DELEVERAGING CYCLE
Mahesh Patil on the biggest sectoral overweights and underweights in current market scenario
Where the results are good, we are seeing those companies getting very well rewarded, especially in the industrial, capital goods sector, the real estate sector. But in sectors where there have been some disappointments like in the consumer space the stocks have also equally reacted on the other side.
Expect decent consumption growth but investment growth will be stronger: Chetan Ahya, Morgan Stanley
Chetan Ahya of Morgan Stanley compares past and present investment trends in India, emphasizing the significance of investment growth for sustainable economic development. He discusses various factors impacting the current economic cycle and growth outlook. He also said we should not expect a big acceleration in rural consumption growth in terms of FMCG companies’ volume growth.
Expect to see a pickup in mass consumption in H2 of next financial year: Ashish Gupta
Ashish Gupta, CIO of Axis Mutual Fund, expects a deleveraging cycle for corporate India in the next five-seven years. The capex upcycle has started, benefiting companies. The market has responded to the strong economic recovery, upward revision in GDP growth, and corporate earnings. The confidence is derived from the multi-year cycle, despite the elections.
Vedanta Resources to deleverage debt by USD 3 bn over 3 years
The company recently divested a significant portion of its shares through its promoter entity Finsider International, and set the stage for strategic manoeuvring within the company.
ETMarkets Smart Talk: Stay invested! India is at cusp of a multi-year growth cycle: Devang Mehta
India is on the brink of a multi-year growth cycle driven by capital expenditure, credit growth, consumption, and corporate profitability, according to Devang Mehta, Director of Equity Advisory at Spark Capital Private Wealth Management. Mehta also stated that sectors related to credit growth, financials, and capital expenditure are likely to lead the next phase of the market rally. Rising oil prices, a depreciating rupee, and the negative impact of the US market are concerns for the Indian economy.
Cinderella time? This is the sweetest credit cycle in a long time: Uday Kotak
India has differentiated itself. And I like to call India a cleaner white shirt in a dirty shirt world. I would like to see the investment cycle come back. We are seeing people still cautious on the investment cycle. And we are still too much driven by consumption as the core of our economy.
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How to ride the capex trend for mega profits in stocks
In the short-term horizon, a company might see margin compression due to investments in capex. The same starts easing as soon as a company starts production from new factories. This makes that company value accretive for its shareholders in the medium to long term.
Invest in equities with confidence, through cycles to realise its full potential: Anoop Bhaskar of IDFC MF
“Returns from April 2020 are clearly unsustainable and should not be used as a referral point for future. Given the liquidity equity and especially equity mutual funds offer should also be an integral part while allocating for the future,” says Anoop Bhaskar.
Reliance's 4th investment cycle of $50 bn to double earnings
The firm's "fourth investment cycle this century has significant differences to past cycles, underappreciated energy tailwinds and the potential to double profits by 2027," Morgan Stanley said in a report. The spending is planned on chemicals, 5G, retail and new energy over the next three years.
Reliance's 4th investment cycle of $50 bn to double earnings
This included bidding for USD 11 billion in telecom spectrum, spending USD 1.6 billion on new energy acquisitions and expanding its retail logistics capabilities, it said adding the investment cycle is supported by cash flow.The investment cycles are now coinciding with upcycles in its core businesses - in contrast to the last investment cycle.
Capex cycle a multi-year theme? Keep an eye on these 13 stocks
The domestic brokerage listed 13 stocks to play the multi-year theme. Financials - ICICI Bank and Axis Bank, capital goods/infra - L&T, Siemens, Cummins, and GR Infra and capacity expansion-led volume growth - UltraTech, Dalmia Bharat, Navin Fluorine, Aarti Industries, NTPC, Phoenix Mills, and Havells India.
JLR recovery to pace Tata Motors; deleveraging a key trigger
The operating margin before depreciation and amortisation (EBITDA margin) of JLR dropped by 620 basis points sequentially to 6.3 per cent because of lower sales volume, lower production of superior margin products, volume reduction in the Chinese market and higher input costs.
We could be at the beginning of a multi-year credit cycle: Vinay Sharma
“We have been sanguine on credit growth for quite some time and it looks like pieces of the puzzle are now falling into place. Some of the smaller industries and SME, MSMEs took the brunt of GST and demonetisation from 2017-18 onwards. We think that effect is behind us and now they are also back to their normal self and large industries are showing signs of recovery after a long time.”
Tata Steel is in a much better place; we can grow and deleverage at the same time: TV Narendran
“Overall I expect the steel industry to have a few good years ahead and nowhere in the steel industry apart from India is capacity being added significantly, unlike in the past when steel prices were high and a lot of capacity was added in China. So overall, we are in a much better place and that will reflect in the numbers for the industry.”
8-8.5% forecast more realistic; capex cycle to improve in FY23: CEA V Anantha Nageswaran
The projection which the economic survey has made is at the conservative side compared to the projections that other agencies have made. Compared to the original projection which had forecasted double-digit growth rate, these growth rates (8-8.5%) are more realistic, he said.
Macrotech has managed to pull off deleveraging as well as a growth story: Abhishek Lodha
“Ours is a deleveraging cum growth story which is not easy to pull off but we find that we are able to deliver on both fronts. Our cost of debt has moderated by 120 bps or 1.2% over the last nine months and we expect this to significantly fall going forward.”
Fast growing credit demand in Q3 indicates revival of pvt capex cycle
Sectoral credit numbers also reflect better disbursements since September 2021. Growth in gross bank credit till August 2021, which was in negative by Rs 54,100 crore, was in the green with an incremental Rs 2,10,700 crore in November 2021-an incremental growth of Rs 2,64,800 crore between September and November 2021--, thanks to uptick in credit to industries rose by Rs 45,800 crore, compared to net outflow of Rs 76,200 crore during April-August 2021.
Can much-awaited capex cycle unleash bull run this year?
Historically, during 2003-07, when India saw one of the strongest capex cycles, markets zoomed more than 6 times. In fact, sectoral indices such as banking, auto, metals, capital goods rallied between 6x to 23x.
Revival in investment cycle makes a case for more allocation to infra mutual funds
The government's initiative on National Infrastructure pipeline provides long-term visibility on spending in key sectors.
Crisil predicts revival in private investment cycle after more than a decade
Crisil expects the government led PLI scheme to help aggregate industrial capex increase 1.3 times through fiscals 2022-2024 in comparison to fiscals 2018-2020, potentially generating Rs 2.2 lakh crore of capex led by sectors like battery, automotive, and specialty steel.
Srei Infra mulls deleveraging balance sheet, stepping up recoveries to reduce stress on books
Earlier to this, its subsidiary Srei Equipment Finance Ltd (SEFL) attracted a total investment proposal of Rs 4,200 crore from the US- and Singapore-based investors.
India could be in for a very prolonged capex cycle for next 10 years: Pankaj Murarka
“After a very long period of time, I see a very high level of business confidence amongst corporate CEOs and they sound very optimistic on the outlook for their business over the next two to three years.”
Jhunjhunwala's latest stock pick is a play on deleveraging, dividends
Price targets for the stock suggest analysts are valuing it at 4.55-5.5 times FY22 EV/Ebitda and a P/B of 1.1 compared with a historical average of 0.7 times. They see 25-63 per cent potential upside for the stock from here on.
Jai Balaji Industries: Back from brink of bankruptcy, but can it be a revival bet?
After becoming a 1MTPA company from being a 1 lakh tonne firm in 42 months, Jai Balaji became more ambitious. It embarked upon a plan to set up a 5 million tonnes steel plant along with a 1,215 MW power plant at Purulia, West Bengal.
How to play a new capex cycle in the economy?
The domestic market has climbed to record levels, even as it grappled with the worst of the health crisis.
Early green shoots seen in industrial and capital goods cycle: Pankaj Tibrewal
“Incremental tilt is towards cyclicals which includes industrials and capital goods. These will be both short and long cycle plays. Financials make up the the third sector in this category.”
Adanis to double free cash generation and are deleveraging as a group: CFO
“We are sticking very closely to what we do best -- transport and logistics and utilities and power,” says Jugeshinder Singh.
Focus on infrastructure and ease of doing business: TV Narendran
There is a great opportunity for money to flow from the government to people through the construction sector and create demand for many products, says Tata Steel MD & CEO.
Balance sheet deleveraging from right issue fuels rally in Minda Industries
The stock of the Gurugram headquartered company gained 5 per cent on Wednesday trade, while the BSE Auto index rose 1.64 per cent.
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