{LONGTERMINVESTORS} Morning Call

 

Dear all,

    Markets end at 52-week closing high on July expiry

Ø  Indian shares rallied as investor sentiments remained positive by encouraging earnings reports from the likes of Bharti Airtel and Asian Paints, gains in rupee and robust inflow of portfolio investment, as the government moved a step closer to passage of the much-awaited GST Bill in the Upper House of Parliament.

Ø  Global risk appetite was muted as global markets turned more defensive in the wake of mixed earnings results, little clarity in the Federal Reserve's policy statement on the next rate hike and amid caution ahead of the Bank of Japan's policy review, due Friday.

   Global Macro

Ø  The Federal Reserve left the target range for its federal funds rate unchanged at 0.25% to 0.5% for the fifth time during its July 2016 meeting.

Ø  Singapore's seasonally adjusted jobless rate stood at 2.1% in the second quarter of 2016, up from 1.9% in the previous quarter and above market expectations.     

  Corporate Buzz 

Ø  Shriram City Union Finance's  Net interest income increased by 20%YoY to INR 6.9bn. PAT remained healthy at 2.8bn witnessing a growth of 23%YoY. Asset quality was stable wih GNPA at 5.11% decreased marginally by 4bps QoQ.

Ø  Eicher Motors' consolidated earnings matched analysts' estimates with PAT growing sharply by 58.6% to INR 3.76bn driven by strong revenue as well as operational performance in Royal Enfield business.Revenue increased 42% to INR 15.5bn in 1QFY16 as compared with INR 10.9bn in 1QFY16.

Ø  Welspun Corp logged a consolidated net loss of INR 94.5mn in 1QFY17 as against a net profit of INR 1.04bn in 1QFY16. However, it recorded a 3%YoYgrowth in income from operations at INR 15.6bn.

Ø  Dish TV 's consolidated earnings missed analysts expectations but subscriber addition was far ahead of estimates. PAT declined 24.5%YoY to INR 409m in 1QFY17 dented by tax expenses and lower other income. Revenue increased 5.7%YoY to INR 7.78bn supported by subscription revenue that grew by 6.7% to INR 7.28bn. Average revenue per user was unchanged QoQ at INR 174.

Ø  Syndicate Bank's PAT plunged 73.8% to INR 790mn in 1QFY17 impacted by higher provisions and lower operating profit. Net interest income increased 4.7% to INR 14.79bn. NIM stood at 2.22% in 1QFY17 higher marginally compared with 2.14% in 1QFY16. Asset quality weakened further as NPA stood at 7.53% against 6.7% in 4QFY16.

Ø  Hexaware's consolidated Income from operations increased by 6%QoQ to INR 8.69bn in 1QFY17 and PAT increased by 18.8%QoQ to INR 0.99bn in 1QFY17.

Ø  Escorts's standalone Total income from operations increased by 9.4%YoY to INR 10.5bn in 1QFY17 and PAT (Including OCI) increased by 33.5%YoY to INR 470mn in 1QFY17.

   Outlook

Ø  Benchmark indices are likely to open on a cautious note amidst mixed global cues.

 

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Regards,

CSEC Research

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