First the note on infracos that have unsettled the markets
What markets had initially identified as a resilient strain of Corporate misgovernance in infracos from GMR and Reliance Infra had apparently never been a cured mutation despite consistent action and PR by the companies. Even today when the infra gap is being addressed, because of group leverage showing on the holding companies, GMR, Reliance Infra remain active short candidates especially for those bullish on Kushal Singh’s DLF despite its bad results. Hoever, the short interest looking actively to rerate the markets has probably been snuffed in the bud and will likely lose out in this cycle as the day progresses today.
Brokerages re-rate SBI and Tata Motors
Expected disappointments from Tata Motors and on expected resilience from the State Bank panning out a lot of uptick has come in for both stocks, At 249, Tata Motors is indeed a good defensive buy and its JLR performance can only improve as it seems to have managed to keep sales volume increasing esp in China where they grew by 50%. JP Morgan and UBS have also upgraded SBI as the bank’s chairman explained on the networks that domestic NIMs are a healthy 3.75% and the international book stable with NIMs of 1.7% , in itself a very good performance given that the State Bank’s International portfolio jurisdictions are not in politically challenged geographies like BOB has.
The Sun Pharma and DRL conundrum
At this bottom of the Nifty cycle , the other cvonundrum also gets highlighted as growth successes like Sun joust with almost regular failures like DRL and Ranbaxy that have lost the confidence of investors but keep the sector rated as a defensive. Emerging Midcap Stocks including Glenmark, Cadila and even Biocon are thus seen as having capped prospectsmuch like the consumer goods stories like Dabur, Marico and Unilever but most analysts have distinctly berated the laggards and moved the active investments to an aggressive growth cycle so passive investors and DIIs have to follow in due course.
And the ascent begins..
However, these are but regulation battles at the end of results season in India Inc’s diverse investor and corporate objectives’ joust for relevance and India’s uniqueness as a 5% + growth destination has not been lost to the cycle , the entire move down and the restlessness in the markets likely to be attributed to pre budget jitters in statstically consist4ent studies over the next decade as this inflection point is real and investors relevant to India stories carefully watching even if from the sidelines, checking if the stories fed to them by domestic media and other interfaces about India’s struggles are as unlikely as growth sponsors of the country make it out to be and perhaps convinced by as tately transition in 2014 under a new government that hopefully will be more of the old.
Private Banks like ICICI are likely to enjoy today’s mini rally from 5870 levels in rare moment s of perfect correlation with the State Bank and exploratory shorts run out if the OMCs are indeed able to puh thru a round of Oil price hikes on the weekend. Europe has of course scared global prospects for 2013 and that impact has probably run its course by the end of next week fully. q. GS
- INDIA MORNING REPORT: A Bid on the State Bank results, are Coal and Steel indeed back? (awardz.wordpress.com)
- India Morning Report: Week opens on a buoyant note (awardz.wordpress.com)
- Tata Motors quarterly profit falls 50 percent (miamiherald.com)
- Bank Earnings Season (India Earnings) : State Bank puts provisioning past too (awardz.wordpress.com)
- India Morning Report: A dozen successful OFS to close the year (awardz.wordpress.com)
- SBI profit up at sluggish 4 percent in third quarter (news.in.msn.com)
- India Morning Report: A Hindi speech for another wannabe and more such stable tenets of Indian realism. (awardz.wordpress.com)