Trade deficit for the month on March widened to USD 13.7 billion, inching up from USD 12 billion last month.

Pharmaceutical companies across the globe are facing the same problem 1) fierce competition, 2) shorter time-to-market, 3) expiring patents, 4) slowing sales growth, 5) declining profitability in developed markets, and 6) stringency from authorities for giving approvals. Especially in the regulated markets, with the rising demand for healthcare and falling budgets, government and payers are exerting pressure to drive down prices. Additional woes for the non-regulated market include economic environment, regulatory issues and currency movement which are negatively impacting the near-term outlook. Hence, given the ambiguity linked with the exports, we feel having exposure in the domestic market will result in stable revenues. Even though issues do exist in the domestic market like 1)additions in the NLEM list, 2)FDC ban, 3)generic-generic penetration and 4)GST implication with BAR CODING in all the chemist shops. We initiate coverage with MNC companies which we believe are pure domestic players in the pharma basket. These companies will continue to enjoy premium given 1)stability in the business, 2)high ROCEs, 3)strong BS, and 4)high dividend. We like Abbott India(BUY, 17% upside potential, target PER of 26x+Rs954/sh),...

Hindustan Aeronautics (HAL) is increasing production capacity to manufacture locally-developed light combat aircraft. Government has approved $210m to ramp up Bengaluru plant....

The U S Markets ended higher amid easing geopolitical concerns and as investors turn their focus to quarterly earnings reports by companies. The Dow Jones gained 213 points or 0.87 % to close at 24,573 while NASDAQ...

Change in rating: With recent price corrections we upgrade Brigade Enterprises and Kolte Patil to BUY and NEUTRAL respectively.Over last 3M, Nifty Realty index has underperformed Nifty by 15.6%. The correction was led by overall muted recovery in the sector. Much of the impetus provided by favorable tailwinds (1) Affordable housing incentives (2) Low interest rates & (3) RERA, has not translated into volumes recovery for the sector. Developers are cautiously balancing out new supply so as to hold on to prices. This strategy has resulted in slow off take. Over last 3M, Nifty Realty index has underperformed Nifty by 15.6%. The correction was led by overall muted recovery in the sector. Much of the impetus provided by favorable tailwinds (1) Affordable housing incentives (2) Low interest rates & (3) RERA, has not translated into volumes recovery for the sector. Developers are cautiously balancing out new supply so as to hold on to prices. This strategy has resulted in slow off take.

We attended Defexpo India 2018 the tenth edition of the land, naval and internal homeland security systems exhibition at Tiruvidanthal Kanchipuram, Chennai. The exhibition was commendable for its extraordinary arrangements and highest-ever domestic participation. Around 72% of the space was earmarked for domestic companies, of which 20% was reserved for MSMEs. The exhibition was one the largest exhibition of its kind in the country (arranged over nearly 2 lakh square metre) with an underlined theme of India: The emerging defence...

Top Picks: Ashoka Buildcon, PNC Infra, JKIL & JMC Projects Record ordering in 4QFY18, focus to shift towards execution: NHAI increased the awarding pace in 4QFY18 post a muted 9MFY18 taking aggregate awards to ~7,400km. With EPC players order backlogs swelling, we expect focus to shift towards execution. NHAI is targeting another ~7,000-8,000km of awards for FY19E with Rs 1.2tn of combined value, order visibility is strong. Besides road, vertical, Buildings segment outlook remains buoyant led by institutional, government and retail/hospitality led spending.

Our top picks are Rallis India (44% upside), Dhanuka Agritech (27% upside), and Insecticides India (25% upside). For Agrochemical companies, 4Q contributes lower to the aggregate revenues and profits vs. other quarters. We expect our coverage universe to post Revenue/APAT growth of 14/16% YoY. Strong top-line growth is expected from Insecticides India (+25.8% YoY) and UPL (+14.8% YoY). While higher raw material prices are a concern, we expect our coverage universe to post an EBITDA margin of 20.5% (-12bps YoY) for the quarter.

We recently interacted with Mr. Rupinder Singh Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (Amul) at an Experts Day meet held by us recently to understand the growth dynamics, competitive intensity and long-term outlook of Indian dairy sector. The sector continues to attract new entrants looking at the growth potential. Excess supply will continue to put downward pressure on pricing. This opens up a huge export business opportunity for India to serve surrounding milk-deficient countries like Pakistan, Sri Lanka, Bangladesh etc. Indian dairy sector has been largely dominated by the unorganised segment, but the organised segment's growth is growing in double digits, well ahead of the overall growth in the Rs6,000bn market....

Headline inflation moderated to 4.28% (y-o-y) in March from 4.4% (y-o-y) in February. Street expectations for March inflation was muted at 4.1% (y-o-y).

IIP expands by 7.1% in Feb 2018; CPI inflation eases to 4.3% in Mar 2018 Outlook: Manufacturing conditions has improved significantly over the last four months as avg. factory output growth was recorded at 7.6% driven by strong performance of manufacturing sector. While the expansion in capital good can also be attributed to favorable base effect in Feb, avg. 11% growth over the last seven months showing that investment scenario in the economy has improved. Strong growth in consumer durable and non-durables sector indicated broad based improvement in the demand. IIP growth is expected to remain strong in the coming...

On a sequential basis, food inflation dropped 0.36% MoM led by a sizeable decline in vegetable prices (down 4.20% MoM), pulses (down 0.95%) and sugar (down 0.85% MoM). Outlook remained benign on the...

inflation at 5.4% was above our estimate of 5.2%, indicating significant price pass-through. Food and beverage inflation, on the other hand, eased to 3.0% from 3.5% in the previous month. CPI inflation in 4QFY18 stood at 4.6%, slightly above the Reserve Bank of India or RBI's revised forecast of 4.5%. At the same time, the recovery seems to be progressing at a steady pace. Index of Industrial Production or IIP growth was a robust 7.1% in February 2018, above consensus estimate of 6.8% and our estimate of 6.3%. IIP growth was led by the manufacturing sector which rose 8.7% YoY. Mining sector's growth was lacklustre with 0.3% YoY decline. Electricity production rose 4.5% YoY. The recovery was largely broad-based with 15 out of 23 manufacturing...

Focus on India break-even would continue The management reiterated that the India business break-even is possible in three years if the SSSG remains in the range of 13-15%. Though the company has not delivered the targeted SSSG consistently in past few quarters, the management is optimistic about the growth rate in the ensuing quarters. Aim to acquire new customers Currently, the consumer base for Kaya is very limited to higher middle-class and above. The company aims to increase consumer base to cater to the maximum possible audience in the country....

Most Asian Markets are trading higher as geopolitical tensions receded after comments from President Trump that a possible U.S. missile strike on Syria might not be imminent. Nikkei is trading higher by 0.48%, Hangseng is trading higher by 0.05% while Shanghai is trading lower by 0.08%. Indian indices are expected to open in the green and focus will be on domestic earnings for further direction. Sgx Nifty is trading higher by 0.14%....