Page 9 - The Compass

Loan against property need not be a sin word for NBFCs

Standards of underwriting for loan against property have improved for listed NBFCs

SBI's OTS scheme may have a ripple effect on NBFCs

A few days back when State Bank of India (SBI) announced a one-time settlement (OTS) scheme for tractor and farm equipment loans, it signalled that instalment collections may take some time to recover. While investors in non-banking finance companies (NBFCs) haven't encountered a similar situation over the last few years, there are concerns whether SBI was setting the stage for more of such leeway. Election promises and demands in states such as Uttar Pradesh and Maharashtra which favoured farm loan waiver also increases concerns. A senior executive of a private sector bank states that while a farm loan waiver looks unlikely as state governments don't have the money yet to compensate banks for the loans waived, schemes like SBI's OTS on farm and tractor equipment loans may tempt customers to negotiate with their NBFCs on similar lines. "If it was easy to interpret Reserve Bank of India's 60-day dispensation as loan waiver, OTS scheme may play more on customer sentiment," he states. ...

Should investors worry on HDFC Life, Max Life's slower growth?

While managements of both are confident of growth picking up, some analysts wait for signals

For Biocon, windfall seen from drug launch

The Biocon scrip is up about 5 per cent this week after the company announced that its global development and marketing partner, Mylan has announced a settlement with Roche and Genentech who hold the patent for cancer drug, trastuzumab. Since the development is significant and boost Biocon's fortunes, analysts see more gains for the scrip.The drug is estimated to have generated sales of just under $7 billion (about Rs 46,000 crore) largely from developed markets of US and the European Union in 2016. Analysts at Morgan Stanley believe that Mylan and Biocon would be able to generate sales of $200 million in two years of launch assuming a 60 per cent price erosion, and a 15 per cent market share. This should help Biocon generate about $40 million (about Rs 260 crore) in profits assuming a 35 per cent profit share. The upside from the emerging market countries is expected to be over and above this profit estimate.The product is expected to be launched in the second half of 2018 in Europe .

Weak Emami stock looks ripe

Kesh King and recovery in global sales to fuel growth

Hero MotoCorp rides rural recovery

Sales improving gradually since November 2016

Analysts in wait-and-watch mode on Bajaj Finance

While Street continues to like the business, analysts await clearer signals on consumer buying

New rules kicking in from April put Dish TV at an advantage

New rates seen boosting direct-to-home players; Dish TV's union with Videocon D2H is positive

Tempered hopes for Dr Reddy's

Key trigger outcome of US audit at Srikakulam facility

Westlife on cusp of turnaround

Continued sales momentum, focus on brand extensions

Crompton: ZIV sale alone may not lift investor confidence

Sale proceeds of Rs 845 cr to help partly retire Rs 1,233 cr of international debt

Repeal of Obamacare a worry for Wipro, Cognizant

Already struggling to push up growth, Wipro to face additional headwinds

Dredging Corp: Rebound in earnings holds key

The Dredging Corporation of India's stock surged 12.7 per cent to close at Rs 502 following reports that the government may sell 51 per cent of its 73.5 per cent stake in the company. While the company, said to the exchanges, that it has no specific official communication, the street's optimism stems from the possibility of a new owner boosting the company's fortunes. The public sector company dredges for Indian seaports and Indian Navy besides undertaking contracts for overseas projects. Dredging involves excavating the sea or river bed to increase their depth for easier ship movements. In the December quarter, the company has secured Rs 1,119-crore contract for dredging of a shipping channel at Kolkata Port in a global bidding. In January this year, it has also won Rs 102 crore order for the Pussur Channel dredging project in Bangladesh. These only indicate the company's competitiveness in the business. While the order flows are positive, the government's focus on coastal ...

Wonderla's high valuations look sustainable

The stock of India's largest amusement park chain- Wonderla Holidays (Wonderla) is trading at premium valuations not just to its domestic peer (Adlabs Entertainment), but also to most global peers such as Disney, Six Flags, Cedar Fair, Sea World Entertainment, amongst others. At current levels, Wonderla is trading at 28 times FY18 estimated earnings whereas its global peers are trading anywhere between 15 to 26 times CY18 estimated earnings. Although any comparison with global peers is a far cry, the question is can the stock sustain these valuations?A business model, which allows the company to set up quality parks with relatively lower costs, and consequently report healthy profitability and return ratios are few reasons behind the premium valuations. In fact, the company has been able to achieve a payback period of less than 10 years for new greenfield investments, which is amongst the best even when compared to global peers. Payback period is the length of time required for ...

Lupin: Look beyond the short-term concerns

News flow around US product approvals and launches remains strong for Lupin. In the last few days, Lupin has received one approval for launch on exclusivity for a Bowel preparation kit and has also launched a scalp treatment as well as a dermatology drug in the US. Besides, it has also entered into a marketing agreement in Japan to exclusively distribute and promote extended-release tablets of schizophrenia drug. The tie up in Japan will boost revenue from the world's second largest drug market, which contributes about 10 per cent to Lupin's topline, while the launch of Bowel kit can garner $30 million during exclusivity. The approvals for new launches have caught pace post Lupin got its Goa plant cleared by the US FDA; 11 approvals in December quarter and more are expected. However, the stock has remained range-bound even after good December quarter performance. One reason could be that these gains may not be as visible in revenue and profits of Lupin in the immediate term given the .

Strong growth visibility for Castrol, Gulf Oil

Analysts expect volumes to improve and profit margins to remain firm going ahead

Note ban poses similar challenges for PVR, Inox

Impact will hinge on incentives offered by these companies to combat currency swap

Pension liabilities deal positive for Tata Steel

With new allowance scheme, the company's UK welfare liabilities will stay limited