2. Equity View: Last week Reliance industries published their
results which were better than expected with almost a 10% increase
in profits Y-o-Y. The surprise was an extremely firm gas output
from its shale gas assets in the United States. In fact, the
production is more than that of KG D6 basin. We believe that this
kind of output might continue going forward which will provide an
extra cushion and revenue for Reliance as compared to market
expectations. The capex cycle for the company continues with almost
7 billion dollars invested in fresh oil and gas assets, these will
produce results going forward. The retail business continues to
grow in size and is also a breakeven at the EBITDA level now so we
believe this will also provide an extra cushion for growth in the
company in future. For the year as a whole, we expect 10%- 15%
earnings and revenue growth and the stock might outperform in short
to medium term. Hence we continue to be positive on Reliance
industries. In terms of other corporate results most of the IT
companies have published decent numbers. TCS came up with a good
set of numbers with 3% Q-o-Q increase in dollar revenue. The
company also delivered a healthy profit growth of almost 40% Y-o-Y.
We continue to maintain a positive stance on TCS. One of several
key macro economic data points published last week was CPI which
was at 7.3% v/s 8.3% last month primarily due to fall in prices of
fruits and vegetables. The WPI inflation also showed a downward
trend at 5.43 v/s 6% last month thus both the data points on
inflation continue to be positive for the economy. We do not expect
any change in RBIs stand thus do not expect any rate cut till the
time there is more clarity on monsoons as there is always a threat
that food prices might go up if the monsoon fails significantly.
However most of areas in the country have seen either average or
above average rainfall in last one week and the overall deficiency
has come down except some areas of Gujarat and Maharashtra. We
believe monsoon would be good for the remaining part of the month
and a large part of deficiency seen in June could be compensated
for. But it is still too early to predict overall monsoon but there
is also news about the El-Nino effect weakening which could be a
significant positive for India. News: DOMESTIC MACRO: Indias trade
deficit rose to a 11 month high of $11.76 bn in June from $11.23 bn
in May and $11.28 bn in the same month last year, driven by a surge
in gold imports; exports rose 10.22% on year to $26.48 bn in June
and imports climbed 8.33% annually to $38.24 bn in the same month.
According to data from the Department of Industrial Policy and
Promotion, the foreign direct investment (FDI) flows into India
more than doubled to $3.60 bn in May, the highest in the last eight
months. Asian Development Bank (ADB) upgrades India's economic
growth forecast to 6.3% in 2015-16 on hopes of speedy reform
process, but retains growth forecast of 5.5% this year. The
headline Inflation (both CPI & WPI ) depicted declining trends
for the month of June. While headline WPI inflation for the month
of June eased by 61 bps to 5.43% y/y (May 2014: 6.01% y/y), the
headline CPI inflation eased remarkably by 97 bps to 7.31% y/y (May
2014: 8.28% y/y).
3. GLOBAL MACRO EURO Euro zones industrial production fell 1.1%
month-on-month in May, the biggest drop since September 2012, and
reversed the 0.7% rise in April. Euro zones trade balance stood at
a surplus of 15.4 bn euros in May, in line with the surplus in
April. UKs unemployment rate fell to 6.5% in the three months
through May, the lowest since the fourth quarter of 2008, from 6.6%
in the three months through April. United States US industrial
production rose 0.2% in June, compared to May's revised increase of
0.5%;capacity utilization came in at 79.1% in June, in line with
May. US retail sales rose 0.2% in June after an upwardly revised
0.5% advance in May. US Treasury Department reports a budget
surplus of $71bn in June, following a $130bndeficit in May. China
Chinas economy expanded 7.5% annually in Q2 2014 compared to 7.4%
in the previous quarter. China attracted FDI of $14.42bn in June,
up 0.2% from a year earlier. Indices: Date Sensex Midcap Auto
Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck 14/07/14
25,007 8,874 15,304 16,596 8,163 15,140 6,888 11,667 9,260 12,573
10,601 2,146 1,891 5,199 15/07/14 25,229 9,045 15,519 17,054 8,393
15,478 6,867 11,693 9,244 12,737 10,768 2,178 1,932 5,204 16/07/14
25,550 9,166 15,742 17,480 8,406 15,711 6,900 11,782 9,261 13,017
10,900 2,206 2,015 5,227 17/07/14 25,561 9,292 15,716 17,478 8,584
15,893 6,923 11,849 9,268 13,337 10,854 2,258 1,999 5,238 18/07/14
25,642 9,253 15,713 17,612 8,508 15,961 6,911 11,832 9,401 13,266
10,770 2,228 1,981 5,286 2.54% 4.27% 2.67% 6.12% 4.23% 5.42% 0.33%
1.42% 1.52% 5.51% 1.60% 3.82% 4.77% 1.66%
4. Commodities and Currency: Date USD GBP EURO YEN Crude (Rs.
per BBL) Gold (Rs. Per 10gms) 14/07/2014 60.01 102.72 81.60 59.18
6419 28235 15/07/2014 60.22 102.79 81.95 59.27 6419 27985
16/07/2014 60.19 103.14 81.66 59.19 6384 27808 17/07/2014 60.14
103.00 81.33 59.25 6451 27846 18/07/2014 60.33 103.18 81.58 59.54
6489 28085 -0.54% Rupee Depreciated -0.45% Rupee Depreciated 0.02%
Rupee Appreciated -0.60% Rupee Depreciated 1.09% -0.53% Debt: Tenor
Gilt Yield in % (Friday) Change in bps (Week) 1-Year 8.68 13 2-Year
8.51 5 5-Year 8.62 -3 10-Year 8.77 0
5. Varun Goel Jharna Agarwal Nupur Gupta Ridhdhi Chheda
Disclaimer The information and views presented here are prepared by
Karvy Private Wealth (a division of Karvy Stock Broking Limited) or
other Karvy Group companies. The information contained herein is
based on our analysis and upon sources that we consider reliable.
We, however, do not vouch for the accuracy or the completeness
thereof. This material is for personal information and we are not
responsible for any loss incurred based upon it. The investments
discussed or recommended here may not be suitable for all
investors. Investors must make their own investment decisions based
on their specific investment objectives and financial position and
using such independent advice, as they believe necessary. While
acting upon any information or analysis mentioned here, investors
may please note that neither Karvy nor any person connected with
any associated companies of Karvy accepts any liability arising
from the use of this information and views mentioned here. The
author, directors and other employees of Karvy and its affiliates
may hold long or short positions in the above- mentioned companies
from time to time. Every employee of Karvy and its associated
companies are required to disclose their individual stock holdings
and details of trades, if any, that they undertake. The team
rendering corporate analysis and investment recommendations are
restricted in purchasing/selling of shares or other securities till
such a time this recommendation has either been displayed or has
been forwarded to clients of Karvy. All employees are further
restricted to place orders only through Karvy Stock Broking Ltd.
The information given in this document on tax are for guidance
only, and should not be construed as tax advice. Investors are
advised to consult their respective tax advisers to understand the
specific tax incidence applicable to them. We also expect
significant changes in the tax laws once the new Direct Tax Code is
in force this could change the applicability and incidence of tax
on investments Karvy Private Wealth (A division of Karvy Stock
Broking Limited) operates from within India and is subject to
Indian regulations. Karvy Stock Broking Ltd. is a SEBI registered
stock broker, depository participant having its offices at: 702,
Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off
Bandra Kurla Complex, Mumbai 400 051 . (Registered office Address:
Karvy Stock Broking Limited, KARVY HOUSE, 46, Avenue 4, Street
No.1, Banjara Hills, Hyderabad 500 034) SEBI registration
Nos:NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE:
INB010770130, BSE(F&O): INF010770131,NCDEX(00236,
NSE(CDS):INE230770138, NSDL SEBI Registration No:
IN-DP-NSDL-247-2005, CSDL-SEBI Registration No:IN-DP-CSDL-305-2005,
PMS Registration No.: INP000001512
