Broker Research reports Sector and thematic reports
for all reports
Keep track of Macro events and updates on the sectors that you are interested in. All reports with more than a single
stock belonging to a sector end up here.
in at 5.6% from 5.8% in 4QFY19. We have also revised down our annual GVA estimate for FY20 to 6.2% from 6.6% earlier, and GDP estimate to 6.4% from 6.8%. The downward revision is on account of slightly lower-than-expected 1QFY20 growth, with the recovery expected to be more protracted, thus pulling down growth in 2HFY20. Nevertheless, we are still penciling in growth returning close to 7% in 2HFY20 on a low base. Agricultural growth in 1QFY20 is likely to remain sluggish at around 1.5% YoY, but will be better than the decline of 0.1% YoY in the previous quarter. Industry (excluding construction) is likely to witness a mild pick-up, growing by 3.8% YoY, up from 3.4% previously, supported by strong growth in electricity production. Manufacturing and mining activity is expected to be broadly flat. Services...
to weak retail sales and inventory rationalization measures amid subdued consumer sentiments. The domestic industry's (ex-Tractors) wholesales declined by 18.1% YoY in July'19 whereas FADA reported anish.rankawat@nirmalbang.com retail industry decline of 6% YoY. This clearly indicates that there is some relief to the dealers in terms of +91-22-6273 8172 inventory levels. FADA indicated that Passenger Vehicle (PV) inventories were at 25-30 days in July'19, down from 30-35 days in June'19 and are approaching their suggested level of 21 days. On the other hand, inventories of 2Ws and CVs have remained largely similar on a MoM basis. Most of the downturn is attributed to economic slowdown, increased acquisition cost, liquidity crunch, tight NBFC financing and delayed monsoon. While monsoon has picked up pace recently, it has brought floods in many parts of the...
The company's GNPA reached Rs. 62,068 cr., and GNPA ratio deteriorated slightly in Q1FY20 (+66bps QoQ to 16.5%). NNPA ratio also witnessed similar weakness (+18bps QoQ to 5.8%). Capital adequacy ratio increased to 14.4% in Q1FY20 versus 11.4% in Q1FY19 and 14.2% in Q4FY19. Provision coverage ratio remained flat on QoQ basis,...
RBI has a growth supportive bias, but rates will move lower in baby steps Teresa John, CFA The Monetary Policy Committee (MPC) minutes suggest that growth concerns were pervasive and supporting Research Analyst (Economist) growth remains imperative. However, the minutes also conveyed the message that the room for further rate teresa.john@nirmalbang.com cuts is limited due to the substantial rate cuts already undertaken, incomplete transmission and the need to +91 22 6273 8114 preserve room for further accommodation in the event of a significant global downturn. Dr. Shakitkanta Das, Dr. Michael Patra and Deputy Governor Kanango voted for a 35bps rate cut. Dr. Ravindra Dholakia suggested a 40bps rate cut, but was happy to vote with the consensus. Dr. Pami Dua suggested a pre-emptive 25bps cut and Dr. Chetan Ghate who noted that the MPC has enacted both insurance-cuts (to address current and...
Asian Markets are trading mixed amid reports that manufacturing activity in Japan contracted for a fourth straight month in August and oil prices firmed up after data showed a larger-than-expected drop in US crude inventories. Nikkei was trading higher by 0.14%, Hang Seng was trading lower by 0.57%,
Sensex earnings (ex-financials) in Q1FY20, mirrored the muted demand sentiment domestically with modest 6.1% YoY increase in topline and de-growth of 10% at the PAT level. The de-growth in bottomline was primarily driven by raw material price increase (120 bps YoY) as well as negative operating leverage in the form of increase in employee costs (33 bps YoY). EBITDA margins in Q1FY20 were at 18.0%, down 140 bps YoY. The Q1FY20 performance in not comparable QoQ due to Q4 being a seasonally heavy quarter. The Q1FY20 performance was also marred...
Most Asian Markets are trading lower tracking weak cues from Wall Street overnight amid re-emerging concerns over global economic outlook. Nikkei was trading lower by 0.39%, Hang Seng was trading lower by 0.06%, and Shanghai was trading lower by 0.05%. Indian indices are expected to open on a flat
Potential impact of interchangeability guidelines: Unlike small molecule generics, which are interchangeable for innovator brands, biosimilars that are approved by the USFDA need to be promoted under brands and are not interchangeable for innovators' brand prescriptions. A couple of months back, the USFDA issued guidelines for companies that intend to develop interchangeable copies of biosimilars of innovators' biologics. According to Mr. Parandhaman, the guidelines on interchangeability have raised the entry barrier for biosimilar players. Only In case of few select biosimilar drugs (already approved), the guidelines may provide an advantage to incumbents, as they can leverage on post marketing evidence collated either through post...
After volatile month of Jun'19, Brent Crude oil price remained flattish in July'19 to average at US$64/bbl and is now hovering around US$59/bbl. OPEC production also remained flattish at 30mbpd as lower production from Iran and Saudi Arabia continues. Non-OPEC production grew marginally by 0.6% MoM to 62.3mbpd for the month of Jun'19 owing to higher production from U.S. U.S Crude oil inventory declined 5.7% MoM at 449mn bbls for the month of July'19. Singapore Gross Refining margin (GRM) improved significantly to average at US$6.9/bbl from US$3.2/bbl in Jun'19 owing to improved crack spreads of all petroleum products in the range of 17%-24% on MoM basis. Gasoline crack spreads improved significantly to US$7/bbl from US$2.2/bbl in Jun'19. U.S Refinery utilization remained flattish at 93.8% for the month of July'19. Arab Light-Arab Heavy differential also remained flattish at US$2.0/bbl whereas INR improved MoM to average at Rs68.8/US$ in the month of July'19. On Natural Gas space, LNG prices remained flattish to average at US$4.2/mmbtu in July'19 owing to subdued demand from Japan and rapid rise in new...
Initiating on Mahanagar Gas with Sell; Downgrading IGL from Buy to Accumulate We are taking a negative stance on the Indian city gas sector, as it enters a transition phase that will bring current networks in Delhi and Mumbai under open access subject to regulated tariff, even as end-consumer prices of compressed natural gas (CNG) and piped gas (PNG) are left free. Given the risk of tempered earnings and returns under the regulated tariff regime post open access (once marketing exclusivity ends), we are downgrading Indraprastha Gas (IGL) from Buy to Accumulate with our DCF-based TP of Rs320 (-2.6% from CMP) estimated using our regulated tariff model (RTM). We also...
1Q FY20: PL Universe 1Q sales grew 4.3% (Est. 3.5%), Adjusted PAT grew 6.7% (Est. 6.9%). Excluding Banks, sales grew 3.7% while PAT declined by 9.7%. Automobiles, Metals, Oil and Gas and Agro Chemicals were worst suffers with 54%, 26.7%, 19%, 39% decline in PAT. Cement, Banks, NBFC and Pharma posted strong numbers, mainly on a low base. Earnings breadth was negative as...
1Q FY20: PL Universe 1Q sales grew 4.3% (Est. 3.5%), Adjusted PAT grew 6.7% (Est. 6.9%). Excluding Banks, sales grew 3.7% while PAT declined by 9.7%. Automobiles, Metals, Oil and Gas and Agro Chemicals were worst suffers with 54%, 26.7%, 19%, 39% decline in PAT. Cement, Banks, NBFC and Pharma posted strong numbers, mainly on a low base. Earnings breadth was negative as...
Most Asian Markets are trading mixed as investors take note of news that Peoples Bank of China announced new fluctuating Loan Prime Rate (LPR) mechanism replacing the existing fixed benchmark lending rate; the new LPR being lower at 4.25% than earlier 4.31% is seen as a guided rate cut to boost econ
With a launch pipeline of ~6.4mn sqft in residential segment and ~2.5mn sqft in commercial segment, the company remains well on track to achieve the pre-sales guidance of ~4mn sqft for FY20E. However, the quarter witnessed less than enthusiastic collections (-18% QoQ). Mid-income and affordable segments are expected to drive residential sales with ~80% of BEL's inventory below Rs 10mn ticket size. Despite capex commitment of Rs 13.7bn, pending Rs 24.8bn pre-tax cash flows from real estate projects should suffice. However, timing mismatch could result in further debt drawdown. We maintain NEUTRAL. Key monitorable: Leasing velocity in SEZ projects. We maintain NEU on BEL with SOTP-based TP of Rs 289/sh. 1QFY20 financial performance was below estimate. Strong residential pre-sales momentum and uptick in leasing in two SEZs were key positive.
Q1FY20 revenue grew only by 5.9% YoY to Rs. 2,677cr with half of the growth on account of volume growth and the other half attributable to price increase. The topline growth faced headwinds from slowdown in the economy, and sluggish demand especially in the rural areas. EBITDA increased 7.1% YoY in Q1FY20 to Rs. 462cr, while margins improved by 19bps YoY. The growth in margins were mainly on account of moderate inflation (~4%) of raw materials, which was in turn due to their long positions in some of the commodities like flour. PAT declined 2.8% YoY to Rs. 251cr, affected by exceptional expense of Rs. 16cr incurred by the company for its VRS...
Asian Markets are trading higher tracking firm cues from Wall Street over the weekend. Nikkei was trading higher by 0.52%, Hang Seng was trading higher by 1.64%, and Shanghai was trading higher by 0.45%. Indian indices are expected to open in the green and focus will be on global cues for further
Maintain BUY as Spice will benefit from the benign competitive environment in the near term. The airline is gaining market share post Jet Airways closure (+280bps YoY). However, we are lowering valuation multiples to factor in the grounding of the 737 MAX planes as the resolution of the same is expected to take longer than expected. Aided by lower competition in 1QFY20, Spiceadded 32 planes to its fleet (now at 107) and load factors remain elevated at 93%. Market share of the airline has risen to ~15% post the grounding of Jet. However, the 13 B737 MAX planes are grounded, on which the co is incurring expenses. Valuation multiples will remain constrained till this issue is resolved. Maintain BUY with a revised TP of Rs 170 (7x FY21E EV/EBITDAR, 8x earlier).
1QFY20 was a bit of disappointment on execution, delay in receiving Karnataka 3 HAM project Appointed Dates had a role to play. ACL asset monetization is expected by Mar-20 and ABL needs to give SBI Macquarie a minimum Rs 15.3bn exit floor valuation for its 39% stake in the platform. Speedy BOT asset monetization (incl. Macquarie's exit) would provide financial flexibility to bid for more HAM projects, without increasing leverage. Standalone debt has reduced by Rs 1.4bn QoQ to Rs 5.8bn. We maintain BUY. Key risks (1) Delay in SBI Macquarie deal closure; (2) Dip in traffic revenue from BOT projects; (3) Delay in ADs. We maintain BUY on ABL with a SOTP of Rs 257/sh despite 1QFY20 muted performance. We value the EPC business at 15x FY21E EPS.
