Kotak Institutional Equities

Articles By Kotak Institutional Equities

359 Articles

Gap between outstanding lending rates and fresh loans rises in August

The gap between outstanding and fresh lending rates was up 10 bps m-o-m in August 2019 to 75 bps. The gap has been broadly in the range of 50-70 bps since July 2018.

home loan, balance transfer, lending rate, outstanding lending rate, fresh loan, Banking news, Finance news, mclr rates, RBI, eserve Bank of India News

Stock corner: Maintain ‘sell’ on Yes Bank, fair value unchanged at Rs 55

Yes Bank surprised positively on Thursday with an announcement that it has received a binding bid from an investor committing US$1.2 bn.

yes bank, banking sector News

Stock corner: ‘Reduce’ Hindustan Zinc, results were in line with expectations

FY20-22e EPS cut by 7-4% due to lower volumes and higher costs; TP revised to Rs 205; ‘Reduce’ retained due to dear valuations.

zinc, hindustan zinc News

Third-party motor insurance drives up growth in premiums of general insurers

Most large players were strong on ex-crop basis—ICICI Lombard was up 17% (overall premium down 23%), Bajaj up 24% (overall premium up 1.4X) and SBI GI up 51% y-o-y (overall premium up 88%).

Third party, motor insurance, drive up, growth, premium, general insurer, money, General insurance, traffic fine, health insurance, fire insurance, ICICI Lombard, SBI, Bajaj, HDFC, health premium News

Life insurance: Private sector individual APE growth slows down in Sept

Private sector players reported 3% y-o-y growth in overall APE in September 2019, with 3% growth in individual APE.

Insurance Regulatory and Development Authority of India, Irdai, annualised premium equivalent, APE, Kotak Institutional Equities, life insurance industry, volatile equity markets, unit linked insurance plans, News

Aurobindo Pharma: Stock has factored in import alert

Assuming worst-case scenario, ARBP announced that the USFDA issued a form-483 for its Unit-VII, its largest orals facility for the US, though, increasingly less relevant for future pipeline/filings, particularly, post Sandoz

Markets News

BPCL ratings: Reiterate ‘Sell’ amid adverse risk-reward balance

The recent outperformance of BPCL against other OMCs is pricing in upside from a potential open offer in lieu of control premium that maybe paid by a strategic buyer in a scenario of privatisation.

BPCL privatisation, Dharmendra pradhan, BPCL, privatisation News

Kotak Institutional Equities: Maintain ‘buy’ on CIL with fair value of Rs 285/share

Coal India reported a decline of 20% yoy with dispatch volumes of 35.2 mn tons in September 2019—the fifth consecutive month of weak dispatches.

NTPC, Coal requirement, FGD contract, Maharashtra, Nimarkhedi station, Chhattisgarh, Madhya Pradesh, Khandwa station News

Tech Mahindra rating: Add — Enterprise segment prospects getting better

Tech Mahindra indicated that the broader slowdown in the auto industry reflected in weak growth numbers for the manufacturing vertical.

Tech Mahindra, Tech Mahindra rating, Enterprise segment, enterprise growth, enterprise growth prospects, revenue growth, segment revenue growth News

Lending rates likely to soften after repo rate, MCLR cuts

Average term deposit rates are broadly similar to term deposit rates (1-2 years) offered by most banks today; slightly lower than rates offered by SFBs.

Kotak Institutional Equities, Lending rates, MCLR, MCLR cuts, deposit rates, market news

United Breweries Rating: Reduce; A robust show by the company in FY19

Return ratios rose though capex hurt FCF generation; a good long-term story but valuations are very rich; ‘Reduce’ maintained

kingfisher beer, kingfisher beer rating, kingfisher beer annual report, kingfisher beer earnings metrics, market news, kingfisher beer revenue, kingfisher beer net profit News

Kotak Institutional Equities: Initiating coverage on polycab with ‘buy’ rating

We initiate coverage with a ‘buy’ rating and a fair value of Rs 700 based on 15.5X June 2021E P/E.

Kotak Institutional Equities, Polycab, wires industry, FMEG segment, CAGR News

Consumer staples: Q1 sees slowing growth across firms

Aggregate revenue growth for our coverage universe stood at 8% for Q1, a step down from the 9.8% print in Q4FY19 and 12-15% prints from Q1-Q3FY19.

Consumer staples, Q1, growth, Consumer staples growth, markets news,  revenue growth, Rural, urban News

Retirement planning: Number of employees under defined benefit drops

Retirement costs for public sector banks is gradually dissipating as the ratio of employees who are in defined contribution is 60% today as compared to 10% in FY11

Retirement planning, Retirement planning tips, retirement costs, pension, retirement liabilities, benefit scheme, active employees News

Wipro rating: Reduce; A muted start to the new fiscal

Q1 signals another year of weak growth; FY20-22e EPS cut by 4-7%; TP revised to Rs 260.

Markets News

YES Bank Rating | Sell — Company’s getting into a negative spiral

Several risks exist outside CAR and downward revision to FV cannot be ruled out. Sell remains. FV revised to Rs 70 (from Rs 170 earlier).

Markets News

DCB Bank Rating | Add — Soft showing in the first quarter

Slowdown in growth and sharp valuation expansion behind downgrade to ‘Add’; TP up to Rs 250 from Rs 230.

Markets News

Your money: Term deposit rates remain broadly flat

The gap between weighted average lending rates and fresh lending rates has declined from peak values of 85-95 bps in 3QFY19 to 55 bps.

corporate loans, bank lending, msme, micro, small and medium enterprises, News

Analyst corner: Translation of repo cuts to loans still not visible

Some banks have decreased MCLR rates by 5-15 bps in March-May 2019. With deposit rates stable, a swift rise in MCLR rates is less likely

Markets News

Stock corner: ‘Buy’ Ashok Leyland, revenue growth was strong in FY19

Expenditure on R&D increased by 45% y-o-y in FY2019 and R&D as a percentage of sales increased to 2.3% in FY2019 from 1.7% in FY2018.

Stock corner, Ashok Leyland, revenue growth, FY19, Markets news, annual report, Ashok Leyland news, Ashok Leyland share News

Life insurance: High individual premium drives growth for private insurers

The company has increased focus on ULIPs in the past two years. Its ticket size in individual non-single segment was up moderately by 13% y-o-y/m-o-m.

Life insurance, individual premium, private insurer, LIC, APE, insurance news, money, ICICI Prudential Life, ICICI, HDFC Life, APE growth,  News

Stock corner: Maintain ‘buy’ on ICICI Bank, FV revised to Rs 510

As highlighted in our previous notes, the decline in NPL ratios is underway with more scope for further reduction with lower impact on earnings given the bank’s healthy coverage ratio.

The key takeaways are that we are seeing improvement, especially in the corporate book. News

Analyst corner: Fuel subsidy unchanged amid steady crude oil price

The government has increased excise duties on auto fuels by `2/litre, which have been passed on to end-consumers by the OMCs.

disinvestment in india, disinvestment psu, stocks in psu, OMCs, psu in india, GAIL, IOCL, Oil India, ONGC, Oil, share market, Crude, Crude oil, Crude oil prices, Saudi Arabia News

Banks likely to show stable operating performance, earnings recovery in Q1

Positive outlook on ICICI Bank, SBI. Yes Bank to have the most challenging quarter while there will be focus on asset quality for IndusInd Bank and RBL Bank

Banking & Finance News

Analyst corner: Lower Mutual fund exposure to affect financial flexibity of NBFCs

In light of liquidity challenges and concern in wholesale NBFCs, we remain cautious on the sector even as stable asset quality in most retail segments, detailed in RBI’s FSR, reinforces comfort on retail players.

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Moderate growth of non-life insurers

Motor own damage weak Motor insurance premium for the month was up 8% y-o-y, vs 1% in April 2019. This was driven by 11% growth in motor third-party (TP) premium.

non-life insurers, insurance, general insurance, Health, Motor insurance premium, industry news

Hexaware Rating | Reduce — Mobiquity buy a step in the right direction

Deal will be EPS neutral in CY19; revenue estimates for CY20/21 raised by 9%; ‘Reduce’ retained given that valuations are full.

Markets News
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