Channel checks – Awaiting structural changes in weak environment


 

Our channel checks with various stakeholders suggest that railways are focused on increasing volumes and may open up new commodities for containerisation and also rationalise haulage charges. However, there are near-term headwinds for container train operators (CTOs) in the form of EX-IM imbalances at ports and terminals, increases in the terminal capacity and pricing pressure. In fact the entire logistics chain – shipping lines, freight forwarders, Container freight stations (CFSs) and CTOs – are under pressure due to declining international trade volumes. Hence we cut our EPS estimates for CONCOR and GDPL for FY17/18 by 10.5/8% and 21/21% (below consensus). After a c.30% rise since the Feb low (despite a 16% cut to consensus FY17 earnings), we believe CONCOR may be pricing in most of the positives from dedicated fright corridor (DFC) and downgrade the stock to NEUTRAL. We maintain our BUY on GDPL as we believe the risk-reward is favourable.

Channel checks: possible structural changes although near term weak

With a focus on volumes, the Railway Ministry is looking to implement structural changes by freeing up more commodities for containerisation. Moreover, It is willing to look at rationalising haulage charges to attract volumes and market share from road. However, the near term remains clouded for CTOs: a) the EX-IM imbalance both at ports and terminals results in a greater number of empty containers and b) pricing pressure through confidential agreements with shipping lines. The entire EXIM logistics value chain (shipping lines, CFS and freight forwarders) is under increased pressure due to lower volumes, over-capacity, pricing pressure and deteriorating payment terms.

Downgrade CONCOR to NEUTRAL

After a stock price increase of 30% since the Feb low, we downgrade CONCOR to NEUTRAL with a FV lowered from INR1475 to INR1450. We believe at these levels the DFC opportunity seems priced in. In our view, further upside would depend on: a) increase in visibility of DFC commissioning; b) opening up of more commodities for  containers by railways and c) rationalisation in haulage charges by railways. Our checks suggest that the near-term weakness will continue given the EX-IM balance, increase in terminal capacity and pricing pressure. As a result, we cut our EPS estimates by 10.5%/8% for FY17/18 and are 8-10% below consensus

Maintain BUY on GDPL

We cut our EPS estimates by c.21% for FY17/18 based on our channel checks that point to increased pricing pressure in both the rail and CFS businesses. The rail business that contributes 57% to our FV has an excellent DFC opportunity, which is the key reason for our positive stance. While our FY17 consolidated EPS estimate is 13.5% below consensus, we think the market is pricing in just 45% of this opportunity which we value at INR105. We think this provides a good entry point for long-term investors given the stock should start to factor in this value as visibility improves over the year. Moreover, the conclusion of ongoing negotiations with a PE investor on the compulsory convertible preference shares (CCPS) issued by the rail business could act as near-term trigger, in our view.

RBI issues large corporate exposure draft guidelines for banks


 

  • Banks will have to set aside higher provisions and assign higher risk weights for loans to large companies beyond a certain limit.
  • “Specified borrower” class has been defined as –  one that has aggregate fund-based credit limits (ASCL) of Rs.25,000 crore at the end of this financial year. This limit will progressively reduce toRs.15,000 crore in 2018-19 andRs.10,000 crore from the start of fiscal 2020.
  • RBI also proposes to create a normally permitted lending limit (NPLL), which is defined as 50% of the incremental funds raised by the borrower over and above the ASCL from the date it becomes a specified borrower.
  • For loans over the NPLL, banks will need to set aside an additional 3% provision. They will also have to assign additional risk weights as high as 75%.
  • This has implications to the capital ratios of the banks and essentially will increase the  cost of borrowing for these large corporates. In the absence of deep bond market, the corporates may still have to rely upon the banks for their funding needs or find alternative sources.
  • To further de-risk the banking sector from corporate loan exposures, the regulator is also considering capping a bank’s total exposure (including loans, on and off balance sheet items and market instrument investments) to a single corporate entity at 20% of its Tier-I capital, and for a group of connected companies at 25%. The current limit is 15% for a specific borrower and 40% for a connected group entity.

 

Former Wipro top exec Sangita Singh may join Infosys

  • According to a news article, Sangita Singh, ex-Wipro chief executive of Healthcare and life sciences, is expected to join Infosys as an EVP and head its ~$800Mn healthcare practice.
  • She will be replacing ex-Infosys VP Manish Tandon, who left earlier to CSS Corp as the CEO.
  • Her relationship with leading healthcare companies and Wipro’s top accounts such as Johnson & Johnson, Astra Zenca, Takeda etc. will be a positive for Infosys , in our view.

“Dahi handi”


MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday

NEWS & PIX

  
 KAB!R M ALI  
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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

IMT_1005

MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on Thursday Photo by Imtiyaz Shaikh

 

 

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MUMBAI: Curd spills devotees form a human pyramid and break the “Dahi handi”, an earthen pot filled with curd, as part of celebrations to mark Janmashtami in Mumbai, on NEWThursday Photo by Imtiyaz Shaikh

The Blind Man from Don’t Breathe, Stephen Lang, to be seen doing a Bollywood dance number!


Stephen Lang stars in Screen Gems' horror-thriller DON'T BREATHE.

Stephen Lang stars in Screen Gems’ horror-thriller DON’T BREATHE.

Bollywood is known as the destination for fantastic dance moves, impeccable drama and peppy music. Everybody wants to be a part of it and Stephen Lang is no different! The actor who will be seen playing the role of an intimidating blind man in the soon to be released film, Don’t Breathe, will also be seen shaking a leg on a Bollywood dance number in the movie ‘Solar Eclipse’- the depth of darkness, where he is playing the role of DIG Sunil Raina, a movie based on true events, that led to the eventual assassination of Mahatma Gandhi.

“I do a Bollywood dance number!  The film is about the assassination of Gandhi. My Bollywood experience was extraordinary! It was phenomenal! It could be a wonderful film but on the other hand it could be the final nail in the coffin of my career – we’ll see!” says Stephen Lang with a smile.

We are sure that Stephen will charm us with his moves but right now we can’t wait to see him on the big screen as the Blind Man in Fede Alvarez’s, Dont Breathe.

 

Watch Don’t Breathe, releasing September 2nd in a cinema near you.

ELLIE GOULDING SHARES NEW SINGLE ‘STILL FALLING FOR YOU’


 

TAKEN FROM THE ORIGINAL MOTION PICTURE SOUNDTRACK TO ‘BRIDGET JONES’S BABY

AVAILABLE AUGUST 19TH ON POLYDOR RECORDS

 

 

Multi-platinum selling global superstar Ellie Goulding today announces the release of her upcoming single ‘Still Falling For you’. The single, available August 19th via Polydor Records, is taken from the original soundtrack to the upcoming motion picture ‘Bridget Jones’s Baby’. The full soundtrack will be available on September 16th.

 

Since the release of her third studio album ‘Delirium’ which featured the record-breaking ‘Love Me Like You Do’ and monster singles ‘On My Mind’ and ‘Army’, Goulding has been enjoying a year of knockout live performances in stadiums and festivals the world over including slots at Glastonbury, Coachella and Lollapalooza.

 

Now offering her first taste of new music of the year, Goulding unveils the beautiful track, which was written for the upcoming soundtrack. To date, Ellie holds three UK #1 singles, over 30 million worldwide sales and Brit Awards for Best Female Solo Artist and Critics Choice.

 

Bridget Jones’s Baby will be in cinemas from September 16th in the UK. For more information on Ellie Goulding, please contact Chris.Slade@umusic.com.

 

http://elliegoulding.com/

http://www.youtube.com/artist/ellie-goulding

http://www.facebook.com/elliegoulding

 

Statement by Mr V S Parthasarathy, Group CFO, Mahindra Group on appointment of Mr Urjit Patel as next RBI Governor


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Mr. VS Parthasarathy, Group Chief Financial Officer, Mahindra Group

“Urjit means ‘Possesses Great Might’, the mighty task of continuing Rajan’s good work could not have been in better hands. As the new Captain takes charge at RBI, what is guaranteed, with a fresh perspective, is Continuity. This augurs well for the industry and the Country – a clear win-win. This will increase the markets’ and investors’ faith  on direction and implementation of monetary & other policies.

 I am sure that corporate India will welcome Dr. Patel’s appointment and look forward to a period of sustained forward momentum under his Governorship”

V S Parthasarathy

Group Chief Financial Officer, Group CIO &

President (Group Finance and M&A)

Member of the Group Executive Board, M&M Group