06-Jun-2020Research Reports

05-Jun-20

Banking: Apex court raises troubling spectre of interest waiver

The SC in a recent hearing expressed concerns over banks charging interest on loans under moratorium but has sought the government's reply on the matter.

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02-Jun-20

Automobiles: May’20 Auto Sales – Tractors robust, other segments weak

Auto sales in May remained muted owing to lockdown restrictions across major parts of the country.

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01-Jun-20

Banking: Credit Tracker – Lockdown mars retail credit growth

RBI data on sectoral credit deployment indicates that growth in non-food credit remained sluggish at 7.3% in Apr’20.

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22-May-20

Banking: Relief measures by RBI extended further

RBI today announced further measures aimed at easing financial stress

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19-May-20

IT Services: Takeaways from Gartner IT spending quarterly outlook

As the coronavirus continues to spread, Gartner now expects worldwide IT spends to decline 8% in CY20 vs. growth of 5% forecast earlier.

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18-May-20

Market Strategy: Covid-19 Stimulus – Lean fiscal stimulus offers little respite

The Centre’s Rs 20tn stimulus package provides impetus to structural reform initiatives that will bear fruit over the long term, but offer little immediate respite.

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18-May-20

IT Services: Vertical deep dive: Retail vertical to bear the brunt – SELL Wipro

While concerns about the travel & transport vertical (<5% revenue share for tier-I India IT) are at the forefront, we believe retail – the second largest vertical with 14% share – will be the worst hit for India IT services.

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15-May-20

Logistics: Monthly Tracker – Unprecedented slowdown in extraordinary times

Trade barometers registered unprecedented declines in Apr’20 as manufacturing activity came to a standstill amid the national lockdown.

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13-May-20

Market Strategy: Covid-19 Stimulus – First instalment of mega stimulus: spotlight on MSMEs

As part of its Rs 20tn stimulus package, the Centre today unveiled ~Rs 6tn in liquidity-related support, primarily targeting MSMEs and NBFCs.

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12-May-20

Banking: Lending yields plummet in March

As per latest RBI data, fresh lending yields continued to decline, with a 40bps MoM drop in Mar'20 to 8.8%.

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11-May-20

Oil & Gas: Petroleum consumption plunges in April

India’s petroleum product consumption plunged 46% YoY (–38% MoM) to 10mmt in Apr’20, as all fuels except LPG saw severe demand erosion.

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06-May-20

Oil & Gas: Mar’20 natural gas consumption slips

Natural gas consumption in Q4FY20 increased a mere 2.6% YoY to 150mmscmd as offtake inched up across sectors and power demand dropped – CGD (28.6mmscmd, +10% YoY), other industrials (50.6mmscmd, +8.2% YoY) and fertiliser (45.4mmscmd, +4% YoY).

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06-May-20

Market Strategy: Macro View – Excise duties on fuel hiked to meet fiscal challenges

The Centre has hiked excise duties on petrol and diesel by Rs 10 and Rs 13 per litre respectively as it strives to balance the fiscal math, translating to an estimated windfall of ~Rs 2tn for the exchequer.

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30-Apr-20

Building Materials: Gulf anti-dumping levy to hit ceramic tile producers

The GCC today imposed anti-dumping duty on ceramic tile imports from India and China from 6 June 2020 for five years.

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22-Apr-20

Automobiles: Q4FY20 Preview – Covid-19 stalls recovery hopes

Weak dispatches in Q4FY20 due to BS-IV inventory liquidation and the March lockdown saw aggregate FY20 volumes declining at record rates.

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20-Apr-20

Logistics: Q4FY20 Preview – Expect an anaemic quarter

Already reeling under a domestic consumption slowdown, the Indian logistics industry has now taken a severe blow from Covid-19-led trade disruptions.

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17-Apr-20

NBFC: RBI’s Covid-19 measures positive but half-hearted

RBI has announced key relief measures for NBFCs today, viz. targeted long-term repo operations (TLTRO) 2.0, special refinance facilities for All India Financial Institutions (AIFIs), and a one-year extension for real estate loans.

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17-Apr-20

Banking: RBI announces fresh measures to cushion lockdown impact

The RBI today announced the following additional liquidity measures to address near-term concerns amid the Covid-19 pandemic.

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16-Apr-20

Oil & Gas: Q4FY20 Preview – Pressure on cyclical earnings

The oil price crash has been a main feature of Q4FY20.

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15-Apr-20

Automobiles: Yongda call takeaways – China luxury car demand on the rebound

We hosted a call with China Yongda Automobile Services (Yongda), one of the leading luxury car dealers in China with over 200 outlets catering to marquee brands such as BMW, Porsche, Mercedes Benz, Audi and JLR.

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15-Apr-20

Building Materials: Q4FY20 Preview – Expect an insipid quarter

Building material companies under our coverage are likely to post a dull Q4FY20 as tough market conditions have been further accentuated by the lockdown in end-March, thus taking a toll on volumes.

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15-Apr-20

Banking: Q4FY20 Preview – Limited lockdown impact in Q4

We expect a modest fourth quarter for our banking coverage followed by a sharp credit slowdown in Q1FY21 as the lockdown impact unravels.

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13-Apr-20

Diversified Financials: Q4FY20 Preview – Robust quarter with limited lockdown impact

We expect BAF, MUTH and MGFL to register strong AUM growth in Q4FY20 even as efficient opex and risk management keep profits buoyant.

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13-Apr-20

Building Materials: Lockdown to mar near-term prospects; structural drivers intact

We expect the ongoing lockdown to severely hamper demand for building materials in H1FY21 with some revival only from H2.

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09-Apr-20

IT Services: ISG Index – Covid-19 to forestall deal activity in Q2CY20

As per ISG, Q1CY20 managed services deals – a more relevant indicator for Indian IT services players – were on track for 9-10% YoY growth pre-Covid-19.

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08-Apr-20

Pharmaceuticals: Q4FY20 Preview – Good Q4 for DRRD, LPC, DIVI, Laurus; FY21 guidance key to watch

We expect DRRD, LPC (Levo ramp-up + Losartan/HCTZ), and DIVI (leverage post FDA audit) to report a good quarter, with higher margins QoQ for LPC/DIVI (decline for DRRD on R&D cost increase).

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02-Apr-20

Automobiles: Mar’20 Auto Sales – BS-VI shift + Covid-19 drive sharp slump

Mar’20 volume growth was weak for all automotive segments as the Covid-19 outbreak followed by plant shutdowns hit production and sales.

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02-Apr-20

Oil & Gas: Feb’20 natural gas consumption surges

Natural gas consumption in Feb'20 increased 10% YoY to 160mmscmd as offtake climbed across sectors (except power) – fertiliser (47mmscmd, +9% YoY), CGD (30.4mmscmd, +17% YoY), and other industrials (52.9mmscmd, +13.7% YoY).

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31-Mar-20

[Ground Connect] Logistics: Channel check takeaways – lockdown wreaking havoc

We recently interacted with a number of logistics companies – listed and unlisted – as well as industry experts.

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31-Mar-20

[Sector Report] Banking: Large private banks offer safe havens – BUY ICICIBC, AXSB, HDFCB

India’s banking sector is battling lashing headwinds ranging from anaemic credit demand to elevated bad debt and Covid-19 fears.

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24-Mar-20

Errata: India Strategy | Covid-19 Pandemic: Market bottom elusive – stick to select cash-rich stocks

Central banks globally are bracing for a worldwide economic shutdown which heightens the risk of a protracted downside in global markets.

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13-Mar-20

[Sector Report] Diversified Financials (AMCs): Low-levered, high-ROE and dividend-payout plays – BUY HDFC AMC; SELL NAM

Asset management companies (AMC) are a play on the growing financialisation of savings in India.

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11-Mar-20

India Market Strategy: Unlevered stocks best picks in tremulous market

Recent market correction, driven by global turmoil, has put Nifty valuations (at 15.5x one-year forward) at an attractive level.

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07-Mar-20

Banking: Yes Bank rescue plan – stake purchase the lesser evil for SBIN

The RBI and government of India have superseded Yes Bank's (YES) board and placed the bank under moratorium from 5 Mar 2020.

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02-Mar-20

Automobiles: Feb’20 Auto Sales – Weak for most segments; PVs, tractors ahead

Feb’20 volume growth remained negative for most key segments, barring tractors.

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17-Feb-20

Logistics: Monthly Tracker – Rail container volumes steady, major port cargo sluggish

Trade indicators exhibited mixed trends in Jan’20.

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03-Feb-20

Automobiles: Jan’20 Auto Sales – PVs ahead of 2W and CVs

Jan’20 volume trends were mixed across segments and players based on stock levels and differing timelines for BS-VI production ramp-up.

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01-Feb-20

Infrastructure: FY21 Budget – Reduced funding for infrastructure

Overall fund allocation for key infrastructure sectors has declined 4% YoY in Union Budget FY21 to Rs 5.5tn, with gross budgetary support at Rs 2.7tn (+10% YoY) – the latter includes Rs 1.6tn (+7% YoY) towards roads and railways.

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30-Jan-20

IT Services: Coronavirus crisis hits global travel industry – likely risk for NITEC

The coronavirus outbreak in China is expected to exact a heavy toll on the global travel, transport and hospitality (TTH) industry.

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20-Jan-20

[Sector Report] Automobiles: Mixed signals – prefer PVs, two-wheelers (BUY Maruti, Eicher)

The auto industry slump over the past five quarters has seen the Nifty Auto Index plunging ~40% over the 12 months to Sep’19.

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16-Jan-20

Logistics: Monthly Tracker – Mixed trends

Trade indicators exhibited mixed trends in Dec’19.

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10-Jan-20

Logistics: Q3FY20 Preview – Insipid quarter beckons

Logistics companies in our coverage are expected to report a tepid Q3 as domestic and EXIM trade headwinds continue unabated.

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10-Jan-20

Infrastructure: Q3FY20 Preview – Execution a mix bag

Moderate execution due to prolonged monsoon and lack of order wards in the past year is expected to contain revenue growth at ~9% YoY for our infrastructure universe in Q3FY20.

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09-Jan-20

Banking: Q3FY20 Preview – Recoveries to aid earnings

Q3FY20 is likely to be a soft quarter in terms of business momentum as systemic loan growth has remained lackluster.

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09-Jan-20

Building Material: Q3FY20 Preview – Tepid quarter

Building material companies under our coverage are expected to post a tepid Q3FY20 as market conditions remained challenging, thus taking a toll on volumes.

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09-Jan-20

Oil & Gas: Q3FY20 Preview – Pressure on cyclical earnings

Cyclical business fundamentals aggravated in Q3FY20 – Singapore GRMs crashed to US$ 1.63/bbl (-75% QoQ), and petrochemical cracks declined ~20% QoQ.

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07-Jan-20

Pharmaceuticals: Q3FY20 Preview – Q3 strong for DRRD, LPC, SUN, Alkem & Laurus

DRRD, LPC, Sun & Alkem to report strong quarters both for US and India.

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03-Jan-20

Infrastructure: Ambitious Rs 102tn infra push – funding holds the key

The finance ministry’s Rs 102tn National Infrastructure Pipeline (NIP) for India over FY20-FY25 comes as a major boost for the sector.

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16-Dec-19

Logistics: Monthly Tracker – Container rail volumes tick up in incrementally better month

High frequency indicators for the logistics industry remained subdued in Nov’19, but have improved incrementally vis-à-vis the past few months.

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04-Dec-19

IT Services: US elections – a potential cyclical risk for Indian IT

Our analysis of growth trends over the last 12 years indicates a risk of protracted near-term softness for India’s IT services industry in the runup to US presidential elections in Nov’20.

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29-Nov-19

Oil & Gas: Expert meeting takeaways

We hosted Kaushik Deb – Research Fellow at KAPSARC (King Abdullah Petroleum Studies and Research Center), Riyadh, for investor meetings in Mumbai.

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21-Nov-19

Banking: Credit Tracker – Loan growth plummets to 8%

Credit growth for the fortnight ended 8 November slipped to a two-year low of 8.1% YoY, as per RBI data.

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18-Nov-19

Logistics: Monthly Tracker – Slump in port volumes and container rail lead distance

High frequency indicators, a harbinger of the logistics industry’s performance, worsened further in Oct’19, indicating a deepening slowdown.

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11-Nov-19

Oil & Gas: OMCs Q2 FY20– tepid GRMs, marketing earnings sustain

All the three OMCs – IOCL, BPCL and HPCL – reported Q2 FY20 earnings well below estimates, impacted by low GRMs (US$3.8-US$3/bbl), under- performing the benchmark Singapore (US$6.5/bbl).

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07-Nov-19

IT Services: Infosys and HCL Tech: Analyst meet takeaways

At analyst meetings hosted separately by INFO and HCLT, we noted evolving digital capabilities and growing digital contract sizes at both players.

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24-Oct-19

Oil & Gas: Govt. opens up fuel retailing to non-oil companies

The government has eased fuel retailing norms, allowing non-oil companies to set up petrol pumps in India to increase investment and competition in the sector.

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18-Oct-19

Agriculture: Maharashtra’s sugar production to nearly halve in 2019-20

We met senior officials of the Maharashtra State Co-Operative Sugar Factories Federation (MSCSFF) which has 190 co-operative sugar mills operating in the state as members.

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15-Oct-19

Logistics: Monthly Tracker - Demand climate deteriorates further

High frequency indicators, a harbinger of the logistics industry’s performance, worsened in Sep’19, marking the end of a sedate Q2FY20.

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12-Oct-19

Oil & Gas: Q2FY20 Preview - GRMs rise but economic slowdown weighs on cyclicals

Cyclical business fundamentals showed mixed trends in Q2FY20 – Singapore GRMs surged to US$ 6.5/bbl (+88% QoQ), while petrochemical cracks declined ~10% QoQ.

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12-Oct-19

Banking: Credit Tracker - Loan growth drops below 9%

RBI data shows that credit growth for the fortnight ended 27 September slipped to a three-year low of 8.8% YoY.

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11-Oct-19

Infrastructure: Q2FY20 Preview - Execution slackens; order flow a key monitorable

Poor project execution due to the extended monsoons is expected to contain revenue growth at ~15% YoY for our infrastructure universe in Q2FY20.

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11-Oct-19

Logistics: Q2FY20 Preview - Expect a weak quarter all around

High frequency indicators (EXIM trade, rail freight and major port traffic), corroborated by industry checks, signal a feeble demand environment for logistics services.

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11-Oct-19

Building Materials: Q2FY20 Preview - Modest quarter

Building material companies under our coverage are expected to post a modest Q2FY20 as tough market conditions exact a toll on volumes.

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11-Oct-19

Pharma: Q2FY20 Preview - India seasonality, stable US good for Alkem, DRRD; Cipla weak

We expect Alkem and DRRD to report a good quarter with largely stable US sales QoQ.

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10-Oct-19

IT Services: ISG Index call takeaways: Mixed signals for Q3CY19

ISG's Q3 Index reflects an uptick in deal activity and a return to double-digit growth.

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04-Oct-19

IT Services: Q2FY20 Preview – Q2 to set tone for second-half and beyond

Despite global trade, revenue growth for tier-I Indian IT services players has held steady for the last three quarters.

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03-Oct-19

Infrastructure: NHAI analyst meet update – upbeat on BMP awards

We attended an analyst meet hosted by NHAI on Bharatmala Pariyojana phase-I (BMP).

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03-Oct-19

Banking: Credit Tracker – August non-food credit growth plummets to <10%

RBI data on sectoral credit deployment indicates that growth in non-food credit slowed to a 17-month low of 9.8% in Aug’19, hobbled by lower growth across segments.

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03-Oct-19

Gold Finance NBFCs: Turning a corner

Gold loans being self-liquidating and well-collateralised, India’s top-2 gold finance NBFCs, MUTH and MGFL, have found favour with debt/liquid funds post the IL&FS crisis.

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02-Oct-19

Oil & Gas: GRM surge on IMO may sustain for long

The global transition to electric vehicles is a potent threat to oil demand growth over the long term, estimated to shrink oil consumption from road transportation at a ~0.5% CAGR over 2018-40.

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27-Sep-19

IT Services: Positive readthrough from Accenture results

Accenture posted record bookings worth US$ 12.9bn in Q4FY19, including 16 US$ 100mn+ TCV deals, besides guiding for 5-8% YoY CC revenue growth for FY20.

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27-Sep-19

Infrastructure: NHAI call takeaways – Order awards to gather pace from Q3

We spoke with V K Sharma – CGM (Land Acquisition) and Siba Narayan Nayak, CGM (Finance) of NHAI, for an update on land acquisition and order award targets for FY20.

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26-Sep-19

Banking: Tax cut to bolster earnings

The corporate tax cut provides much needed cheer for banks under our coverage – we raise FY21-FY22 earnings by 2-14% and ROE estimates by 30-220bps, but believe the near-term impact is already in the price.

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26-Sep-19

Banking: Credit Tracker – Business momentum remains sluggish

RBI data shows that credit and deposit growth for the fortnight ended 13 September were both weak at 10% YoY.

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26-Sep-19

Midcaps: Tax cut benefits capped by demand headwinds

We upgrade FY20 earnings by 2-11% for midcap companies under our coverage post the recent corporate tax cut.

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25-Sep-19

Logistics: Tax cut may have limited benefits; demand challenges persist

Our industry interactions suggest that while the recent corporate tax sop will aid earnings of select logistics companies within our coverage, the benefits may not be proportional to the cut as large corporate clients likely negotiate for better pricing.

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25-Sep-19

Oil & Gas: Gains from tax cuts – PSUs, gas utilities top bets

The tax rate cut announced by the government will be earnings accretive by 6-15% for energy companies in our coverage universe.

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25-Sep-19

Infrastructure: Corporate tax cut an earnings booster; HG Infra to gain the most

The corporate tax reduction announced last week will bump up standalone EPS by 2-13% for our infrastructure universe over FY20-FY22, with HGIEL benefiting the most.

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24-Sep-19

Pharmaceuticals: Corporate tax cut – bonanza for healthcare services

The corporate tax cut from 30% to 22% (including surcharge from 34.9% to 25.2%) effective FY20 could spur an 8-15% earnings upgrade for pharma MNCs (Not Rated) and Diagnostic players/hospitals (Not Rated), as well as a marginal 3-4% benefit for Divi’s Labs among our Indian pharma coverage.

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18-Sep-19

Logistics: Monthly Tracker – Slowdown continues to take a toll

High frequency indicators for logistics remained dull in Aug’19. Cargo volume growth at major ports softened to 1.2% YoY as a weak EXIM trajectory (–10.6% YoY) took a toll.

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16-Sep-19

BFSI & Midcaps: BOBCAPS BFSI & Midcaps Conference – Key takeaways

We hosted 23 corporates from the BFSI and midcap sectors for meetings with 50+ institutional clients at our conference in Mumbai on 13 September.

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03-Sep-19

Banking: Credit Tracker – July non-food credit growth feeble at 11%

RBI data on sectoral credit deployment indicates that non-food credit growth remained subdued at 11.4% YoY in Jul’19.

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03-Sep-19

Oil & Gas: Jul’19 natural gas consumption robust

Natural gas consumption in Jul'19 increased 4.8% YoY to 155.1mmscmd, as offtake increased across sectors (with the exception of power).

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30-Aug-19

Banking: Blockbuster merger – 10 PSBs fused into 4

In a mega move towards consolidation, the Finance Minister has announced the merger of 10 PSBs into 4 new entities, albeit with no definite timelines or swap ratios.

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28-Aug-19

Plastic Products: Anti-dumping duty on CPVC – Astral Poly a key beneficiary

India's finance ministry has imposed provisional anti-dumping duty (ADD) on CPVC resin/compounds imported from China and Korea for a period of six months starting 26 August.

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20-Aug-19

Banking: Credit Tracker – Credit growth remains lacklustre

RBI data shows subdued 12% YoY credit growth for the fortnight ended 02 August and stable 10% deposit growth.

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16-Aug-19

Logistics: Monthly Tracker – Major ports, container rail volumes improve; EXIM sluggish

High frequency indicators exhibited a mixed trend in Jul’19.

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02-Aug-19

Banking: Credit Tracker – June non-food credit growth sluggish at 11%

RBI data on sectoral credit deployment for Jun’19 indicates that non-food lending increased at a subdued 11.1% YoY for the month.

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18-Jul-19

Banking: Credit Tracker – Credit growth remains sluggish

RBI data shows that credit growth for the fortnight ended 05 July...

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