India Morning Report October 12, 2012: The Correction Continues Into The Weekend Close!

Also, India Closing Report (October 08-12, 2012)

The 5650 mark holding, markets see saw with two up days on Tuesdaya nd Thursday and rejuvenating interest in South East Asia and China with Chinese banks agains ppushed into increasing credit outlays at lower rates.

Portfolio investments in Inida have shown interest at current index levels between 5650 and 5675 and as expected rerating has seen knowledge of internals coming tot he fore with the JP group scrips making a late rally since midweek leading with JP Power and JP Infra but more pertinently, superior stock selection showing in Dr Reddys Sun Pharma, Bajaj Auto vs Hero Motocorp and even Maruit Suzuki. Healthcare uptrend continues with market expansion and 30% plus growth in Healthcare sector moving more investments to the sector while lowering hopes in Consumer Discretionary and Non Discretionary (FMCG)  leading to more movement towards ITC and Baja Auto and the returning bulls in Jubilant Foods as Yum foods plans for India and that of P&G find few listed companies for the bidding consumption wars.

The Power NBFCs incl REC and Powergrid (plus PFC and PTC) are on cue for the SEB Bad debt while SBI’s derating on 25 stock of restructured debt staying to cause heartburn even as sector scrips from NBFCs, M&M Financial, Bajaj and LIC Housing taking up the slack and ICICI Banka nd HSFC Bank moving into position for bumper results. Infosys seems to have avoided the Friday morning rush to prove its results on the investorate and the weekend will get busy rerating India’s old numero uno in GDP contribution, the IT Services and offshoring sector.

Infy reported lower Rupee revenue growth with less than INR 100B in Q2 Revenues and the USD revenue or the Net Profit weakness did not help them. The bargain price of Infy questionably could be below 2000 and not the current 2300 as management takes over the dias with network broadcasters. EBIT’s actually fallen sequentially despite the good Rupee Dollar Conversion in the quarter A rerating of the annual Dollar growth in revenues ( constant currency down to 5.7%) acould not be balanced by increase in wages. 98.58 B INR revenues up only 2% sequentially or $1.797 B in USD terms down from conservative estimates.


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