Buying opportunity for bargain hunters
After three consecutive weeks of falling indices and loss of over 800 points in the Nifty the relentless slide came to a halt courtesy the 134-points rally on Friday. The week ended May 8 witnessed marginal gains for both the benchmark indices – Sensex and the Nifty. However FIIs continued to lighten their weight in Indian equities with another Rs 4,000 crore of selling. Further though curtailed the CNX Mid-cap and Small-cap indices lost over 1 per cent each for the week.By sector while most of the indices ended amidst gains, the Bank Nifty was down 3 per cent and the CNX PSU Bank Index down 5.5 per cent. While it largely seems like just a bout of profit-booking in private bank stocks, as their March quarter results did not throw up any negative surprises PSU Bank stocks witnessed selling pressure on fears of decline in asset quality with PNB’s result being a case in point.
This week we expect stock-specific activity to continue. Results continue to flow in and expect adjustment in stock valuations to the realities delivered in the March quarter results. Further, the Industrial Production (IIP) and Inflation data (both – CPI and WPI) will also be released which will add to the intra-week volatility.
Considering that the Indian market has cooled-off significantly from its life-time high in early March value hunters could look to grab onto opportunities available in the market. In the current scenario, we believe that IT and Pharma sectors could be good medium-to-long-term bets as we believe that a major part of the cross-currency headwinds have already played out. Auto is another sector where we believe investors can scout for opportunities. Select stocks in FMCG, Infrastructure (Cement, Roads, etc.) can also be considered.
Hitesh Agrawal, Head Research, Reliance Securities.
Recovery expected only in 2016
The industry comprising private vehicles (PVs), commercial vehicles (CVs) and two wheelers continues to remain in doldrums as rural demand is sluggish and inventory remains an area of concern. Depressed rural demand is counteract to strong urban demand. Going forward we expect recovery in 2015-16 as key triggers are in place for pick-up in demand. These include lower fuel prices, interest rate cuts, better sentiments and higher disposable income. We are hopeful of rural demand improving due to normal monsoon forecast. Our key picks in this sector are companies which are inclined towards domestic recovery and have a strong product range to capture changing consumer preferences. We highlight Maruti and Hero as our key picks to play domestic recovery. We remain neutral on Bajaj Auto as export business is expected to be under pressure; we are also wary of its performance in domestic two-wheelers and keep a watch on the success of its new launches. Furthermore, we like Motherson Sumi and Balkrishna Industries among auto-component players.
Strong performance ahead
Founded in 1999 Claris Lifesciences is a multi-business enterprise specializing in sterile injectables technology. Its array of therapies includes anesthesia, blood products, anti-infectives, and plasma volume expanders. The company’s plant is in Vasna, Ahmedabad. The company recorded strong growth in fourth quarter 2014. Currently 20 per cent of its sales are from USA. In future the US market is expected to be the strongest growth driver. New product launches will see volumes increasing in coming years. Intensifying growth in international markets, especially the regulated markets through launch of high-value products, organic growth through capacity expansion and introduction of new delivery systems are some of the positives of this company. The share is currently trading at P/E of 9.2x on 2015-16 estimated earnings and will trade at higher multiple in coming years.
Concerns over order execution remains
NIIT Technologies fourth quarter earnings for 2014-15 were above our estimates. Quarterly growth was led by the insurance, manufacturing and government business while BFS and transportation were weak. Dollar revenues from US market grew 2.1 per cent over the previous quarter which was above our estimate. The profitability margins were also better than expected due to productivity initiatives. The company reported a loss of Rs 17.5 crore with exceptional foreign exchange loss of Rs 80 crore. The loss was partially offset by lower tax expenses. We expect NIIT Tech to report steady revenue growth in coming years. However although the company is restructured its sales function and continues to win healthy orders there are concerns on execution of orders. Concerns on execution is clouded our future projections and resulted in HOLD rating.
World Brokers Day to be celebrated on June 9
With the aggressive advent of real estate portals, the average real estate broker is under threat of losing business to the ease and convenience available online to the metro home-buyer today. Realty Redefined is a young organization driven to empower this broker fraternity with tech-based options that would up their game.
The real estate market has shown tremendous growth in the last decade. While this provides great opportunity to the individual intermediary, there is a huge gap in the service expectation of the customer and what is provided by the typical broker. Increasingly, customers find the comfort of browsing through choices in the comfort of their homes, available online, more attractive.
Keeping this thing in mind, Nirav Gosalia, Harish Patel & Mayank Vora founded the company ‘Realty Redefined’ in 2008. Realty Redefined is set to become a platform that a vision to help evolve and organize the broker community. They believe in helping the brokers provide real value to their customers, and in turn earn respect along with revenue, i.e. transforming Brokers to Consultants.
Despite the size of the fraternity, the broker community is yet an unorganized work force, and has gone fairly unrecognized. As a first step to recognize and honour the role of the real estate broker, Realty Redefined is celebrating World Brokers Day on June 9th. The day would be celebrated annually to recognize brokers among the real estate industry and bring consciousness for a need to evolve as an organized and respected community.
One of the first products of Realty Redefined, to be unveiled on World Brorkers Day, is a real estate software solution called RSquare, which aims to make lives of real estate brokers more organized. This application will empower real estate agents and consultants with technology that helps offer a superior and simplified solution to their customers.
RSquare is an innovative platform for real estate brokers that provides them a suite of tools to maximize their conversions and revenue, build a strong brand and credibility and provide excellent service to their end users.
The application is extremely easy to use and the broker can access it via his mobile phone or his desktop. Through the pilot alone, RSquare has implemented and provided services to about 800+ customers till date, and managed 2 lacs+ properties with an implementation success of 92%.
Speaking about the rationale behind the event, Nirav Gosalia, Co-Founder, Realty Redefined, said, “As technology erupts and disrupts the existing fabric of any society, it becomes necessary for its stakeholders to update and upgrade themselves, redefine their role in the new framework. We at Realty Redefined believe that technology is an enabler and facilitator, to be judiciously used by all the stakeholders to offer a stronger value proposition and not an end in itself.”
Realty Redefined, established by three budding entrepreneurs, Harish Patel, Mayank Vora and Nirav Gosalia, is set to re-classify the structure of the real estate sector in India with its innovative tools for developers and the agent fraternity.
“Developed countries of the world have accepted technology and have ensured social and economic inclusion of all stakeholders. For instance, customer relationship management tool has been used by the brick-and-mortar real estate brokers in the US to service their clients and overcome the threats posed by the online portals. Their Indian counterparts must also take a cue from the developed world and gear up to reinvent themselves,” said Mayank Vora, another Co-Founder, Realty Redefined.
According to the third Co-Founder Harish Patel, “World Brokers Day will have a full day seminar with participation from real estate agents and attendance by the most respected names in the real estate industry. It is a step to recognize and organize this community, and the need to re-position them as `Consultants’ in the changing paradigm with advent of e-commerce.”
Apart from RSquare, Realty Redefined also has a product called RQube which is an ERP platform for developers to manage their entire project life cycle from lead generation to possession. It has various modules like lead, booking, purchase, engineering etc.