Indian Economy share price target

Real GDP accelerated to 6.1% YoY growth in Q4FY23, taking growth for FY23 to 7.2% (in line with our estimate, but above the RBI’s 7% and IMF’s 6.8% estimates). The rebound in Q4 was spurred by a turnaround in net exports, as exports of goods and services grew 11.9% YoY while imports decelerated to 4.9% YoY growth.

LIC is treading well towards increasing VNB by pushing product mix towards non-participating segment (8.9% in FY23 individual APE mix vs 7.1% in FY22) and sharp focus on improving persistency (improvement in all cohorts except 25M in FY23). Volume growth outperformed the industry in 9MFY23 (27% YoY growth for LIC vs 20% growth for private insurers in terms of total weighted APE) but Q4FY23 witnessed a decline of 16% YoY vs private insurers witnessing a growth of 18% YoY.

India’s imports declined in each of the first four months of CY23, shrinking 6.2% YoY in Jan-Apr’23, including a big decline of 14.8% YoY in Apr’23. This has led some commentators to conclude that the import decline is attributable to a contraction in
domestic demand.

Commodity profit pool contraction seen in FY23 is set to reverse in FY24. Commodity profit pool within the listed space dipped YoY by a staggering Rs1.3trn during FY23 to reach Rs2.5trn, thereby, resulting in the aggregate PAT/GDP ratio dipping to 4.3%.

Beat in earnings amid gradual overall recovery: Balkrishna Industries’ (BIL) Q4FY23 EBITDA margin at 20.3% was in line with our estimate and up 420bps QoQ, driven by gradual decline in the cost of consumed raw material basket (RMB) and relatively lower-priced freight contracts.

We attended HDFC Bank’s Analyst Day (on May 24, 2023) which involved day-long presentations from top management and various vertical heads. The bank remains confident of superior credit growth, comfortable asset quality and steady profitability metrices.

Despite weakening global growth and financial tightening coming to the fore, India's economic activity continued to demonstrate resilience, ending FY23 on a stable note.

The RBI board may decide to nearly double its dividend to the government from official estimates due to revaluation gains and profits from selling dollars, which could help bridge the fiscal deficit.

India’s merchandise trade deficit narrowed to US$15.24bn in Apr’23, the smallest in 20 months, as imports declined 14.1% YoY in Apr’23, while exports were reported to have declined 12.7% YoY.

Trade Deficit Drops to a 20-Month Low Due to Lower Exports and Imports