India Morning Report: Building up that range between 6300 and 6500, Energy Cos let fly

Call buying in the new year has resumed in 6500 and 6600 strikes underlining market confidence in making the upside while 6300 Puts define the bottom of the range (Sold puts always in a bull ‘candle’)

Also non food credit growth signifies Banknifty has less pressure on it to buy up its PSU components before the secular recovery takes hold in India Inc., right now recovery prospects led by better performing banks and corporates, even select Mid caps. BOI and All Bank seem to be in the buy rush but buyer beware doctrine applies nd we remain happy with PNB as March shows the having accounted for the bad losses and survived with better provisioning.

The Energy Cos are way ahead in the New Year esp if you include the rally on 30/31 as the pace of increases in Diesel prices and the increase in Non subsidized LPG confirm better prospects and however also confirm that the battle against the Fisc will last a long time unlike the chutbhiyas fighting it out for an ex Infy startup tickets in Bangalore (AAP gets a dirty linen in the streets fight with Pai and Bala joining against Nilekani)

Infy did start back at 3500 but there is a further downside risk from the fracas probably enthusing electorates and markets in its incipient hour tonight. HCL Tech is a great short right now to save your Bull Dollars. Cadilla and Glenmark remain the important buys with IDFC, YES and Bharti and ITC leading the Bull charge. Bharti tops its trading range around 345 and the ITC breakout is still long way to go in January.

Maruti sales hit rockbottom in December, so  I would have waited two weeks to confirm the trend for January before including them in the Volume breakouts. Sales at Toyota were down to 12k and Maruti a paltry 90k, this trend much like our Maid in Manhattan and her UN immunity spawned employer Devi Khobragade a little too ahead to go with real recovery trends, even belying equally bad sales in January too perhaps?

IIP ticks up again for December as and when data is processed but bank credit jump is part of the lag with no new projects expected in December – March and WPI will remain stressed near 7 levels and higher even without the customary poll sops in this season Indusind is not a good buy and that with the lack of buyers as volumes return this week means the bull ticks will be slow except for Power and Oilcos

India Morning Report: The Apple does not fall too far from the tree

India for old times’ sakes again proves IMF, Brady bonds and Latin American Economists wrong, going it alone with currency curbs as more visible Asian and even Turkish economies also try to get back the democracy equations into their control matrices and China parrumpums down the road of domestic consumption. Net effect for India, at least in Brazil they can afford three years of Bread and two years of rice for about four bus fares and /or a ticket to  World Cup Match from the new popular stands at spanking new stadiums. The G3 have each other to fund but India first has the poor to feed and then the loans to make to urban dwellers for auto, house and pretty much everything on EMI except the kindle which unlike the Blackberry will actually never take up with Indians

However, the new interest rate regime is not done with just upended 10% short rates in the overnights and the kingdom will get more expensive even as credit growth comes back and markets give into a little bear now and then to mull over the water in the wine that is their domestic production and consumption, waiting for investment to come into the Economy.

English: Logo of ITC Limited
English: Logo of ITC Limited (Photo credit: Wikipedia)

The higher rates as we discussed once earlier in 2008, could actually keep the domestic economy chirruping too, but then it is not going to be that long lasting because even if repo rates start going up because there is no growth and private credit growth slows down much from its barely 20% levels we would not get to long term rates beyond 9-10% to the eighties when these were a habitual 15-20% across shor 3 year and long 10 year maturities and are still the norm for consumer credit outside auto and home loans, currently apparently giving another cause for markets to expect higher rates for corporates and even banks Or maybe the EU still has what we want despite being a dying market (PMIS actually crossed 50 on the upside this month but markets are shrinking not growing) and like the EU and the 1% jumped British we might adopt 50% tax rates to get the right liquidity for the right causes. We would still not be a banana republic.

Back in the markets these above are probably not even water cooler/vending machine or m&m talk as results look like as we said, india maintaining those few precious growth stories that make it a well run, academically productive, encouraging for services, lean mean welfare fed growth machine.

I for one, liked ITC results though markets will ignore for another week its INR 20 Bln FMCG sales growing at 18% much like it earlier chose to ignore paperboards and agri business growth which also continue to be drivers at ITC while its asset management business (hotels) continue to be stable at INR 5 Bln and the bread and butter tobacco sales have just underperformed growing by 13% instead of the expected 18%++ More than one business school campus in India is looking at a gift horse in the mouth this year venturing into 400= batches at Ahmedabad, Calcutta and now Bangalore and Kozhikode too but then thats just the suspense kiling everyone.

Coke, Apple, Starbucks have already reported their June quarter performance globally and they will continue to vaunt(flaunt) their India investments in the hope of rightly placed analysts and commentators to catch the drift of their global potential and the flows that have decided to come to India at the “fag end of the recovery” ( at the begin of it in India) and will stay the course.

Yes Bank, Indusind ( esp with retail growth) and Kotak will survive the high rate environment and force growth pretty much par for the course and as we said it is foolhardy to expect ICICI Bank to fall from 940 levels but the likes of PNB could still be the weak chink till the trading equation metabolises the right values for a bigger rally cup. Jet may be as good a s gone from India but its FDI plan which will never see Indian inflows is probably the last gate allowed by Indians in the promise of the world they live on electronic channels and the internet broadband and should not pass muster with regulators allowing real FDI proposals to burnish the brand into local populations and etihad can stay the course in the knowledge that it alongwith khazana (Malaysia0 and Maxis, inched in through the small gap in India’s regulatory armor till here

As of now the Rupee is maintaining 58 levels and the indices have moved up after slipping to 5900 ina directionless market but we are infact recommending bullish trades but not for a quick buck in this market, still precluding any money for the bears/ shorts at these levels as mos stock levels reflect deep values available to buyers. Remember, there is no new outsourcing business coming from the developed world. Thats all there is to share.

India Afternoon Report: Sensex winds down to an Expiry Thursday

 

icici bank
icici bank (Photo credit: Wikipedia)

 

Nothing much happened though we missed the morning report because of the Bangalore early morning traffic and associated hassles. if you were one  of those who did not miss the Morning report then you ar elikely one of the associated reasons this blog and these reports are not dropping in on time or making such a difference e all make. So all of you out there do start missing anything we miss and get a little verbose on it when you do.

 

The markets ofcourse know its time to unwind traders itching to but no one is really ready to exit at these levels nor are they going to lgo low enough to trigger buying from those who wait.

 

The dichotomy between the investing priorities of the FIIs and the DIIs was obvious as ICICI Pru started unwinding on consumption initiating sell coverage on FMCG and consumption plays while FIIs and investors look for more market expansion plays in the wake of retail FDI each listed stock unfortunately quasi indicator for almost the sector than the promoter or the business strength esp at plays like Britannia Marico and Dabur even VIP almost undifferentiaated behind Jubilant and Titan.

 

Healthcare accumulation is what we root for and is already happening at more than just European banks and erstwhile short heavy india baiters. S&P reratings have helped the cause of the crrection and the result is a 30 point sorrection still above 5650 and a tad under 18400 for the Sensex.

 

Here anyway is the outlook for next week after expiry, tentative buying in banks 2 days out of 5 and a rally day run by a big hefty for the banks who have increased their contribution to the GDP to nearly 10% and banking assets with their continuous 16-20% growth esp with policy segueways for infra funding making infra stock of credit more than two fifths of the 45-50 Trillion credit stock we run to from a 44 T start of the deficit heavy fiscal.

 

 

 

The 11AM Update – Well I can’t tell you I am buying, hushh! Bajaj Auto reports good growth

A dull day nonetheless and without any buying data from market internals , it might well be the cliff OECD nations are facing for the next  20 years. The Power saga is especially threatening stability in Lucknow, Jaipur and even Bangalore, the new richest city in india measured in per capita income

Mining ban is due to be lifted soon but with state coffers empty and the Centre showing its hand by decisively asking ( MSA at head of PlanCom) for states to share the Debt restructuring burden in such a situation with SEBs is a trifle daunting for those waiting for reforms to be actioned before the markets move up

Indian states with younger CMs might be evaluating official bankruptcies already though India’s long federal history gives the traditional politician enough ammunition to get out of such triflings as another INR 3 Tr in unaccounted spending.

If I were in retail and could pass on prices to consumers as I proved i could, definitely I do not need to suffer much more pain on the exchanges.

Bin that bullish note on the Indian market, someone else got this FII investor / QFI (though he is still headed for India) 😀

A dull day nonetheless and without any buying data from market internals , it might well be the cliff OECD nations are facing for the next  20 years. The Power saga is especially threatening stability in Lucknow, Jaipur and even Bangalore, the new richest city in india measured in per capita income

Indian Rupee Symbol
Indian Rupee Symbol (Photo credit: vishuhospet)

Mining ban is due to be lifted soon but with state coffers empty and the Centre showing its hand by decisively asking ( MSA at head of PlanCom) for states to share the Debt restructuring burden in such a situation with SEBs is a trifle daunting for those waiting for reforms to be actioned before the markets move up

Indian states with younger CMs might be evaluating official bankruptcies already though India’s long federal history gives the traditional politician enough ammunition to get out of such triflings as another INR 3 Tr in unaccounted spending.

If I were in retail and could pass on prices to consumers as I proved i could, definitely I do not need to suffer much more pain on the exchanges.

Bin that bullish note on the Indian market, someone else got this FII investor / QFI (though he is still headed for India) 😀

BAJAJ AUTO profits of INR 7.2 B is good enough in the current situation esp the added challenges in Sri Lanka exports which are expected to fare better from here. Cons profit at INR 7.18 B infact beat expectation and buying has begun ( after some confetti on the wires, buzzed traders) Net Sales of 47 B or $1 B within a Quarter and Other Income is actually up using only month end forecx translations at INR182 Crs ( INR1.82B) up Rs 5 since i printed that buy intraday , now 10

All’s not well at Kingfisher Airlines (KFA)

The weekend has been super busy for the management of the airline at Bangalore as they rush to make

Vijay Mallya
Image by schuey via Flickr

amends with various stakeholders, governments recommend their case, FDI in Airlines gets approved. None of the banks have a large chunk of the exposure as one round of recast touched only 1000 crores in April-June 2011. The 65 bln debt then grew back to 75 bln and the airline seemingly never got around to issuing mor eequity.

A t this stage however, the airline has been quick to line up assets for sale, the banks having asserted a requirement of 800 cr or more in equity before restructuring is taken up and lines are extended for working capital(operational costs incl fuel and Salaries) 120 pilots ahd not turned up for duty on Friday and govt oil marketing companies assert that 2 months dues are pending. Lessors for the 120-140 aircraft fleet want their aircraft back as leases are treated as monthly rentals and each day costs the lessor more than KFA, es as bankruptcy administration becomes an option.

Sale of Kingfisher House (Mumbai) and even UB real estates KF World towers luxury residences in Bangalore will be mulled and prioritised  and the airline management has come back with a plan to reduce debt by half. It is not clear however how much of this will be restructured and how much will come from

Guinness for strenght
Image via Wikipedia

asset sales. We also mistakenly mentioned Diageo as an equity partner for UB, the flagship spirits and beer business of the company worth $1.5 bln in Spirits and $750 mln in beer sales annually at 60% and 50% national share of business. (India’s alcoholic beverages industry s at less than 5% of evental market size today as beer consumption comes to less than 1/2 case a year (per capita) USL owns 40% in KFA and 100% of the sports and real estate businesses(group stake in JV with Prestige and others). In spirits, he owns White & Mackay’s brands ($1 bln) and may bid for other premium brands like Teachers owned by Fortune Brands (US). A great biopic of Vijay Mallya is available on Scribd

Unsurprisingly, promoter Vijay Mallya finds govt taxes and regulation to be the basis of all his troubles. FDI in airlines is probably out by next week as an option for the airline. Nevertheless, quick government and management action has reassured markets with 200 cancelations by the airline on the weekend of iots 469 flights a day schedule

Vijay Mallya also recently sold a majority stake in his Formula 1 team to local baddy Sahara grp being tried for corporate governance overruns by the securities regulator. The IPL team, which has been in the Top 3 in the game of cricket (T20) may also command a similar premium for sake sales but the group is unlikely to make any hurried sales in the fledgling businesses. However , the banks are unlikely to back down in their request for more equity as the leverage is quite high and despite the last restructuring/conversion to equity at a 60% premium to then pricing and a 200% premium to today’s price, banks alrdy hold a 23% stake in the airline.

India’s Top 10 cities

If you have ben reading for the Nielsen report for the Country’s top urban centers, this one’s even one step ahead in mapping the affluent consumer centers in the coming decade. take a look. it’s mostly Bangalore, Ahmedabad and some surprises:

India’s 10 Fastest Growing Cities
M. Tharini
Thursday, 29 January 2009 00:00
A lot has been commented about India’s vigorous economic growth with economists forecasting a bright future for the country. But some know of the growing Indian cities that are feeding to the nation’s growth. So which are the country’s fastest growing cities? Read on to find out.SURAT – Growth rate 11.5% – Surat is Gujarat’s 2nd biggest city with a population of 4 million. It is the fastest growing Indian city in terms of economic prosperity. The city has met an annualized GDP growth rate of 11.5 % over the past 7 fiscal years, as per the data computed by economic research firm Indicus Analytics. Popular for its thriving diamond and textile industry, Surat is located on the banks of the Tapti River. Over 90 % of world’s diamonds are cut and shined here. These 2 industries have hugely shared to the city’s growth as the economic powerhouse of India. Though always affected by floods and earthquakes, the city has often come out on top. Enhanced infrastructure has been significant to Surat’s quick rise. A number of elevated roads and flyovers have contributed the thriving diamond and textile business of the city. The city’s Varachcha flyover is claimed to be India’s longest. Surat with its low unemployment rates, high job rates and one of the highest per capita small business Credit is the best land for jobs and business. It is told that if you wish to make money, Surat is the place to be in.

BANGALORE – Growth rate 10.3% – What was knows as the Pensioners’ Paradise 10 years back, has emerged 10-fold now and a study states that the rupee millionaire club in Karnataka’s capital is the most crowded in India. Bangalore also boasts of owing the largest number of households with an annual income of Rs 10 lakhs (Rs 1 million) or more. With an estimated population of 6.5 million, Bangalore is 1 of India’s most populous cities. How has this city which was more popular for its gardens and laid-back lifestyle modified so much in character? The 2 reasons that come to every Bangalorean’s mind are: the start of the IT industry, and subsequently the boom in real estate prices. Unlike other cities in India, Bangalore’s main activity is information technology and information technology-enabled services. Being the prominent contributor to India’s IT industry, the city is always referred to as the Silicon Valley of India. Software majors Infosys and Wipro being headquartered in the city, Bangalore contributed 33 % of India’s Rs 144,214 crore ($ 32 billion) IT exports in 2006-07. Businesses comprising large corporate that are either multinational companies or Indian firms dealing with or serving to MNCs recruit a very large workforce in Bangalore. And although the city’s infrastructure has been unable to stay pace with the fast growth of the city, Bangalore still remains one of India’s boom towns.

AHMEDABAD – Growth rate 10.1% The – Ahmedabad region, comprising Gandhinagar, of Gujarat is the biggest inland industrial centre in western India and has been a significant base of commerce, trade and industry. With a population of 56 lakh (5.6 million) Ahmedabad has kept great prosperity because of its proximity to Surat and its access to the hinterland of Gujarat. Though dusty roads and bungalows used to cover the city once, Ahmedabad is now evident a major construction boom and a rise in population. In recent years, the city has seen an important rise in information technology and scientific industries. Apart from these, chemicals and pharmaceutical industries share to the state’s economic growth, with 2 of the biggest pharmaceutical companies of India — Zydus Cadila and Torrent Pharmaceuticals being based here. Ahmedabad also forms the corporate headquarter of the Nirma group of industries and Adani group. Of late, several foreign companies have plan up their units here. Among them, Bosch Rexroth of Germany, Stork and Rollepaal of Netherlands deserve valuable mention.

MUMBAI – Growth rate: 8.5% – The commercial capital of India is one of the world’s top 10 trade centers. The city aids 25 % of industrial output and 70 % of capital transactions to India’s economy. The city response for about 1 % of the total population in India but has a per capita income which is almost 3 times that of India. Mumbai accounts for 14 % of India’s income tax collections and 37 % of the corporate tax collections in the country. The city is the berth of important financial institutions like the Reserve Bank of India, Bombay Stock Exchange and the National Stock Exchange of India. One of the biggest special economic zones in India is being set up in Navi Mumbai, to be sprawl over an area of around 50 square kilometers. Many corporate and multinational companies have their headquarters in the city that earns migrants from all around India. The city provides countless employment opportunities and is famous for its interesting and high standard of living. The city, with a population of 19 million, is also called as the Indian seat of entertainment as it is the home to the Hindi film industry, the biggest in the world. Most of the city’s inhabitants depend on public transport to commute. Transport systems in Mumbai comprise the Mumbai suburban railway, also known as the lifeline of Mumbai, BEST buses, taxis and auto rickshaws.

NEW DELHI – Growth rate: 8.4% – Though it can’t match Mumbai in terms of contribution to the growth of the Indian economy, the capital of India, is no pushover. Delhi’s, (comprising its 9 districts and adjoining Noida, Ghaziabad, Faridabad and Gurgaon) total GDP stood at Rs 1,60,739 crore (Rs 1,607.39 billion). It shares 4.94 % to all-India GDP. Connaught Place, one of northern India’s biggest financial centres, is situated in the heart of Delhi. Being a vital commercial centre in South Asia, Delhi has a per capita income of Rs 53,976, which is more than double the national average. Delhi’s main service industries, supported by as strong and well laid out infrastructure, add hotels, banking, IT, telecommunications, media and tourism. In recent times, Delhi’s manufacturing industry has emerged considerably and consumer goods industries have established manufacturing units and headquarters in and around the capital. Construction, health, power, telecommunications, community services, and real estate form the backbone of Delhi’s economy. The capital’s retail industry is 1 of the fastest growing industries in India. Public transport in Delhi includes buses, auto rickshaws, taxis, suburban railways and metro rail.

HYDERABAD – Growth rate: 7.8% Hyderabad, the financial capital of Andhra Pradesh, is also called as the city of pearls. With an estimated population of 7 million, the city is the biggest contributor to Andhra Pradesh’s gross domestic product, state tax and excise revenues. As per 2006 statistics, the per capita income of Andhra Pradesh was at Rs 25,625 (less than Rs 200 of national average). The city, which utilized to be primarily a service city, is presently the seat of several businesses, adding trade, communication, transport, commerce, storage, and lately IT. Like Bangalore, Hyderabad also has witnessed a real estate boom in recent times, mainly because of the growth of IT and retail business in the city. Major pharmaceutical companies such as Dr Reddy’s Laboratories, Matrix Laboratories, Aurobindo Pharma Limited and Vimta Labs are landed here. Hyderabad has also done considerable results in the field of bio-technology through initiatives like Genome Valley and Nanotechnology Park. For the advancement of infrastructure in the city, the Andhra Pradesh government is building a skyscraper business district at Manchirevula

PUNE – Growth rate: 7.4% – The growth of this major industrial city, situated roughly 150 km east of Mumbai, has turned the topic of discussion these days. Right from automobile majors such as Tata Motors, DaimlerChrysler, Pune will soon house units of international biggies such as General Motors, Volkswagen, Fiat, et cetera. A number of significant engineering goods industries like Cummins Engines Co Ltd and Bharat Forge Ltd, electronic goods companies like LG, Whirlpool, food companies like Frito Lay and Coca Cola are also put here. Of late, Pune’s software industry has grown by leaps and bounds. IT parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyani Nagar are seats of technology that the city can boast of. To face the demands of this explosive economic growth in Pune, the state of Maharashtra is planning a 1,000 MW power plant to uniquely service to the requirement of Pune. MIDC is the lead agency for the project.

BARDHAMAN – Growth rate: 6.6% – Located nearly 100 km north-west of Kolkata, Bardhaman is headquarter of the district of the same name. With about 58 % of the population gaining their livelihood from agriculture, Bardhaman has received the name of ‘granary of West Bengal’. Rice grown in the area is supplied to different parts of India and also exported to the neighboring countries. Though predominantly an agricultural area, Bardhaman also houses a number of industries supported mainly by rich mineral sources available in the area and also imported from the neighboring Indian states of Bihar, Orissa and Assam. The industrial belt of Bardhaman has mainly developed embracing the Asansol and Durgapur sub-division. 2 most pioneer industrial units of the area are Durgapur Steel Plant and Durgapur Alloy Steel Plant. Other industries that thrive in the area consisting coal-based industries, chemicals and power plants. The Damodar Valley Project has gone a long away in getting the irrigational need of the region. Indian Iron and Steel Industry (IISCO) form the economic backbone of Asansol area. It is the oldest pig iron and iron casting unit in India. Chittranjan Locomotive, a government undertaking, supplies locomotive parts all around India. Many cottage industries have also developed in the area that support the area’s rural economy.

KOLKATA – Growth rate: 6.3% – Often termed lovingly as the cultural headquarter of India, the capital of West Bengal has a population of 5 million. Like its several other metropolitan cousins, Kolkata incurred from economic stagnation in post-independence India. However, since 2000, the city has evidenced an economic rejuvenation, thanks to the development of IT industry in Rajarhat in Greater Kolkata. The city’s IT sector is developing at 70 % annually – double that of the national average. The city has seen a surge of investments in the housing infrastructure sector. Many new projects have come up in recent times. Some reputed companies are headquartered here. Of them, ITC Limited, Birla Corporation, Bata India, Domodar Valley Corporation deserves special mention. Opening of the Nathu La in Sikkim as a trade route has put Kolkata in a beneficial position. Like other metropolitan cities of India, Kolkata continues to struggle with problems such as poverty, pollution and traffic congestion.

CHENNAI – Growth rate: 6.2% – The capital of Tamil Nadu, the 4th largest metropolitan city in India, has an estimated population of 7.5 million. The economy of the city is aided by industries like automobile, technology, hardware manufacturing, and healthcare. As per recent report in The Hindu, economists have forecasted that Chennai’s per capita income would rise from $468 in 2000 to $1149 in 2015 and $17,366 in 2050. The city houses India’s major automobile companies and happens to be India’s second-largest exporter of information technology and information-technology-enabled services, after Bangalore. Buses, trains, and auto rickshaws are the most general form of transport within the city. To counter traffic congestion, the state government of Tamil Nadu is building a number of flyovers at significant intersections.
[Tags India Infrastructure, Retail Lifestyle, Lifestyle Economy]
[Category India, Lifestyle]

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Selling retail while waiting outside..

If they had any sense they would let just metro open on mg road and shut down this shopping district #Bangalore
In fact i can get you good retail space at less than 5000 psft in Bidadi #Bangalore @enjoy_bangalore
Rentals less than 4$ psft #Bangalore @enjoy_bangalore
M G Road and CMH ROAD can make nice parking lots #Bangalore @enjoy_bangalore
TV9 showing disturbing images of unkempt service roads inside expensive and congested bangalore colonies #Bangalore @enjoy_bangalore

Loving music and South Africa really gave Windies a thulping with my large ‘glass’ of Reserva

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