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Credit Growth Stagnates, Retail Segment Is Lone Saviour As per the Reserve Bank of India or RBI's latest reported data, credit growth at 6.5% continued to remain in single digit for the 17th consecutive month on lower credit demand, lenders' unwillingness to go for project financing, and lower capital support for public sector banks. The lacklustre growth in credit can be largely attributed to negative industrial credit growth dragged by the infrastructure sector. Retail seems to be the only saviour, but unsecured segments within retail are driving the growth. Deposit growth, after a spike...
Seng trading lower by 0.68%. The domestic markets are expected Philadelphia Federal Reserve showed an unexpected improvement in regional manufacturing conditions in the month of September. The Dow Jones lost 53 points, or 0.24 %, to close at 22,359 while NASDAQ lost 33...
Source: Bloomberg, Nirmal Bang Institutional Equities Research Decitabine (Dacogen generic): In Decitabine, new generic entrant (Intas) is apparently drawing market share from the innovator (Otsuka). DRL continues to...
expected to open lower. Sgx Nifty is trading lower by 0.18%. The U.S. markets ended mixed as Fed Reserve maintained status quo on interest rates and announced it will begin in October rolling off its $4.5 trillion balance sheet. The Fed Reserve meeting also indicated another rate hike this year. The Dow Jones gained 42 points, or 0.19 %, to close at 22,413...
IUC's cut of 57% is steeper-than-expected. The zero-IUC regime will impact Bharti's consolidated/India wireless EBITDA by ~4/6% (~Rs 14-16bn). With Idea being a purely domestic player, the rate cut would have a more profound impact at ~12% (~Rs 11-13bn). TRAI has reduced the mobile termination rate (MTR) or interconnect usage charges (IUC) from the current 14p/minute to 6p/minute from 1-Oct-17 to 31-Dec-2019, and nil after that.
Mexico-based Cinepolis, which is the world's fourth largest film exhibitor with ~5,000 screens (most of which are in Latin America), started operations in India in 2009 and currently has 311 screens in 43 cities under the brand names: (1) Cinepolis (219 screens) (2) Cinepolis VIP (12 screens) and (3) Fun Cinemas (80 screens). We had a meeting with Mr. Devang Sampat, business head (strategic initiatives) of Cinepolis recently to understand his take on the Indian industry, the company's growth plans and points of differentiation vis--vis players like PVR and Inox Leisure. From our meeting there were two key takeaways: (1) Mall growth is very anaemic with no signs of pick-up limiting the supply of screens. (2) There is scope for narrowing the large gap (~50%) in...
India monsoon rainfall 6% below normal as of Sept. 19 Asian markets are trading mixed tracking cues from Wall Street overnight as investors watch out for outcome of conclusion of the U.S....
The U.S. markets ended higher led by gains in financial stocks ahead of a Federal Reserve meeting; however decline in technology stocks restricted the gains. The Dow Jones gained 63 points, or 0.28 %, to close at 22,331...
domestic product or GDP) broadly in line with our estimate of US$14.86bn (2.3% of GDP), +91 22 3926 8114 and up from 0.7% of GDP in 1QFY17. The widening of CAD was largely on account of a higher trade deficit which stood at US$41.2bn as import growth outpaced exports. Services surplus grew 15.7% YoY on account of higher growth in non-IT related services. Remittances also grew 5.3% YoY. The growth in non-IT services is encouraging at a time when software services, the primary driver of services surplus, is facing headwinds. Foreign direct investment or FDI doubled from last year and stood at US$7.2bn. Portfolio flows stood at US$12.5bn on account of inflows into the debt market. Total flows on capital and financial...
Unit-2 plant inspection underway a positive surprise According to media reports, the US FDA has been inspecting Divi's (DIVI) Unit-2 plant since early last week. The plant was last inspected in Dec-16 and was issued an import alert in Mar-17. The current inspection thus comes as a positive surprise as it is happening within six months of the issuance of the import alert (v/s historical trend of 12-18 months). DIVI's stock has moved up ~15% over the past week on the back of this development. Although early re-inspection (expected to get over next few days) is a positive development, we would wait for the outcome of the inspection (nature of 483...
India's economy took a hit in June 2017 on account of implementation of the Goods and Services Tax or GST from 1 July 2017, and has been slow to recover. Moreover, we believe the occurrence of back-to-back shocks in (Economist) the form of demonetisation and GST is weighing on the economy. The number of indicators recording positive teresa.john@nirmalbang.com readings inched up only marginally, from 22 in June to 23 in July 2017. Early data for August 2017 is also yet to +91 22 3926 8114 indicate signs of a robust recovery. Manufacturing PMI rose to 51.2 in August, above the 50 expansion mark and up from 47.9 in July 2017. Capex recovery continues to elude, and we believe capacity utilisation needs to move close to 80% before the private sector comes back to the drawing board with a concrete plan for expansion. Credit growth registered an uptick, rising 7.2% YoY in August 2017, the highest in the past 10 months. Industrial...
India monsoon rainfall 6% below normal as of Sept. 14 2,000 km east of Hokkaido. Nikkei is trading higher by 0.10%, Hang The U.S. markets ended mixed as strong inflation data led investors to believe that Fed would resort to tighter monetary policy. The Dow Jones gained 45 points, or 0.20 %, to close at 22,203 while NASDAQ lost 31...
Stricter recognition of NPAs and provisions could hamper earnings growth for FY18: As the banks start to recognize more number of accounts in the top defaulters list as NPAs and the resultant provisioning, we could see increased provisions for banks, going forward. This could also result in earnings growth remaining subdued in FY18. As per our estimates, earnings growth of banks for FY18 has already dropped from 32.5% in August to 24.9% in September...
Oil ministry not to intervene in policy for daily revision of fuel prices Asian markets are trading mixed as investors take note of data from China. August industrial production rose 6% from one year...
Seasonal Price Correction Continues In September 2017 We interacted with several cement dealers across India to gauge on-the-ground cement price and demand scenario. The key takeaway is that all India average cement prices are down 3% MoM and 1.9% YoY. This is the fourth consecutive month where prices declined on MoM basis and now are at par with February 2017 level. Cement prices are down 9.4% from the high level witnessed in May 2017. While prices declined across the country on YoY basis, the western region is a clear standout region where prices are still up 12% YoY. The regions where prices are weak are northern and eastern regions with highest QoQ and YoY dip in prices. Lucknow...
Consumer Price Index or CPI inflation rose to 3.4% in August 2017, up from 2.4% in the previous (Economist) month. This was above our expectation of 3.0% and consensus expectation of about 3.2%. Core teresa.john@nirmalbang.com inflation also rose to 4.50% against our estimate of 4.35%, and up from 3.96% in the previous +91 22 3926 8114 month. The pick-up in core inflation can be attributed to higher housing inflation on account of the hike in house rent allowance (HRA) for government employees as recommended by the Seventh Central Pay Commission (7th CPC), and higher taxes on consumer goods and 'sin goods' under the Goods and Services Tax or GST regime. The Index of Industrial Production or IIP rose 1.2% YoY in July 2017, up from -0.1% in the previous month and above our estimate of 0.7%, but a tad below...
Outlook: Industrial production is likely to revive in the coming months amidst the expectations of revival in overall demand in the economy. Manufacturing PMI reviving to expansionary phase of 51.2 in August v/s 47.9 in the previous month and increase in auto production growth to 13.6% in August (10.8% in July) showed that manufacturing output has improved following the implementation of GST. Consumers non-durable sector continued to witness positive growth showing an improvement in the rural demand, furthermore demand in the economy to get boost from the coming festivals season and rise in new income to farmers post kharif crops harvest. Growth in auto production, rising...
