AGRICULTURAL IMPACT- Monsoon failure...!!

India experiences twin monsoon failure, first time in 10 years

By: Harish Damodaran | New Delhi | January 3, 2015 8:19 am

For the first time in a decade, India has experienced deficient rainfall in both the main south-west as well as the north-east monsoon seasons.
According to data from the India Meteorological Department (IMD), the country as a whole received an average rainfall of 85.2 mm during October 1 to December 31, 33 per cent below the “normal” long period average of 127.2 mm for this period.

That translated into a deficient north-east monsoon, which follows the main south-west monsoon season from June 1 to September 30. The latter had registered an overall rainfall deficit of 12.3 per cent, thereby amounting to a deficient monsoon. Any shortfall above 10 per cent at all-India level is termed as “deficient”.

This is the first time since 2004 that rainfall deficiency has been recorded in both south-west and north-east monsoon seasons.

In 2009, the south-west monsoon had totally failed with an almost 23 per cent nationwide deficit. It was, nevertheless, partly compensated by a surplus north-east monsoon. This time round, even that has not happened.

While the north-east monsoon is important for the southern states — particularly Tamil Nadu, which gets less rain from the south-west monsoon — in other parts, it helps to partially make up for any lack of precipitation in the main monsoon season.

India’s kharif harvest suffered a setback due to a deficient regular monsoon. It was hoped that this would be somewhat offset by a better rabi crop that is normally sown from November. But since even the north-east monsoon turned out to be poor, rabi crop plantings have also got affected, raising the possibility of India’s farm sector posting negative growth for 2014-15 — the first time in five years.

According to the Agriculture Ministry, farmers have so far sown 293.16 lakh hectares (lh) area under wheat this time, compared to 294.30 lh during the same period of 2013-14. There have been acreage drops even for gram or chana  (79.65 lh versus 95.03 lh), rapeseed-mustard (64.24 versus 68.04), jowar (30.59 versus 35.91), lentil or masur (14.79 versus 15.01), and maize (12.22 versus 12.63).

The heartening news, however, is that there has been good rainfall in the past couple of days, including in Madhya Pradesh, the Marathwada and Vidarbha regions of Maharashtra, and Gujarat, which were facing extended moisture stress.

“These have been real life-saving showers for the crop already planted. They are most timely, given that the wheat crop is now in the tillering stage, while in mustard, flowering initiation has begun,” said J S Sandhu, Agriculture Commissioner at the Department of Agriculture and Cooperation.

Sushil Kumar Yadav, a farmer from Rajoula village in Amarwara tehsil of Chhindwara in Madhya Pradesh, said the dry weather through November and December was a major source of worry. “But the Naya Saal  (New Year) has brought cheer. The rain in the last two days have ensured I don’t need to give any irrigation to my wheat for the next 20 days,” he said.

http://www.financialexpress.com/article/economy/india-experiences-twin-monsoon-failure-first-time-in-10-years/25588/

Solar investment- $100 bn, LIGHT AT THE END...!!!

PM Narendra Modi raises solar investment target to $100 bn by 2022

By: Reuters | New Delhi/bangalore | January 2, 2015 3:32 pm

Prime Minister Narendra Modi has ramped up his target for solar energy as he bets on renewables to help meet rising power demand and overcome the frequent outages that plague Asia’s third largest economy, a senior official told Reuters.

India gets twice as much sunshine as many European countries that use solar power. But the clean energy source contributes less than 1 percent to India’s energy mix, while its dependence on erratic coal supplies causes chronic power cuts that idle industry and hurt growth.

Modi now wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to boost India’s solar energy capacity by 33 times to 100,000 megawatts (MW), said Upendra Tripathy, the top official in the Ministry of New and Renewable Energy.

That would raise solar’s share of India’s total energy mix to more than 10 percent. In Germany, a leader in renewable energy, solar accounted for about 6 percent of total power generated in 2014.

India had earlier set an investment target of $100 billion for the next five years for all types of renewable energy, with wind taking up two-thirds of the total. In an interview, Tripathy said Modi’s new solar target was ambitious, “but if you do not have a higher goal, you will not achieve anything”.

Canadian Solar and China’s JA solar told Reuters they are looking at making cells or modules – used in solar panels – in India. JinkoSolar Holdings said recent announcements have also raised their interest.

U.S.-based First Solar and SunEdison Inc  have sizeable businesses in India, and together with local firms will invest $6 billion in India for the fiscal year to March 31. Tripathy expects new and existing companies to invest about $14 billion annually starting next fiscal year through to 2022.

Among First Solar’s top projects are two plants with Kiran Energy Solar Power and Mahindra Solar One totalling 50 MW in Rajasthan.

SunEdison is working on a 39 MW project in India and hopes to participate in the solar expansion plan, said regional managing director Pashupathy Gopalan.

Solar energy in India costs up to 50 percent more than power from sources like coal. But the government expects the rising efficiency and falling cost of solar panels, cheaper capital and increasing thermal tariffs to close the gap within three years.

Modi promised on high-profile visits to Japan and the United States last year to help solar companies overcome barriers to entering the Indian market.

“Their basic problems are who is the buyer, where is the land and can India have a regime where they can raise low-cost capital?” Tripathy said.

“These three issues have to be addressed and we are addressing them.”

To create sufficient demand, power distributors will have to  raise renewable energy purchases to 8 percent from 3 percent by 2020. There is also a plan to require new thermal plants to have a 10 percent renewable mix, which they can generate or buy from solar companies as credit.

India recently signed a $1 billion agreement with the Export-Import Bank of the United States for companies willing to ship equipment from that country. India is also thinking of solar bonds and helping foreign firms raise rupee bonds to cut costs.

Foreign companies say they are enthused by Modi’s personal interest, but red tape is still an issue.

“The policy framework needs to be improved vastly. Documentation is cumbersome. Land acquisition is time-consuming. Securing debt funding in India and financial closures is a tough task,” said Canadian Solar’s Vinay Shetty, country manager for the Indian sub-continent.

http://www.financialexpress.com/article/economy/pm-narendra-modi-raises-solar-investment-target-to-100-bn-by-2022/25389/

Indian hedge funds...

Investors unlikely to make a beeline for Indian hedge funds despite 

sterling 2014

ARVIND JAYARAM

BL RESEARCH BUREAU:  

India-focused hedge funds delivered a solid 38.95 per cent return in January-November, 2014, trumping the BSE benchmark Sensex and NSE Nifty indices in what has been a very good year for equities. But investors aren’t expected to make a beeline for these funds in 2015 despite the outperformance on account of the high volatility of returns of Indian funds, according to Hassan Mohamad, an analyst with alternative investments data provider and research house Eurekahedge.

“India dedicated managers will need to repeat their performance of 2014 much more consistently going forward to attract any serious attention from investors,” says Mohamad.

Volatile performance

According to Eurekahedge, Indian hedge fund performance leaves much to be desired, given that they were down 50.66 per cent in 2008, up 49.42 per cent in 2009, down 22.9 per cent in 2011, up 12.84 per cent in 2012, down 8.52 per cent in 2013 and up 34.34 per cent in 2014. The allure of Indian hedge funds is also limited when viewed from the perspective of performance relative to underlying markets over the last seven years.

“For investors, the added fees of a hedge fund set-up cannot adequately justify this performance,” says Mohamad. Hedge fund investors, while desirous of high returns, also seek such funds as a hedge against market vagaries and in this sense, the India-focused funds have failed to keep up to expectations.

“The much valued downside protection that hedge funds traditionally offer to investors has also been absent in the case of Indian hedge funds. Thus, investors could be better off putting their money in a simple long-only investment fund that charges lower fees and usually more upside,” says Mohamad.

India-focused hedge funds utilise three main strategies, according to Eurekahedge. These are a long-short strategy on equities, a commodity trading advisor (CTA)/managed futures approach laying emphasis on futures contracts in their overall investment strategy and a multi-pronged approach that utilises both these strategies as well as a fixed income hedge. The clear winner in 2014 were the long-short equity funds, which delivered an astounding 53.9 per cent return in the first 11 months of the year, in comparison to 27.2 per cent return from managed futures funds and 26.1 per cent from multi-strategy funds.

Dwindling corpus

Consequent to the poor performance in past years, the size of the Indian hedge fund industry has fallen well below its peak of $5.2 billion in 2008 to approximately $2.91 billion now. That’s just a fraction of the total global industry, which has $2.13 trillion of assets under management. A total of 65 funds are operational in the country and the average size of a fund is $44 million, with their median size pegged at $19.5 million, according to Mohamad. “The Indian hedge fund industry… is composed of mainly small-tier funds and for the last couple of years has been recovering primarily on the basis of performance-driven gains. Investors still have some key concerns when allocating to an India dedicated hedge fund,” says Mohamad.

Nevertheless, the fact remains that Indian hedge funds’ sterling performance in 2014 is likely to have attracted the eyeballs of many investors. A perusal of the returns of the global hedge fund industry reveals that their average return during the January-November, 2014, period in dollar terms was 4.37 per cent.

It is more likely that hedge fund investors will take exposure to the Indian market through an alternate route, he adds. “Investors generally want to avoid concentrated country specific exposure, hence the recent inflows have been directed towards Pan-Asia funds which can carry some exposure to Indian markets,” says Mohamad.

(This article was published on January 1, 2015)

http://www.thehindubusinessline.com/markets/stock-

markets/investors-unlikely-to-make-a-beeline-for-indian-hedge-funds-

despite-sterling-2014/article6745029.ece?homepage=true

Hits and Misses..2014...NATURALLY...!!!

Our hits and misses of 2014

LOKESHWARRI SK

Stocks we rated ‘buy’ averaged 54 per cent, but some of our ‘hold’ calls were too conservative

It is that time of the year again when we look back at our performance score-card. There was a marked shift in investor sentiment from pessimism to optimism in 2014. As the year unfolded, it became apparent that the economy was on the mend and the positive impact from this could help company fortunes too. The stock market too seemed to have embarked on a multi-year up-move.

But our task of recommending stocks was complicated by two factors. One, as investors took heavy bets on the Modi Government ushering in fast-paced changes, there was a sharp run-up in the prices of many stocks. With little improvement in earnings, valuations became stretched. In many companies it, therefore, was a Hobson’s choice between taking the leap of faith before the numbers began improving or to lose out on a large part of the rally.

Two, the maximum gain in the rally was made in mid- and small-cap stocks. Sifting through the chaff in this space, avoiding companies with governance issues and zeroing in on those that had the potential to grow over the next two to five years was the other challenge.

Since our stock recommendations are given with a two-year horizon, we have considered the calls made between October 2012 and September 2014 for this performance review. Of the total stock recommendations, 58 per cent of the calls (buy, sell and hold) have worked, or have outperformed benchmark returns.

While that is not something to rave about, the average return of the stocks we recommended is 54 per cent, well above the benchmark return of 36 per cent. This is, of course, partly a function of the bull market currently in place.

The buys, the sells and the holds

Our analysts have taken a positive view on the prospects of India Inc and this is reflected in the fact that ‘buy’ recommendations accounted for over 70 per cent of our stock calls given. Around 58 per cent of these recommendations came good. So, where did we fall short? Our bet on PSU companies with monopoly in their segments, such as NMDC, did not deliver. Stocks in the oil and gas sector too have underperformed, thanks to regulatory issues and the adverse commodity cycle. Real estate and aviation stocks did not do too well due to the problems besieging those sectors.

Our portfolio of ‘buy’ recommendations has delivered 54 per cent returns, thanks to our multi-baggers. One-fifth of the stocks where we recommended a ‘buy’ have gained more than 100 per cent. Of these, seven have gained more than 200 per cent. JK Lakshmi Cement is our best pick, with 440 per cent gain. Infrastructure companies such as IRB Infra and Kalpataru Power Transmissions, Amara Raja Batteries and Persistent Systems are among our other top picks.

Since the market was in such a gung-ho mood, only 20 per cent of our calls were ‘sell’ recommendations. Of these calls, 56 per cent worked or managed to under-perform the benchmark. We were able to give some timely exit calls in stocks such as Bhushan Steel and DLF. But some stocks which were recommended for exit have rallied sharply. This resulted in an average return of 31 per cent in these calls against 33 per cent gains of the benchmark. Stocks of FMCG companies that continued to rally despite slowing growth and stiff valuation and some sell calls in auto and auto ancillaries, before the cycle turned for this sector, contributed to this droll situation.

Less that 10 per cent of our calls were ‘hold’ but the fact that this portfolio has gained 50 per cent shows that our cautious stance has made readers forego gains, this is something we need to address next year. That five of the ‘hold’ calls gained more than 100 per cent only accentuates this point.

IPOs, MFs and bonds

There wasn’t too much activity in the primary market in 2014. Our invest call in the IPOs of Wonderla and Snowman Logistics that debuted in the first nine months, has worked. We had also asked readers to book profit in Wonderla in September since the stock price had moved far beyond the stock’s intrinsic worth. Our hit-rate for IPO recommendations given over the last two years is 80 per cent. The advice to invest in tax-free bonds of IRFC, REC, NHB and so on would also have delivered gains as these bonds have rallied in expectation of prospective interest rate cut.

With mutual fund managers finding it easy to beat their benchmarks, our fund calls made between January and October this year enjoyed a hit rate of 94 per cent. The recommendations to ‘buy’ fared better with 97 per cent of our calls beating benchmark returns. Of the calls for selling mutual funds, 60 per cent were right. Returns on the debt funds, suggested for investment, ranged from 13 to 18 per cent, on an annualised basis.

What are the areas we need to work on in 2015? We need to broad-base the universe of stocks that we track. We will try to cover more under-researched stocks that hold value. With most stocks with visibility in earnings growth having already moved higher, this has become an imperative. We will also try and improve our hit-ratio for stock recommendations. We will also continue to cover new offerings in insurance, bonds and fixed deposits, to provide you investment options besides stocks and mutual funds.

(This article was published on December 28, 2014)

http://www.thehindubusinessline.com/features/investment-

world/our-hits-and-misses-of-2014/article6732858.ece

TOP-STOCK-PICKS FOR THE YEAR-2015

A year of stock pickers

Vishal Chhabria, Ram Prasad Sahu, Sheetal Agarwal & Ujjval Jauhari  

January 1, 2015 Last Updated at 00:43 IST

Half of the sharp rise in stocks in 2014 was driven by re-ratings - rise in price-to-earning ratios on hopes the new government would turn around the economy which will reflect in corporate earnings. While valuation of the broader market is close to long-term averages, mid-caps are in an exuberant territory. For the broader market to re-rate further, earning growth has to pick up. That is yet to happen. Against this backdrop, investors are likely to seek more action from the government in the New Year. Until then, the market could consolidate.

While the government has started taking its first reform measures - higher foreign direct investment in defence, railways and insurance, diesel price regulation and an ordinance to ease land acquistion by industry - the market has to contend with some external risks as well.

The world economic growth, barring in the US, remains fragile. While slower global growth has brought down prices of commodities and is beneficial for India, it will also hurt our exports, besides pulling down the overall Sensex earnings and limiting FII (foreign institutional investors) flows from oil-rich nations. Corporates, though, are slowly deleveraging, but the pain area - power and infrastructure - has hardly seen a significant improvement.

The good part is that India's fiscal and current account deficits have improved, and inflation is down. But with US seen raising interest rate in mid-2015, an act that could bring volatility to emerging markets like India, the Reserve Bank might not cut its policy rate in a hurry. Interest costs for companies, therefore, might not come down meaningfully anytime soon.

Given these, and even as the markets are expected to rise 9-20 per cent from their current levels - Sensex could rise from 27,500 to the 30,000-33,000 level - investors will have to be selective in picking stocks for higher returns.

Experts advise against high-beta, highly indebted firms and vulnerable mid- and small-caps. A rise in global risk could see FIIs slow down purchases. But some experts believe an improving domestic environment could bring high inflows from local investors, providing some cushion.

Here are the top 10 stocks according to India's leading research houses, such as Morgan Stanley, Macquarie, Ambit, Credit Suisse, IIFL, Angel Broking and Religare. These stocks have been selected on the basis of being recommended by more than one research house, potential returns and earnings growth. (Click here for graphics)

http://www.business-standard.com/article/companies/a-year-of-stock-pickers-115010100033_1.html

http://www.business-standard.com/content/general_pdf/010115_02.pdf

Reforms to Expect from Modi.....!!!

Six areas of reforms to expect from Modi's banking retreat

ICICI Bank Chairman K V Kamath will talk about financial architecture of medium and small scale enterprises at the retreat

Manojit Saha  |  Mumbai  

January 1, 2015 Last Updated at 17:32 IST

It’s going to be the biggest Gyan Sangam (knowledge confluence) for public sector bank chiefs who will be able to interact with some of the celebrated names in the country’sfinancial sector and present a blueprint for the next generation of banking reforms to Prime Minister Narendra Modi.

The finance ministry, which has organised the two-day retreat in Pune, has taken care to ensure that the participants comprising all heads and executive directors of public sector banks apart from the finance minister and the Reserve Bankof India governor and deputy governors are physically and mentally charged up for the big event.

That explains a ministry statement that the second day will begin with yoga and a talk by Swami Sukhbodhanand on leadership and change management. Not that the bankers need any external stimulus to put their best face forward at the event. Most Mumbai-based bankers have decided to start the “knowledge confluence” much before the event and have decided to hire a bus to go to Pune together.

On the first day, “sector experts” including RBI Director Nachiket Mor, former UTI Bank CMD P J Nayak, HDFC Bank Deputy CEO Paresh Sukhtankar and Bandhan CMD C S Ghosh will meet the bankers and make separate presentations on six areas: financial inclusion, technology, priority sector lending, risk management, people strategy and governance.

On the second day, these six groups will present their recommendations, following which ICICI Bank Chairman K V Kamath will talk about financial architecture of medium and small scale enterprises. The groups will then present the final blueprint to the prime minister at the concluding session.

Sources familiar with the event proceedings said a reforms blueprint is expected to be drawn up in the following six areas.
Banking structure & consolidation.

The previous government had mooted the idea of a holding company structure for public sector banks but not much progress was made. The idea was to enable public sector banks to raise capital more efficiently as the government, which is the majority owner of the banks, is constrained in infusing fresh capital every year due to its fiscal consolidation commitment. Public sector banks will need Rs 2.4 lakh crore of capital till 2018, if the government want to continue with the same shareholding.

Consolidation among public sector banks was pushed by P Chidambaram when he was the finance minister in the previous government. The previous government supported the move, but said it would not force banks to merge and such a proposal should come from respective bank boards.

Asset quality & recovery

The biggest worry of the banking sector at present is asset quality which declined sharply in recent years. According to RBI data, the gross non-performing asset in the banking system rose to 4.5% of gross advances in September 2014 as compared to 4.1% in March.

Total stressed asset in banks (gross NPA + restructured advances) rose to 10.7% from 10% during the six month period. One way to reduce bad loans is to have an effective recovery mechanism as the present legal system seems to be inadequate.

According to latest data, banks have referred 1.86 million cases in FY14 to Lok Adalats, Debt Recovery tribunals and under SARFESAI Act, (78% increase over the previous year), amounting to Rs 1.74 lakh crore and recovered only Rs 31,100 crore which is just 18%. The government is planning to make laws more stringent by amending the SARFAESI Act and DRT laws to effectively deal with the issue of bad loans, especially those being created by suspected wilful defaults.

Financial inclusion

Banks have already opened close to 100 million accounts under the Pradhan Mantri Jan Dhan Yogana. However, 75% of the accounts still don’t have any money. The retreat will discuss how to take the initiative forward and how to plug the loopholes that still exists.

Human resources

The central bank has termed the decade as a “human resources decade” with a huge number of middle level staff going to retire. With banks opening a huge number of accounts under the Jan Dhan scheme, they will need more branches and personnel to man them.

Priority sector lending

At present, there is a uniform rule for all types of banks regarding priority sector lending norms and the target. There is a suggestion that priorities should depend on an individual bank’s strength and should not be uniform. For example, a public sector bank with a predominantly rural presence can have direct agriculture as the main priority but a foreign bank which has limited branch presence could see more opportunity in small and medium enterprise financing. Some clarity on the issue is expected to emerge at the retreat.

Technology

While most banks are on core banking platform, some of the regional rural banks are yet to adopt CBS. In addition, it is virtually impossible to reach the vast unbanked population in the country through a brick and mortar structure and technology will play a key role in expediting financial inclusion.

A multi-channel approach using handheld devices, mobiles, cards, micro-ATMs, branches, kiosks etc, should be used by banks while ensuring that the transactions put through such front-end devices should be seamlessly integrated with the banks’ CBS. In addition, alternative channels, like using social media can help banks to understand customers better and can be used to inform marketing campaigns. A detailed roadmap on this is expected at the Pune meeting.

http://www.business-standard.com/article/finance/six-areas-of-reforms-to-expect-from-modi-s-banking-retreat-115010100535_1.html

AIRLINES BONANZA...!!

Airlines expected to post Rs 81 bn operating profit in 2016: Crisil

By: PTI | Mumbai | December 30, 2014 11:21 pm

Domestic carriers are expected to post an operating profit of Rs 81 billion in fiscal 2016, a complete “U-turn” from the Rs 15 billion loss posted in fiscal 2014, rating agency Crisil Research said in a report.

Net profit remained a distant destination for Air India, Jet and Spice Jet and can be reached only after massive recapitalisation of Rs 350 billion, the report said.

The last few months have seen tailwinds converging for India’s airlines such as improvement in demand and therefore passenger load factors (PLFs), a largely stable rupee-dollar exchange rate, and most importantly, a steep fall in crude oil prices.

“At an aggregate level, domestic carriers are expected to post an operating profit of Rs 81 billion in fiscal 2016, a complete U-turn from Rs 15 billion loss posted in fiscal 2014. That translates into a spectacular 14 percentage point improvement in operating profit margin to around 11 per cent in fiscal 2016,” Crisil said.

“We believe Indian airline companies will have one of the best business environments to operate in for a long time. Falling crude oil prices are a big positive.

“We expect about 25 per cent lower air turbine fuel prices for fiscal 2016 compared with fiscal 2014. More importantly, the fall is accompanied by an improving demand scenario, unlike fiscal 2010 when the players were unable to benefit significantly due to weak demand,” Crisil Research Senior Director, Industry and Customised Research, Prasad Koparkar said.

Given their current financial position and improvement in PLF, airlines are likely to retain a large proportion of the benefit of lower crude prices. We could also see a 2-4 per cent increase in average realisations of airlines due to lower discounts being offered, he added.

“There’s more tailwinds. Despite the entry of new players in the domestic market, competition is expected to be moderate,” the report said.

Crisil further said that existing airlines will go slow with domestic capacity additions due to current financial stress.

“In fact, Spice Jet has reduced its fleet size from 58 to 37 aircraft in the current year – while capacity addition by new entrants such as AirAsia and Vistara is expected to be gradual. We believe PLFs will improve 300-400 basis points over the next couple of years, the report said.

But the flight path to net profit for the industry will be another story, especially for three carriers – Jet Airways, Air India and Spice Jet – which account for about 75 per cent of the commercial aircraft fleet in India but over 93 per cent of the sector’s debt of Rs 705 billion as of March 2014.

“We believe that reducing losses will be a function of sorting out their capital structures. Today about 15 per cent of their revenues are used to pay interest on debt. Till there is recapitalisation, the sector is unlikely to fly to a net profit at an aggregate level any time soon, though airlines with lower debt burden will turn profitable.

“To do so, interest expenses will have to halve. This, in turn, will mean a recapitalisation of around Rs 350 billion -primarily for the three carriers,” Crisil Research Director – Industry Research Rahul Prithiani said.

http://www.financialexpress.com/article/economy/airlines-expected-to-post-rs-81-bn-operating-profit-in-2016-crisil/24628/

ICICI, IDFC, MARUTI, TCS ..TOP PICKS...!!!

ICICI Bank: TP – Rs.390

ICICI Bank has continued to demonstrate its prowess in improving ALM, maintaining robust liability franchise, managing asset quality risk along with conserving capital. We believe management’s focus on stable growth with improving structural profitability is likely to continue. We value standalone business at Rs.314 (2.0x FY16E ABV) and subsidiaries at Rs.76.

IDFC: TP – Rs.172

IDFC is present in the niche infrastructure financing space and is well positioned to benefit from India’s large infrastructure opportunity. We believe, falling wholesale funding rates along with improvement in the outlook on capital market related business are future catalyst for the stock. We like its balance sheet quality where loan loss provision ratio stands robust at 3.6% (Q2FY15), providing enough cushion to its future earnings.

Maruti Suzuki: TP – 3644

We expect domestic passenger vehicle industry to do well in the next two to three years. Revival in small car demand and new launches will be the key volume growth drivers for the company. Margins, going ahead, will receive support from reduction in discounts and economies of scale. Apart from this, forex movement has also been favorable for the company and that should be positive for the margins

TCS: TP – 2786

Spends in Digital are also growing in line with expectations. In the past several quarters, TCS has reported industry – leading growth rates with sustained margins.

The global economic scenario has improved, especially in USA. While Europe is seeing deceleration in growth, the scenario may not deteriorate significantly, we believe.

L&T: TP – 1762

Pace of order intake has been good and should enable the company to meet its order intake guidance for the fiscal. L&T continues to be one of the best plays on infrastructure development in the country. In addition to this, the company would be a major player in upcoming opportunities in Defence, High Speed Rail and Shipbuilding.

Kansai Nerolac: TP – 2400

Improvement in automotive demand should benefit KNPL significantly. We also estimate KNPL to improve market share in the high margin decorative segment (currently at 15% in the country) which should aid the margins of the company. Weak crude prices and weakening prices of crude derivatives including key raw material Titanium Dioxide, which is down by 15% YoY, should improve the margins and return ratios of the company going forward.

Carborandum Universal: TP – 240

Carborundum Universal enjoys leadership position in the domestic abrasives market along with strong positioning in global electro-minerals and industrial ceramics market. It is well poised to benefit from the improved industrial outlook. Company would likely witness sharp recovery in operating margins on back of restructuring in the international business, going ahead.

Kajaria Ceramics: TP – 648

Kajaria ceramics is ideally positioned to capture the increased demand coming from housing development, development of smart cities and industrial corridors and the focus of government on Swatch Bharat Abhiyaan, with its capacity expansion plans. Along with this, company is also likely to benefit from GST implementation.

EIL : TP – 300

EIL enjoys leadership positioning in Indian hydrocarbon consultancy business. It would benefit from recovery in capex cycle by various upstream/downstream companies over the next few years. EIL has also been diversifying business into other geographies which would add to revenue stream going ahead.

Geometric: TP – 146

The management has undertaken several restructuring initiatives to improve growth, bring in predictability as well as sustain margins. These initiatives are expected to lead to improved revenue growth over the next few quarters. The order booking over past four quarters and the strong pipe-line make us optimistic on future growth prospects.

By Kotak Securities

http://www.financialexpress.com/article/markets/indian-markets/top-performing-stocks-for-2015-icici-bank-idfc-maruti-suzuki-more/24235/

POWER SECTOR - 3 LAKH Cr..!!!

Govt eyes Rs 3 lakh crore investment, reforms to light up power sector

Piyush Goyal has already laid out an ambitious target of the new govt to provide 24X7 power supply to all households in the country by March 2019

Press Trust of India  |  New Delhi  

December 28, 2014 Last Updated at 11:50 IST

With an ambitious target to give 24X7 electricity to all, the government is eyeing Rs 3 lakh crore worth investments in power transmission and distribution business, as it gears up to free the sector from a gridlock of fuel scarcity, regulatory clogs and other issues.

Leading from the front, Power Minister Piyush Goyal is confident that the results would start showing in the new year and a right foundation has been laid to 'power up' thepower sector since a new government took over in May this year.

The ray of hope for 2015 follows a year mostly marked with the drying up of investments, fuel supply bottlenecks and the gnawing transmission problems.

"We are planning investments of Rs 3 lakh crore in the T&D sector and have already started the Deen Dayal Grameen Jyoti Yojana and Integrated Power Development Scheme, with all this I think we will be able to reach the length and breadth of the country and enhance the T&D network and make sure everybody gets adequate power," Goyal told PTI.

The investment banker-turned-politician has already laid out an ambitious target of the new government to provide 24X7 power supply to all households in the country by March 2019 -- a deadline that is little over four years away now.

"We believe our steps to increase coal production are on the right track, our targets are quite doable, whether it is renewable energy, coal production or 24x7 power, we are very confident of our targets," Goyal said.

The mass cancellation of coal mines was a big 'shock' for power sector in 2014, but the sector is hopeful that this thorny issue of fuel supply has been put to rest with the launch of a transparent auction process for coal mines.

"2014 was a turbulent year for the power sector players with Supreme Court cancelling captive coal blocks, inadequate fuel supply to power plants, no long term power procurement bids on offer, plummeting short term power rates and inadequate tariff hikes because of elections," Debasish Mishra, Senior Director, Consulting, Deloitte India said.

However, Goyal differed with this observation and said that the electricity generation has grown in double-digits and coal production has also shown an upswing since he assumed office about six months ago.
http://www.business-standard.com/article/pti-stories/govt-eyes-rs-3-trn-investment-reforms-to-light-up-power-sector-114122800155_1.html