stress, liquidity crunch, and subdued macro-environment, continue to impact growth. For consumer companies (ex-Nestle), we expect topline to grow by 8% yoy in Q2 vs. 5%/5%/6% in the previous three quarters and bottomline to grow by 11% vs. 9%/7%/10% in previous three quarters. We believe that the minor improvement in growth rates will be due to a favourable base for companies impacted by excise benefit cessation in FY16, mild revival in ITC's cigarettes business, and gross margin expansion for categories consuming cruderelated raw materials....
dominating position in the 2W casting segment with a 33% market share and holds 14%/22% share in 2W braking & transmission/suspension segments. It generates 70% revenues from India (mainly 2Ws) and 30% through its European subsidiaries (PVs). We recommendsubscribingtotheissuedespiteloftyvaluations,aswelikeitsbusinessmodel coupled with the scarcity premium for quality companies to play the segmental opportunities it offers. We see strong structural growth potential led by high exposure to segments that are primed to benefit from changing consumer preferences and regulatory changesleadingtohighercontentpervehicleandrecoveryin2Windustrysales.Asperour...
INDIA | IT SERVICES | Q2FY17 Results Preview We expect 2QFY17 to be a lacklustre quarter for Indian IT companies, considering that it is traditionally the strongest quarter for the industry. Sharp cross-currency movement (particularly GBP post Brexit) and client-specific issues will drag revenue growth for almost all companies. We expect large-cap companies to report CC revenue growth of 0.4%-3.3% and 50-100bps negative cross-currency impact. Margins are expected to expand for Infosys and TCS and contract for Wipro (wage hike), HCL Tech (wage hike), and Tech Mahindra (restructuring cost). Management commentary will be of utmost importance in this...
We organised a Specialty Chemicals Industry Conclave on 28th September 2016 in Mumbai. In this daylong event, we hosted the following eminent dignitaries from the Indian specialty chemicals' sector in a panel discussion...
Arab Heavy, and Maya went up slightly by 1% qoq. WTI was slightly down 1% qoq. Brent closedatUS$47.7/bblQ2endversusUS$48.4/bblQ1end,implyingasmallinventoryloss forrefiners.Theaveragerupeedollarratealsowasflatqoqwhileitclosedstrongerat66.6...
New project announcements +24% qoq after adjusting for projects with low visibility: Overall, new projects announced in 2QFY17 (Rs 1.97tn) were up 32% qoq, but down 19% yoy. However, adjusting for lowervisibility projects (Rs 500bn JSW steel plant), they increased24%qoq,butfell40%yoy.Manufacturing(Rs1tn,drivenbymetalsandrefinery) and transport (Rs 611bn, led by aircrafts) accounted for 83% of new announcements. By ownership, the private sector accounted for 70%. Key projects include Go Air's aircrafts order (Rs 517bn), JSW's Odisha steel plant (Rs 500bn), CPCL's Nagapattinam refinery (Rs...
Sintex announced the demerger of its custom moulding business and the prefab businessformSintexIndustriestoSintexBAPLLtdandSintexInfraProjectsLtdrespectively under Sintex Plastics Technology Ltd as a whollyowned subsidiary. Shareholders of Sintex Industries will get one equity share of Sintex Plastics Technology against one equity share...
Digital business grew by 30% yoy (in local currency). Digital, Cloud and Security revenues combined constitute 40% of Accenture's total revenue. Outlook subdued guidance for FY17...
warehouse order for Amazon and 17floor commercial complex at Hyderabad. Half of its orders are from repeat customers and it is seeing improvement in order enquiry in solar, airports,warehousing,andhighrises.ItsBarodafacility,startedinMay2016,isabletocater to Madhya Pradesh, Gujarat, and north India. The increase in production at this facility, alongwithapickupinorderinflow,islikelytodriverevenue.PEBScanincreaseproduction...
most competitive benzenebased specialty chemical companies in the world with 125+ products offerings. It has wide range of customer domestically (500+) and globally (150+). Moreover,itsintegratedproductsmixmakesitaPartnerofchoicebyvariousmajorglobal and domestic customers which is evident from the fact that >80% of FY16 revenues were...
Parag Milk Foods (PARAG) is a play on the high-growth value-added dairy products space. It has tremendous capability to innovate and create industry leading brands in a short span, its brands Go' and Gowardhan' have become household names. Its focus on consistent product innovation and mix improvement will lead to sustained better margins, which coupled with high revenue growth would translate into sharp earnings growth. It has delivered strong 25% PAT CAGR in FY12-16, and we expect growth momentum to continue in FY17-20 (we see 30% CAGR). With capex cycle almost at completion and with capital utilizations set to improve, we estimate the free cash flows to improve...
Search for new CEO has begun; Ajay Kaul to stay until 31 March 2017: The company has begun its search for a new CEO (submitted exchange filing of current CEO's resignation). The new CEO can be from within the system or from outside it. We expect this post to be filled...
India'sbiggest spectrum auction will begin from October 1st. The spectrum bandsput to auctioninclude700MHz,800MHz,900MHz,1800MHz,2100MHz,2300MHz,and2500MHz, constitutingatotalof2,355MHzofspectrum,withthelargestchunkinthe700MHzband. Whiletheauctionsizeismassive,webelievethatinthecurrentenvironmentwheremost operatorshavelimitedspectrumrequirements,themegaauctionislikelytobeafailure 700MHzwillelicitverylittleornointerestfromtheoperators,mostoftheactionshould be visible in the 1800MHz band (where both Idea and Vodafone will look at plugging spectrum gaps in key circles), and other bands will see limited interest these factor...
by continued momentum in personal mobility space coupled with some recovery in commercialvehicleandindustrialsegments.Weseesteadymarginsandvolumerecovery based on a benign oil price environment, strong auto and industrial fuel consumption, slowing drain interval growth and push towards premiumisation. We expect lubricant marketers to see better profitability and initiate coverage on Castrol India/Gulf Oil with...
mom). Lower prices were recorded for vegetables (7.5% mom) and fibre (2.2% mom). Cereals,oilseeds,andmeatregisteredhigherprices. Mutedriseinmanufacturinginflation:Thiswasup20bpsmomledbydropincommodity prices and persisting weak demand. 9/12 (vs. 8/12 last month) industries recorded higher prices. Higher prices were seen in food products, beverages, textiles, paper & paper products, wood & wood products, rubber & plastic products, chemicals, non metallic mineral products, cement, and transport equipment; prices fell for metals and leather & leather products. Core inflation rose to 0.5% vs. 0.1% last month; we expect it to remain...
fuel prices. Barring fuel and food, inflation was on the higher side in other segments. Food inflation fell by 0.4% mom (lowest in six months); higher prices were seen in cereals (0.6% mom),proteinitems(0.5to1.3%),veggies(3.7%),pulses(1%),andsugar(+1.4%;up22.5% since October 2016). Segments that registered higher inflation were tobacco, clothing,...
