Value investor- India mid & small caps

Bhaskar Chakraborty

Equity Bottom-Up

PNB Housing Finance Ltd / Equity Bottom-Up

<ul><li>Borrowing costs are increasing at the short as well as long end as banking liquidity approaches neutral zone</li><li>Housing finance companies (HFCs) had rapidly increased the share of market borrowings in their liability profiles to benefit from lower rates. Now, with borrowings turning dear, we expect pressure on NIMs on increase over FY19 as many HFCs have significant ALM mismatches in the short end.</li><li>Intense competition reflecting in elevated repayment rates will further pressure NIMs</li><li>NBFC valuations that had reached lifetime high levels should compress in our view as earnings growth slows over FY19-20.</li></ul>

Borrowing costs are increasing at the short as well as long end as banking liquidity approaches neutral zoneHousing finance companies (HFCs) had rapidly increased the share of market borrowings in their liability profiles to benefit from lower rates. Now, with borrowings turning dear, we expect pressure on NIMs on increase over FY19 as many HFCs have significant ALM mismatches in the short end.Intense competition reflecting in elevated repayment rates will further pressure NIMsNBFC valuations that had reached lifetime high levels should compress in our view as earnings growth slows over FY19-20.

India Housing Fin Cos: At the Cusp of a De-Rating

India - Politics, Industrials, IT and Large Caps, EMAlpha

Pankaj Sharma

India - Politics, Industrials, IT and Large Caps

Thematic (Sector/Industry)

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<a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India (SBIN IN)</a> looking at renewable energy to boost loan growth</h2>In one of his important statements, the <a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India (SBIN IN)</a> or SBI Chairman Rajnish Kumar has said that the key areas for loan growth are railways, roads and renewable energy (<a href="http://www.livemint.com/Industry/PNKf82VK03g9utz4OZDs7I/SBI-looking-at-renewables-roads-sectors-to-boost-loan-growt.html" target="_blank">News report</a>). We think that this statement is important for two reasons:<ol><li>SBI is the largest lender in India and the most important Public Sector Bank (PSBs are Govt of India owned) in India. It is also one of the key lenders to…</li></ol>


State Bank Of India (SBIN IN) looking at renewable energy to boost loan growthIn one of his important statements, the State Bank Of India (SBIN IN) or SBI Chairman Rajnish Kumar has said that the key areas for loan growth are railways, roads and renewable energy (News report). We think that this statement is important for two reasons:SBI is the largest lender in India and the most important Public Sector Bank (PSBs are Govt of India owned) in India. It is also one of the key lenders to…

India: Why the Most Recent Statement of State Bank of India Chief Makes Us Nervous?

Senior investment analyst

Pallavi Deshpande

The 2Q18 results of large public sector banks (PSBs), <a href="https://www.smartkarma.com/entities/542" target="_blank" data-smartkarma-citation="entities:542:1">Punjab National Bank (PNB IN)</a> and <a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India (SBIN IN)</a>, saw a significant decline in slippages QoQ. However, we believe with the PSBs planning to raise capital through Qualified Investor Programme (QIPs) over the next few months, NPL recognition may take a backseat. We believe this is a set back for the sector, which benefited from RBI's asset quality reviews instituted in 2015 and the setting up of the National Company Law Tribunal…

The 2Q18 results of large public sector banks (PSBs), Punjab National Bank (PNB IN) and State Bank Of India (SBIN IN), saw a significant decline in slippages QoQ. However, we believe with the PSBs planning to raise capital through Qualified Investor Programme (QIPs) over the next few months, NPL recognition may take a backseat. We believe this is a set back for the sector, which benefited from RBI's asset quality reviews instituted in 2015 and the setting up of the National Company Law Tribunal…

Large Public Banks: NPL Recognition to Take a Breather

Three recent important quarterly results from industry leaders indicate that there are no strong recovery signals in Indian economy. These companies are the largest lender <a href="https://www.smartkarma.com/entities/160" target="_blank">State Bank Of India (SBIN IN)</a>, largest Engineering &amp; Construction company <a href="https://www.smartkarma.com/entities/2499" target="_blank">Larsen &amp; Toubro Ltd (LT IN)</a> and FMCG major <a href="https://www.smartkarma.com/entities/16495" target="_blank">Britannia Industries Ltd (BRIT IN)</a>. This means that the recovery in Indian economy will be slow and data points will continue to be erratic. For example, the recent data on Industrial Production, Inflation, Auto Sales, the Core Industries and the Business Confidence Indices. The most keenly watched next data points will be Q2 FY18 GDP growth and what RBI will do on interest rates in the month of December.

Three recent important quarterly results from industry leaders indicate that there are no strong recovery signals in Indian economy. These companies are the largest lender State Bank Of India (SBIN IN), largest Engineering &amp; Construction company Larsen &amp; Toubro Ltd (LT IN) and FMCG major Britannia Industries Ltd (BRIT IN). This means that the recovery in Indian economy will be slow and data points will continue to be erratic. For example, the recent data on Industrial Production, Inflation, Auto Sales, the Core Industries and the Business Confidence Indices. The most keenly watched next data points will be Q2 FY18 GDP growth and what RBI will do on interest rates in the month of December.

India: Three Important Recent 2Q Results and What Do They Tell Us About State of Indian Economy?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Asia is leading EM higher.  In this week's Chart Book, we highlight the following themes and actionable charts: <ul><li>Overweight Asia. In today’s report we highlight a broad array of actionable names within the Asia region ... see pages 3-6</li><li>Indian banks are breaking out. India’s state banks broke out last week in response to the government’s announcement of a $32.5 billion recapitalization plan. Actionable ideas: Punjab National Bank (532461-IN), State Bank of India (500112-IN), ICICI Bank (532174-IN)... see page 2</li><li>Leading Sectors. EM sectors exhibiting attractive relative strength trends include: consumer discretionary, energy, financials, health care, materials, and tech. This (mostly) cyclical line-up supports a risk-on outlook. When defensive sectors exhibit improving relative strength, then we’ll turn cautious on EM’s advance.</li></ul>

Asia is leading EM higher.  In this week's Chart Book, we highlight the following themes and actionable charts: Overweight Asia. In today’s report we highlight a broad array of actionable names within the Asia region ... see pages 3-6Indian banks are breaking out. India’s state banks broke out last week in response to the government’s announcement of a $32.5 billion recapitalization plan. Actionable ideas: Punjab National Bank (532461-IN), State Bank of India (500112-IN), ICICI Bank (532174-IN)... see page 2Leading Sectors. EM sectors exhibiting attractive relative strength trends include: consumer discretionary, energy, financials, health care, materials, and tech. This (mostly) cyclical line-up supports a risk-on outlook. When defensive sectors exhibit improving relative strength, then we’ll turn cautious on EM’s advance.

EM Technicals: Overweight Asia; Indian Banks Are Breaking Out; Bottom-Up Ideas

India

State Bank of India provides a wide range of banking and financial services to corporate, institutional, commercial, agricultural, industrial and individual customers throughout India.  The Bank also provides international banking to its Indian customers and has operations in other countries.

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State Bank Of India (SBIN IN)

India Housing Fin Cos: At the Cusp of a De-Rating

Borrowing costs are increasing at the short as well as long end as banking liquidity approaches neutral zone Housing finance companies (HFCs) had...

Bhaskar Chakraborty

India: Why the Most Recent Statement of State Bank of India Chief Makes Us Nervous?

State Bank Of India (SBIN IN) looking at renewable energy to boost loan growthIn one of his important statements, the State Bank Of India (SBIN...

Pankaj Sharma

Large Public Banks: NPL Recognition to Take a Breather

The 2Q18 results of large public sector banks (PSBs), Punjab National Bank (PNB IN) and State Bank Of India (SBIN IN), saw a significant decline in...

Pallavi Deshpande

India: Three Important Recent 2Q Results and What Do They Tell Us About State of Indian Economy?

Three recent important quarterly results from industry leaders indicate that there are no strong recovery signals in Indian economy. These...

Pankaj Sharma

EM Technicals: Overweight Asia; Indian Banks Are Breaking Out; Bottom-Up Ideas

Asia is leading EM higher. In this week's Chart Book, we highlight the following themes and actionable charts: Overweight Asia. In today’s...

Vermilion Research

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