After the March 2012 IIP data of a contraction in Industrial output as big as 3.5%, I feel the blog’s readers again felt a need for a change in the blog’s direction, though without the use of interactiv features by the audience, it remains a largely directive effort on which way the world and India’s position in the same is headed and that has not changed at all. Also wit remains germaine that public news networks especially Tv continue to show a shallow knowledge and lack of interest in arguable still Asia’s #2 growth Economy. The current derating of India’s growth forecasts to our 2008 argument of return to the Hindu rate of growth seems a point to anchor.

Also moot is the fact of my being busy with trading across markets and thus Economic and trend commentary becoming specific to more stock and other asset classes as to their performance in the markets and their probably since bludgeoning the IIP data’s sanctity I have been lazy in updating the data items that keep flowing including the new reports on hidden money and the old reports on inflation and IIP as the phenomenal price hike at retail covers ground on India’s real fuel billa nd its payment thereof. A nice infographic in The Economic Times shows the price in rupees for India’s Fuel basket still costlier than at the time of the Crude’s peak because of the negative gains on the Rupee since, itself caused by the fuel bill deficit or the Current Deficit as we know it.

However, with reform on the backburner, more such snide actions by this government and the next will be the only options for the Indian engine to chug along. today’s RBI intervention for example in the FX markets reaped a perfect dividend ont he back of the day to break the Euro globally yesterday and the dollar’s weakness today on the Dollar indices Of course the Dollar index is hardly determined by a lesser currency like the Rupee int he Global FX markets and we can easily keep the gains ont he intervention and the local markets in the Rupee even as US markets pre open send the USD back to 82 with no one wanting to lose this Reserve currencyin the Pacific or European markets and China remains pegged to the currency as well 

The way forward is yet simple. The understanding of th e undercurrents in making reform happen, and timing stories so more of you can appreciate the value of India inthe global economy. my global ites meanwwhile also need a pinch of writing pixie dust to put on ‘paper’ that what we are showcasing and dong in banking, Global retail lifestyle champions and others who ave the next two decades right. Obviously that means the thought process and the interaction must continue. 

English: The Symbol of Indian Rupee approved by the Union Cabinet on 15 July 2010. The Design for the symbol was submitted by D. Udaya Kumar. (Photo credit: Wikipedia)

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If you are not in the midst of having bought Natural Gas, which has just reached $2.6 per mmbtu on the global markets, and are not trying for the Copper, Gold and Silver triad we have right now in perfect correlation, you have to make money on the Dollar contracts and now start switching to the Banks and select Pharma scrips for a start.

Retail Auto may not move immediately in Maruti and Bajaj Auto as traders evaluate the impact of new competition in Exports and the EEFC month end accretions ( as shared by Rajiv Bajaj on networks) 

Check out individual picks at http://next.advantages.us

The India story now almost all available here at The india Post and the Blog of Blogs, showcases a loose bottom around these valuations and nothing in the fundamentals is going to take the markets down further. However as governments go, any steps that look like reviving reforms and rejuvenating indian flows areunlikely before June.

Accumulate best picks now or perish at leisure and as MS’ Ridham Desai also mentioned on the networks over the weekend ( Bloomberg UTV / Market Guru) indicated Nifty picks may not be the ones available at undue arbitrage / discounts in the market. I was thinking of checking up on PFOCUS contracts i.e. not F&O but what future Order pipeline looks like as the ONMOBILE saga also gets a knife edge away from disaster. 

HDFC is a good pick for markets to start back but then someone is still looking for a bargain out their or hoping for a rally breakout on the rebound and that is going to keep the markets yonder from both ends of the horizon. 

Those betting on dollar rupee depreciation and gaining the losses in the amrkets thru its direct correlation on Dollar value would be sitting pretty without portfolio losses but unless bthey actually exit cross movements as the Euro stays nose down, ithey will not really benefit fromt he trade of sell nifty buy FC. The Euro is already down 4% since the ride started and as we pointeds earlier someone is happy that indian currency markets are shally espo in Non Dollar currencies. 

Though faith in the new management has not built up and is unlikely that the bank will enjoy previous confidence levels in the market the Q4 results are pretty impressive for the public sector monolith. The PAT is up to INR40.5 B after its string of new provisioning died a natural death. 

Gross NPAs remain above the bearable industry limit but have ticked down by nearly 4% to 4.44% from 4.61% Net NPAs  are an important item of progress at 1.82% nearly 25% down from December. NPA provisions are less than INR 30 B at INR 28.37B with provision down 25% from INR41.6 B levels in March 2011.  NII is better at INR 117 B from only INR 82 B in theY/Y comparisons with Treasury Income at INR 96 B Fee income is INR 52B and PCR has ticked up further froma  respectable 65% to 68% 

Increase in NII at 49% is based on much better NIMs and the Basel 1/2 CAR remains at 13.8% with india not updating the RWA guidelines for its area of influence. The bank was close to the brink at a CAR of 11.98% last year

PAT beat expectations by 13% Last quarter’s provisions were lower at INR24.1 B (not just NPA provisions) but Year End NPA provisions after catch forward accounting of all restructured accounts and data consolidation would have been much higher in the normal course

After the 27% depreciation on the Rupee to Rs 55 per dollar, The indian It companies with unhedged exposure ( TCS probably hedges only a quarter worth of billing, after its Q3 fracas when it lost INR 1 B in forex translation losses). Even Infy and others except for HCL remain unhedged for more than a quarter currently making up for each quarter’s level with the current 27% depreciation since January (USDINR at Rs 44) 

However that means the small FX gains on $5B of Q1 and $6 B of Q2 revenues for the Top 4 firms excl CTS would yield extraordinary gains of nearly $400 mln each and the same even if only 50% is hared with key clients would mean extra savings thus just ensuring near period growth in outsourcing business but perhaps enough to maintain long term growth in the Industry

Non IT businesses like Energy and Automotive however will still be stuck with rupee purchase agreeemnts and likely pass by gains on Dollar earnings from the depreciation in the rupee while the costs for FCCB/other ECB borrowings will rise another INR 100 B for Indian companies having borrowed at 6% levels yet.

The Euro has broken the sound barrier by going below 1.27 overnight and is trading at near time lows as it completes the down move to 1.22-1.23 but given the queer hedging and predispositions of indian exporters and currency traders the Dollar depreciation seems to be keeping enough pace to drive Euro to a matching significant depreciation in the EURINR trades. The shallow market thus seems to be proffering a great opportunity ( sarcasm should be detected!) for those caught long on the Euro as the cross Fx movement has a long way to go before it catches up to Euro’s own depreciation which continues unabated as silent options for the euro to exit or rather for Greece and others to exit the Euro present itself. The Euro is stable of course but there is hardly anything to stop it till 1.19 and thus it seems a degree of political chicanery and shortsighted ness is involved in the hot trade keeping the Euro to 69.27-69.5 to the EURINR rate when it should easily settle below 68 and the near forward should also in the extreme case lose its premium on the currency. 

Spanish auctions went by cheerfully even as Spain paid a 50% higher yield on 3-4 yr bonds to 4.38%

Data released today shows Indirect Tax collections at INR 330.45 B could have been up 22% over April 2011 except for the reductions in Excise on Petroleum products in July 2011. The Service tax collections have risen robustly by nearly 33% after the increase in rate with the April 2012 colections at INR 88B or INR 8,846 Crs. The 2012-13 Fisc target for Indirect tax collections is INR 5.05 T ( INR 5.05 lakh crores) 

India ended FY2012 with Indirect Tax collections of INR 3.92T on target with B.E. though the rise in Service tax collections was not matched by rcustoms and Excise collections.

Customs collections for April slowed to INR 115.94 B but the increase in excise and Service tax rates yielded the net growth of 17% in Excise to INR 126.05B. The political impasse in passing along prices of Petroleum pdts to consumers continues to bind the government to a weak and growing Fiscal deficit and the Current Account Deficit even as import prices decrease is balanced by a fdrop in the value of the Rupee

india apparently has no bad news left that could shock markets further and yet being one of FDI’s favourite Asian destinations it is unable to get new monies flowing into the deep $2 T markets in equities while Fixed income holds at 8.5%, inflation likely to trend at 7% or below with soft conmmodity prices and Greek exit from the Euro concerning it in the very least even as the Eur INR holds almost close to 1.28 levels when the currency plans to breach 1.27 globally giving it the annual yatra trade for a round trip arbitrage with globa markets.

Japanese and Singapore GDP growth enthused the Asia economies but not India, China’s slowdown has given impetus to the maxim that India will lead the recovery but no hard cash has followed yet. Most global banks and institutions are carefully looking at India’s bank regulations and though there is no GAAR there is no impetus for investors to grow their India investments like they seem to get in China’s totalitarian regime. 

Corporates like Bajaj Auto become very poor examples of India’s independent matured markets having gone by RBI diktat, hedged 85% of their large export earnings at below Rs 50 to the USD and looking at quick EEFC redemptions again to shore up India’s 5% Fiscal and a not far behind large current deficit where again lowering commodity basket prices still do not mean any benefits accruing and now the bar has been obscured by another 10% fall int he Rupee. there is no real bad news still left though and that means probably market wants to consolidate before moving up while traders are already impatient leaving the markets open to more whipsaws in trading, 

Indian yields settled down to 8.5% comfortably after a run on the Indian bonds brought them back above 8.5%

Does it have an hackney licence? Parked outside Rolts Garden Centre, Clacton Road, Elmstead Market, this is a Bajaj RE three wheeled passenger carrier. Back in its native India, they are used as taxis. (Photo credit: Wikipedia)

when the Dollar ran up a big 1% wall and kept the Euro from crashing in Indian trades. The recovery in rate sensitives may now have a stronger reason to yield to Export heavy businesses like Bajaj Auto and Infosys but whatever be your sectoral poison, the Indian markets will accept all inflows and the inflows will keep getting stronnger from these levels in the equities market.

And though no one would bet on the Rupee’s recovery, the RBI would come in only once and thus that currency equation remains weak for us under

Bajaj auto rickshaws in Adama, Ethiopia. (Photo credit: Wikipedia)

pressure from hot money as always. Asia leads global recovery and in the Asian recovery, India leads from the front followed by China and its ASEAN friends with Chinese investment

The Euro unfortunately complicates india’s still effectively Dollar pegged currency as it wants to protect the interest of Exporters dependent on Price for European demand for indian goods for reasons best known to India’s specific non Capex led dependence on Exports.

The import basket continues to offer super deals to aid the india inflation story and that has definitely eased the pressure on policy planners. But trading whipsaws keep India inc busy rather than new business paradigms. Facebook’s $104 bln IPO or Piramal’s INR 35 bln purchase of Decision Resources Grp become easier to appreciate for predominantly consumption Economies in the USA than for the Indian palate. 

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China Premier Wen Jiabao deliver the Report on the Work of the Government at the Third Session of the Eleventh National People’s Congress on March 5, 2010 (Photo credit: Wikipedia)

While Indian inflation is likely to step out of the sub 7% mark on the wholesale levels to more than 8% following the retail index, Chinese inflation ticked up to 3.4% leading to a reaction in the morning’s Asian opening. Chinese imports were up only 3% like for India at $37.9 bln with not just Oil but in India’s case two thirds of the Diamonds and Gems trade shutdown and Gold and Silver imports are down by a third from a government increase in import duties. The tradedeficit thus comes to below $160 bln at the cost of over $100 bln in Exports according to the trends explained by the Govt official,  after the first month of the Fiscal at Data release yesterday

Chinese inflation easing further may not be a good thing as it also follows a drastic fall in demand consumption, the bulwark china is relying on to stimulate growth though outgoing Premier Wen Jiabao has been vocal in the last few months against the culture of imported consumption items in China. We felt more comfortable for China at the 3.6% mark for inflation in March as it was within the 4% mark and Banks though restricted by opportunity on Lending had still managed healthy Q1 profits

Asian Economies of India and China’s leadership in growth is a required element for the continued recovery in Western markets and limiting of European troubles though European trade continues to favor banana policies and non South Asian economies for trade and investment hopes. India on the other hand reported new FDI of $ 8 bln in March but the Exxport slowdown and the increasing inflation from the 21% depreciation in the Rupee  int he last six months will hurt growth and consumption with Automobiles sales in April already down to 4% growth or 235,000 units for April including Exports. Ford, Nissan and others would be increasing exports from the added capacity in their indian plants from this year

India is hoping to get a further $1 Tln in Infrastructure funding from private funds to quasi SWF structures sponsored by banks and government

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India’a FDI process received a tremendous boost in March after $2 bln flows in January and February, itself a fair score were boosted to $8 bln for March even as international media slips into a morass susing the Indian voice and using their ignorance of India to blindfold and then play with Economic Darts ( or half cooked $$art points).

Hamersley Iron 20 class locomotive at 7 Mile Yard entrance, Dampier, Western Australia. (Photo credit: Wikipedia)

India is well provided with such munition for its unfriends starting with the 4% Current Account Deficit and the double digit depreciation of the rupee to the curbs on FX trade imposed by RBI since October and added to today with punitively enforced conversion of Export dollars to a local currency. That boost was also needed for the Rupee as it faces severe action by European speculators stunted by the lack of LTRO ritual and a drying up of business back home.

FDI grew in the last month of the fiscal and even allowiing for the fiscal end corrections if any in the tabulation, is still a great score considering that FDI in multi retail was never satisfactory after coalition politics robbed the Indian markets of a great expected boost in the Hindu new year. The $36 bln FDI in 2011-2012 is still below the FDI receipts expected when the Fiscal began last year before it ended on a low note, expectations of growth scaled down to below 7%. Asian competition from China and Indonesia apart, India still expects to see a boom in retail consumption and needs a lot of private participation in infrastructure. Telecoms and GAAR apart as they target specifically sensitive corruption and governance issues, Foreigners remain welcome and banks may not be the only ones growing business in Asia esp India in 2012 and later.

Routing of FDI thru Mauritius has been a special charm for the India story signalling to most Indians on the ground that jugaad is still the order of the day and hence the efforts by the government to re emphasise that india is not one of the banana republics or one scrip economies that Western investors seem to favor. Indonesian and ASEAN FDI story is however more freely linked to Chines e FDI into and from these Countries.

The March rush may be explained by earlier announcements, large ticket investments expected in Mining and Energy from BP and other global players. Rio Tinto is part of a diamond exploration project in Central india.

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Is it the May series with a special corner for Shorts on the Indian index or is there another carry home from this battering of the index this week? The battering of the Rupee is incomplete and mainly destroyed by the political risk people carry when they see India. but another reason obviously is that there are about 300 scrips to choose from as one chases quality and the half of them that are the best have already reachedd FII investment limits. But that’s just me. I think the markets are tremendously undervalued right now but everyone is too worried about entering into the Buy mode with so much short interest so early in the series. Yesterday’s definitive turnaround in the commodities and the cracks in the Euro are final though and the Euro should now separatley lose its premium to the Rupee which it gets from being “jined aat the hip” to the Dollar in Rupee tradiing, where sophisticated desks like Stan Chart and maybe HSBC can come in now that their credentials are established in the currency ( SCB ) in the past 4 years. 

Only two months to go for the Olympics and what a medal haul it will be for Indian pugilists and Badminton teams. Archers, Shooters and Hockey should also present good fun. Over 70,000 volunteers in London are making the games happen and I belive 14 or more games are being held in temporary arenas. Let’s see how the games go! 

The Banks and the markets thus have had a direct correlation with trading movements in the Rupee over the last week which cannot last and the Bank nifty a good 9400. I have started nudging it. Ofcourse the market still wants to look for a 4700 restart to the new bull run or whatever it will be this year…

India gets to consolidate the new $300 bln a year target with just under $25 bln in Exports in April and thankfully Imports started off at a low rate keeping to $37 bln for a $12 bln deficit even as EEFC restrictions / conversion of $2.5 bln into rupees shored up the dollar earlier in the morning

Yields are already below 8.5% for a target and will likely range to a 8.75% mark at the most liquidity unchanged from last week. June is likely the bbig Oil import month though that is pure speculation. India is doing fine in Cotton exports to China for a few days yet, 

Dollar should have crawled back to 53.27 and their should have been more pressure on the EUR INR rates given global movements

Pharma mid caps have survived well, Glenmark having grown OPM from 11% to 20%. Revenues have comfortably crossed the $200 mln threshold for the Quarter at INR 10 bln up more than 25% and more than INR 2 B in EBITDA 

Rupee Depreciation of nearly 20% over the year kep IDFC growth to $1.2 bln in Revenues even at a lax benchmark of INR 50 to the Dollar. Net Profit is INR 1.6 bln or a good NPM of 25% for the whole year. Q4 data hints at a dollar component of costs probably from Direct Capex on projects to some extent (likely minimal component and temporary increase in costs) with Q4 margin squeezed to 22%  Growth in profits is intact on year and more management commentary is expected in top half of the trading day. 

After a long hiatus, Kotak managed to increase its lending book, growing it to INR 39k crores (INR 390.79 bln) or $7.81 bln up 33% from last year even as the NIM contracted but remained a high 4.8%. Also Fee income from Insurance premiums of INR 10.97 bln added to the bottomline’s health and remained the predominant source of NII for the bank and the advances were apparently more in the retail book from growth in CV and Agri portfolios.  Transaction Banking/Trade Finance income of INR 18.08 bln however was consistent across three quarters as the bank ended the year with 50% income from NII and 50% from Insurance and other fee income propositions with a healthy topline growth on the year from INR 109.97 bln to INR 129.37 bln (including gross interest) The bank however reported a 33% – 67% NII:Other Income mix for Q4 (1.05:3.07) Its branch/ATM network is growing respectably in the meantime with 350 branches and 800 ATMs.  For the bank alone the ratio of NII to income is nearly 3:1 most other income coming from subsidiaries. Withinthe bank segments proportion of Corp to Retail income is 5:3

Net interest income would account to INR389 bln for the full year and INR 50.9 bln for the quarter while insurance income has grown the Other income figure in Q4 and is INR 28.91 bln for the year 40% of which of INR 10.96 bln coming from this quarter. Operating Profit for the bank for the quarter after provisions grew to INR 7.51 bln and INR 26.57 bln for the year or nearly $500 mln given the volatile moves in the rupee at the benchmark of INR 50 to the dollar this comes to $530 mln.

 PAT for the year however grew less than 20% even as topline grew the same for the year. Banking operations PAT aapparently has crossed our 30% threshold to 33% growth. Profit from Insurance operations ( OM Life) has doubled to INR 2 bln while Kotak Securities and Kotak Prime remain respectable members of the Family in contribution to Profits. Consolidated PAT for the group has grown to INR 5.28 bn of which INR 3 bln is from the bank 

The bank’s deposits growth has kept pace with the growth in advances with CASA growing to 32% on Deposits of INR 390 bln. 82%of the bank’s PBT is from lending operations. Total Assets are growing it to INR 920 bln while growth seems to have been uneven till here since 2007 when Capital Market Operations contribution was more than 53% of the PBT with a net Na ratio of just 0.49% the bank’s Tier I Capital ratio is a respectable 15.7% allowing for future growth in assets 

The bank will have to grow its Commercial Banking advances from INR 181 bln if it wants to compete with the big banks as it manages its access to Deposits with a 6% savings account proposition which has returned the bank to growth 

Though the man himself was there to present the results, a profit growth of just 16% and a topline of just under $1 bln is growing on the company’s investors like a long clinging shadow you want to be rid of. Still the stock remains stable and the comapny is growing its book near 20% In a non Asian economy the double digit growth in profits could indeed have been appreciated, but in the indian context it means the slowdown shadows are just around the corner unless the company can put it behind it given the drop in interest rates. Also crude is falling so, the experiment with reducing interest rates need not be cancelled by the 8.65% inflation rate from March announced last week

GAAR has been amended in the Finance Bill for implementation in 2014, then it will be brought out for a public discussion and after the issues are understood by all, the proposals would probably be dropped. That still leaves NCTC, DFS’ Aadhaar alternative, GST, DTC and Aadhar itself. In the case of banks for example the last date for implementing Aadhaar ids is another 55 days while the Department of Financial Services expects them to implement the alternate. 

Actually GAAR may stay alive yet it will not be applied with retrospective effect and though Vodafone continues to live in suspense it will likely not pay more than some minimum tax to settle the matter. ( should not be $2 bln though) 

GAAR has been amended in the Finance Bill for implementation in 2014, then it will be brought out for a public discussion and after the issues are understood by all, the proposals would probably be dropped. That still leaves NCTC, DFS’ Aadhaar alternative, GST, DTC and Aadhar itself. In the case of banks for example the last date for implementing Aadhaar ids is another 55 days while the Department of Financial Services expects them to implement the alternate. 

India’s banks already satisfy a core Tire I 8% criteria so a move on to a Tier I 9% criteria which RBI proposes would be an easy task and not need INR 1.5 T of cash as ET and some experts have suggested. It also means however that India will again choose to face BIS with “Country specific requirements” to completely do away with complicated RA considerations. Apparently Goldman Sachs agrees that India’s banks do not need much to get to the Basel III requirement too. However in defense of those who cooked up requirements a typical global bank would get charged 1.5-2% of its Asset book when it moves to the new Basel III RWA regime, sometimes even more.

That means that Basel 2 and Basel 2.5 ratios for banks have to be far more than 10% for them to consider being safe for Basel 3 even after inter bank capital is cancelled . That at once identifies the different challenge for global banks who have been surviving on 20-30% components of Capital coming from other bank issues , each scratching the other’s back and that it fortunately is not a systemic problem in India where inter bank exposures are far more limited and measured against specific deals

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The Indian government is in a bind and perhaps that would bne a reason the old bound and gagged Left would not okay Pranab Da for the President’s position so he can take another stab at the regressive Indian pullback from GAAR for Vodafone to spectrum cancelation for Uninor, that’s truly got everyone swimming for a new shore for the island that is India. Alas, as an island India continues to get the same amount of interest as a Fiji than as a large landmass of its size and the large ( and getting fed to be larger) middle class daily especially because investors know they can demand and expect such fly bys as Tax cancelations and fixed spectrum prices. Both Uninor and Vodafone present real threats as they would invoke longwinding legislation that would not only hit the government offices again for not being prepared but also wipe out  remaining FDI interest in India, telcoms and more in India for more than 3 years. it would be foolhardy to think we can live without FDI even in Telecom where we have 70% of the population holding phones let alone, mining, power and infrastructure where we have been barely able to begin. 

That does not mean India will keep on growing though, so one is not sure what exactly cst Adidas half the Reebok india stores and a EUR 870 mln correction in the books alongwith SS Prem’s leaving the company, Reebok seemed to be far up the path of success and if all that was an illusion we deserve to know as much as we would know in the case of alisted company

The HSBC buy transaction to facilitate RBS exit has been cleared by the Competition commission last week and was also cleared by RBI yesterday. The mysterious delay around the transaction arose fromt he RBI making it clear it could not transfer RBS/ABN AMRO branches directly to HSBC and had to separately get those branches with new permissions under the HSBC licence after RBS turns them over consequent to the approval of the transaction. However, all that paperwork might actually make sense in the long run and phew! HSBC won’t be compaining with 72 branches allowing to ramp up retail business which remains less than a third of the bank’s profit of $811 mln from india in 2011. The mint report on the completion “Central Bank clears HSBC deal..” was very clear on the flow  and was much better than suffering Tamal’s recent avatar and even the S&P analyst that did break the news about bank NPAs but did not really show any strength of analysis in there, taking the run off” kind of scenario for banking industry lookahead…

The Indian Rupee may not get much of a shot in the arm from RBI intervention if earlier instances hold the key. RBI has barely $260 bln in FX reserves and cannot sell ore than $1-$1.3 bln dollars in most issues. thus selling the Rupee may not have bee n an aberrant activity and may likely continue tomorrow to hit 54 before starting its long awaited clawback. at least thas what ist looks like from here ( and that cost me most of the up trades on the rupee today) the RBI interventiona s everyone knows was effective only at two step levels near 53.27 and then 53.40 and will keep firepower to 54 levels.

However Indian bond yields have hardly any reason to keep yields oto 9% as they are headed If they indeed refuse to turn at 8.77% – 8.88% then it is likely that the import bill is causing a run ont he rupee , an obvious risk of transaction based currency depreciation as our current deficit plays itself open to further devaluation while fixed exchange rates could further hurt the CAD which despite the targets may not claw back easily this year. 

I wonder if the Diamond Export control thing is temporary or if there is any real surge from Cotton exports that have begun this month

Rupee broke 53 late yesterday and lost another 45 paisa in the day’s trade today. One would probably let the rupee find a further bottom this wek and equities though reacted today should not be unduly concerned. 

The Rupee, the indian Fixed income crunch, the S&P shock and the Bharti Airtel Results. How exactly would you prioritise them again. A critical question for the shallow markets in commodity, yields (fixed income) and currency, the question is equally important as Corporate performance keeps getting lower importance in the wholesale markets ( all non equity segments) and higher importance in the “to whatever extent” retail markets ( cash equities) 

Yields smartly moved nearer 8.75% as Dollar continues its upward trudge unilaterally against the Rupee even as GBP an dYen check its moveinternationally. Commodities action is finally shifting to real commodities and I read to my great surprise that Bill Gross is actually parking the car right next to my spot on that, looking at the same as a market linked event for higher interest rates ( check the confabulations at ZH / advantages.us ) 

it seems to me that the quarter’s results are just confirming what are the best investments in the Indian and US markets and really  the noise on frontier markets will again turn out to be highly timed unidirectional shrill tones that don’t last more than 6 months each in trading as markets hardly exist for anyp of those and one time agains will hardly accrue to 3 maybe 4 parties at the most and one of them have to be the local citizens/governments/economy

the two important restructurings for the quarter apparently added almost 500 crores each and Net Interet income seems to have flashed a good INR 29 bln number. Reports are awaited and likely to be the reconfrimation of their consolidation around the ongoing NPL boom as they have improved net NPAs and avoided strictures from S&P even as S&P has derated the sector outlook for 3 out of 10 institutions while sounding the horn on India’s sovereign rating 

Q4 net restructured assets are INR 42.7 bln and the scrips intra day fall was mesmerising leaving the banknifty and the sector none the wiser for such sterling results that have taken the bank up after a long weinding road for the coming new competition in which right now the RBI intends to force the new licensees to build on Tier 5 and 6 towns and rural India franchises

Savings Bank Deposits grew 108% on year even as Assets grew to INR 750 bln or $15 bln but the growth of Net IUnterest Income and Profits was neck and neck at 30%. The “but” in there is from the expectations of the banks followers for the bank to grow aggressively in size as Indusind catches up on the strength of the retail book and BRA modifications run their last mile this year. Kotak has also stepped off the flatlined escalator and started climbing back in prospects so we’ll have to look to results there.

The NII was INR 4.5 bln and Profits 2.72 bln for the quarter. Year end grrowth data is as impressive as could be as was showing in the management confidence in the results post conference

NIM is 2.8% and NPAs (Net) 0.05%

Cement  Dispatches up 8% on month and suddenly the below 5% core inflation number is showin g in the growth in Indusind profits by near 40% to INR2.31 bln Thoughhgher dispatches could not support the prev Quarter EBITDA at Ambuja cement and JPassociates continues to languish in the new economic set up, Indus ind itself continues to surprise financially after investors ignored vestigial baggage at the top and in the boardroom to increase their valuation of the company and grow the banks CAR earlier in February. The bank seems to have grown some green shoots in other industry clients moving away from the base provided by the hinduja owned Ashok leyland as  it refashions business boundaries with other newcomer Religare in lending, broking and even investment banking per se as corporate like to figure outt he enigma of ramesh sobti and Oil and gold trades move on to harder investments in India sans retail FDI and sans Kingfisher

A roadblock close ahead, tied to Indias myriad concerns with internal fiscal andp political security is the fact that Indian banks and PE are hardly encouraged to go with Indian corporates and help them bid for Foreign resources and industry assets, the last one in Ssangyong’s M&M sale a far distant dream

Recent research from Fairwealth parks IIB to a retail book growth of 30% each in FY13 and FY14 to INR 250 bln, and for all practical purposes its overall book will still be close to INR 500 bln by then even with the emphasis on retail assets for growth. CV financing continues to bleed NPLs while adding strnegth to the book While CASA is likely to have improved further from 25% last quarter, its 300 new branches should look at a higher volume of business than currently estimated by research. A branch network of 650 branches should help NIMS and also Capital raising from larger investors as it sheds the label of mid cap and engineers a grwoth in book already stressed ( to be confirmed on avlblty of full financials) by the growth in book to less than 11%