Stock Market Bliss | Top Indian Stock Market Blog

Arshiya International Limited- AIL going strong with its FTWZ business- Margins and Profitability expected to improve. Arshiya International (AIL) has pioneered the development and operations of a Unified Supply Chain Infrastructure and Solutions - comprising Free Trade & Warehousing Zones (FTWZ), Industrial and Distribution Hubs, Rail & Rail Infrastructure, Transport & Handling, Forwarding and Supply Chain Technology & Management. AIL has started its Khurja FTWZ with 2 warehouses and  it can be estimated that the company to ramp it up to 4 by end of FY13E. The company is already operating 4 warehouses at Panvel FTWZ and we estimate the company to ramp it up to 8 warehouses by end of FY13E. In the rail segment the company operates 20 rakes currently which they would ramp up to 30 by end of FY13E. The company continues to grow steadily in its core third party logistics (3PL) businesses. The company is expected to deliver revenue CAGR of 24% over FY12 to FY14E to ~ Rs...

Market Strategy : The benchmark indices remained range bound during the past month. Weak global markets and absence of fiscal stimulus measures weighed on the markets. The Vote-on-account, which was presented during the month,failed to cheer the markets as the Finance Minister did not offer any specific measures to further stimulate the economy. At the same time, the vote-on-account highlighted the elevated level of fiscal deficit. On the US front, investors treated the new Financial Stability Plan with skepticism over lack of details. Markets in the US tumbled to multi-year lows. Economic activity shrunk appreciably across major regions. Fresh concerns on deteriorating prospects of emerging European economies resulted in weak eurozone markets. The quarterly results have not provided any additional visibility on prospects in FY10. The excise duty cut has largely failed to have any meaningful impact on the respective sectors stocks. With no more macro triggers expected in the current qu...

Economy Update: November IIP – Bounced back into positive zone. The index of industrial production (IIP) for November 2008 increased 2.4%, as compared to 4.9% growth in November 2007. Mining, manufacturing and electricity grew at 0.5%, 2.4% and 3.1%, respectively during November, 2008.The capital goods declined 2.3%, whereas intermediate good and consumer goods rebounded into positive zone by growing at 2.6% and 4.4%, respectively. The cumulative growth for April-November 2008-09 stands at 3.9% over the corresponding period of the previous year. At the same time, IIP growth for October 2008 has been revised upwards to 0.3% decline from the previously reported decline of 0.4%. The recent fall in inflation would provide greater leeway to RBI for taking softer monetary stance, going forward. In our view, further fiscal stimulus by the government is less likely, given their fiscal position.

Economy Update: Another Monetary & Fiscal Stimulus Package • RBI has cut the Cash Reserve Ratio (CRR) by 50 bps from 5.5% to 5.0% with effect from fortnight beginning January 17, 2009. • RBI also reduced the Repo and Reverse repo rate under LAF window by 100 bps each to 5.5% and 4.0%, respectively with immediate effect. • The reduction in CRR is likely to inject additional liquidity Rs.200 bn to the financial system. • The cut in policy rates as well CRR would further enable banks to reduce their lending rates (of course accompanied by reduction in deposit rates!!) • The government in tandem with the Central Bank has also announced second stimulus package to invigorate the sagging economic activities. Economy Update: Market Strategy In January, markets will focus on potential government (fiscal measures) and RBI actions (further interest rate cuts). A rise in geopolitical tensions in the South Asian region may keep markets nervous. Markets would focus attention on the US as the new...

The index of industrial production (IIP) for October 2008 declined 0.4%, as compared to 12.2% growth in October 2007 on back of 1.2% decline in manufacturing sector and lower growth in mining sector.Mining and electricity grew at 2.8% and 4.4%, respectively during October, 2008 whereas manufacturing sector witnessed decline of 1.2% during the same period. Intermediate goods (weight: 26.51%) and consumer goods (weight: 28.67%) declined by 3.7% and 2.3%, respectively. A decline for three consecutive months in Intermediate goods is a cause of concern. The cumulative growth for April-October 2008-09 stands at 4.1% over the corresponding period of the previous year. At the same time, IIP growth for September 2008 has been revised upwards to 5.4% from 4.8% earlier. The leading indicators like automobile sales, exports and excise tax collections etc have been suggesting that October & November IIP number would be weak. We believe that the broad moderation in IIP would continue for the res...

November saw significant action being taken by several countries to defreeze the credit markets and protect their banking systems. Large fiscal stimulus was announced by the EU and China. India also took measured steps first to enhance liquidity in the system and then to soften borrowing costs. Fundamentally, India remains on a relatively better footing (albeit with slower growth) with no significant impact on the banking system, in our opinion. The potential slowdown in the Indian economy has impacted equity markets which, in our opinion, are now discounting the same. Valuations at about 10x-11x current year earnings, are not demanding, though they are higher than most Asian peers, according to consensus estimates. Falling commodity prices provide comfort on the inflation and interest rates front. We believe that, fiscal / monetary measures and higher risk appetite (stabilization in FII flows) will be the triggers for an up-move in the markets. We maintain that, in the short term, mar...

IIP slowing down The Index of Industrial Production (IIP) grew by 4.8% for September 2008. The September 2008 IIP growth numbers has confirmed the slowing economic growth trend observed during past few months. Core Infrastructure industries slowing down The index of infrastructure industries holds a 26.7% weight in Index of Industrial Production (IIP). The index reflecting growth in the core infrastructure sector has indicated a relatively slower growth for the April-September 2008 period at as 3.9% . RBI Measures to boost liquidity CRR and Repo rate cut by 350bps cut in CRR to 5.50% from and also a 150bps reduction in Repo Rate to 7,5% from 9.0% RBI has allowed HFCs to raise up to $10 mn or 50% of the net owned funds as ECB. RBI reduced the provisioning on standard advances in the commercial real estate sector, personal loans, capital market exposure and NBFCs (ND) to 0.4% from 2.0% previously. Corporate capital expenditure to grow at a slower pace in 2008-09. For 2008-09 companies ha...