Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.
U.S. stocks closed lower on Tuesday, pulling back from record highs set earlier in the session, as investors weighed the possibility of a government shutdown.
Asian stocks traded in negative territory early on Wednesday after Wall Street closed lower in the previous session.
Market is expected to open flattish note and likely to witness range bound during the day
Sun Pharma got a license to sell the generic version of Linzess in U.S. from Feb. 1, 2031 after settling patent litigation.
Texmaco Rail considering setting up logistics hub and food park in West Bengal.
Pioneer Distilleries’ workers at its Nanded, Maharashtra manufacturing plant go on strike.
GAIL, Gazprom sign pact for re-negotiated long-term LNG sale.
Symphony’s wall mounted air cooler patented in South Africa; launched 2 new product ranges.
TCS has signed an over GBP 500 million deal with M&G Bajaj Finance will acquire 12.60 % stake in mobile wallet company Mobikwik as against 10.83 % stated earlier due to a change in conversion price of the compulsory convertible cumulative preference shares.
Infosys launches Infosys business assurance store Retail Research Desk –Amber Enterprises Ltd – IPO note - Amber Enterprises Limited (AEL) is a market leader in the RAC OEM/ODM industry in India with a market share of 55.4% in terms of volume in FY17. Over the years the company has become a one-stop solutions provider for the major brands in the RAC industry and currently serves eight out of the 10 top RAC brands in India. From a single factory in Rajpura, Punjab, that commenced operations in 1994, it has today grown to 11 manufacturing facilities across seven locations in India.
AEL has shown consistent growth in sales as well as profitability. Sales have grown at 17% CAGR between FY13-17 as compared to industry’s growth of 10%. EBITDA growth has been in-line with revenue growth at 16.6% however as the company was in investing mode to create a base, the depreciation and interest have been higher, dragging the overall PAT growth to 9%.
With the IPO funds, the company intends to repay most of the debt, which would trickle down the growth benefits to bottom-line as well.
Moving away from the conventional comparison, we are putting Amber in the same bracket as auto ancillary companies. We believe Amber’s is working as an ancillary to RAC market. Also, in our comparison we have found similar parameters between them like mid-teens ROEs, high single digit margins etc. At upper band, it is commanding 10% premium to auto ancillaries’ valuation which we believe is justifiable considering it is a leader in its space.
We like the industry and the backward integrated business model of the company. We believe the investment phase of the company is now coming to end and hence the benefits would stat reflecting on the numbers along with the healthier balance sheet status. We recommend investors to subscribe the issue for long term gains.
Institutional Desk - Economist’s Views- Union Budget 2018-19- Indian Economy- Pre-election Budget To Have Populist Tilt, Slower Pace Of Consolidation: A populist tilt is expected in the Union Budget for 2018-19, with renewed focus on rural and agricultural spending. We expect the Central government’s fiscal deficit for FY18 to come in at 3.5% of gross domestic product or GDP, against the budgeted 3.2%. We believe the government remains committed to fiscal consolidation, but may do it at a slower pace. Therefore, in our view, the government is likely to target a fiscal deficit of 3.2% of GDP for FY19, higher than the 3.0% target laid down by the N.K. Singh Committee, but staying within the escape clause which allows for a deviation of about 0.5% of GDP. The government has been inclined towards capital spending, while keeping revenue spending under check. Nevertheless, while the government is likely to budget for capital expenditure rising at a faster pace than revenue spending, the compulsions of an election year will ensure that revenue spending will not be far behind. The government does not have much room to tinker with taxes, given the uncertainty around Goods and Services Tax or GST revenues, but we expect a marginal reduction in the corporate tax rate, in line with the announcement made in the Union Budget for 2015-16 to reduce the corporate tax rate from 30% to 25%, as territorial competition on the basis of tax rates is now increasing. In our view, net market borrowing is likely to be to the tune of Rs4,050bn (67% of gross fiscal deficit), over 6% higher than the revised net market borrowing of about Rs3,812.8bn in FY18. Yields are likely to come under some pressure as the supply of government debt is likely to be higher than demand, even as extraneous risks to yields from rising inflation, declining liquidity, and calibrated tightening by global central banks persist. A key risk for the fiscal balance is the rise in crude oil prices.
U.S. stocks closed lower on Tuesday, pulling back from record highs set earlier in the session, as investors weighed the possibility of a government shutdown.
Dow
|
Dow Futures |
Hangseng
|
Nikkei
|
SGX Nifty
|
25792.9
|
25880.0
|
31758.9
|
23848.7
|
10713.5
|
-10.3
|
+61.0
|
-145.8
|
-103.1
|
-2.0
|
-0.04%
|
+0.24%
|
-0.46%
|
-0.43%
|
-0.02%
|
Asian stocks traded in negative territory early on Wednesday after Wall Street closed lower in the previous session.
Market is expected to open flattish note and likely to witness range bound during the day
Sun Pharma got a license to sell the generic version of Linzess in U.S. from Feb. 1, 2031 after settling patent litigation.
Texmaco Rail considering setting up logistics hub and food park in West Bengal.
Pioneer Distilleries’ workers at its Nanded, Maharashtra manufacturing plant go on strike.
GAIL, Gazprom sign pact for re-negotiated long-term LNG sale.
Symphony’s wall mounted air cooler patented in South Africa; launched 2 new product ranges.
TCS has signed an over GBP 500 million deal with M&G Bajaj Finance will acquire 12.60 % stake in mobile wallet company Mobikwik as against 10.83 % stated earlier due to a change in conversion price of the compulsory convertible cumulative preference shares.
Infosys launches Infosys business assurance store Retail Research Desk –Amber Enterprises Ltd – IPO note - Amber Enterprises Limited (AEL) is a market leader in the RAC OEM/ODM industry in India with a market share of 55.4% in terms of volume in FY17. Over the years the company has become a one-stop solutions provider for the major brands in the RAC industry and currently serves eight out of the 10 top RAC brands in India. From a single factory in Rajpura, Punjab, that commenced operations in 1994, it has today grown to 11 manufacturing facilities across seven locations in India.
AEL has shown consistent growth in sales as well as profitability. Sales have grown at 17% CAGR between FY13-17 as compared to industry’s growth of 10%. EBITDA growth has been in-line with revenue growth at 16.6% however as the company was in investing mode to create a base, the depreciation and interest have been higher, dragging the overall PAT growth to 9%.
With the IPO funds, the company intends to repay most of the debt, which would trickle down the growth benefits to bottom-line as well.
Moving away from the conventional comparison, we are putting Amber in the same bracket as auto ancillary companies. We believe Amber’s is working as an ancillary to RAC market. Also, in our comparison we have found similar parameters between them like mid-teens ROEs, high single digit margins etc. At upper band, it is commanding 10% premium to auto ancillaries’ valuation which we believe is justifiable considering it is a leader in its space.
We like the industry and the backward integrated business model of the company. We believe the investment phase of the company is now coming to end and hence the benefits would stat reflecting on the numbers along with the healthier balance sheet status. We recommend investors to subscribe the issue for long term gains.
Institutional Desk - Economist’s Views- Union Budget 2018-19- Indian Economy- Pre-election Budget To Have Populist Tilt, Slower Pace Of Consolidation: A populist tilt is expected in the Union Budget for 2018-19, with renewed focus on rural and agricultural spending. We expect the Central government’s fiscal deficit for FY18 to come in at 3.5% of gross domestic product or GDP, against the budgeted 3.2%. We believe the government remains committed to fiscal consolidation, but may do it at a slower pace. Therefore, in our view, the government is likely to target a fiscal deficit of 3.2% of GDP for FY19, higher than the 3.0% target laid down by the N.K. Singh Committee, but staying within the escape clause which allows for a deviation of about 0.5% of GDP. The government has been inclined towards capital spending, while keeping revenue spending under check. Nevertheless, while the government is likely to budget for capital expenditure rising at a faster pace than revenue spending, the compulsions of an election year will ensure that revenue spending will not be far behind. The government does not have much room to tinker with taxes, given the uncertainty around Goods and Services Tax or GST revenues, but we expect a marginal reduction in the corporate tax rate, in line with the announcement made in the Union Budget for 2015-16 to reduce the corporate tax rate from 30% to 25%, as territorial competition on the basis of tax rates is now increasing. In our view, net market borrowing is likely to be to the tune of Rs4,050bn (67% of gross fiscal deficit), over 6% higher than the revised net market borrowing of about Rs3,812.8bn in FY18. Yields are likely to come under some pressure as the supply of government debt is likely to be higher than demand, even as extraneous risks to yields from rising inflation, declining liquidity, and calibrated tightening by global central banks persist. A key risk for the fiscal balance is the rise in crude oil prices.
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