In the IT sector in India, Nomura prefers companies that provide revenue upside possibility with margin comfort and are available at reasonable valuations in the stock market
While the IT sector companies in India are performing well, a faltering US economy recovery could affect the sector adversely, according to Nomura Financial Advisory and Securities (India) Private Limited in its research note on prospects in the IT sector. The sector is also likely to lower its performance if the rupee appreciates materially against the US dollar from the current scenario.
Nomura’s assessment is that India’s tier-1 IT stocks have outperformed the Nifty by 35-80% YTD (year-to-date) driven by about 15% rupee depreciation, favourable market set-up for the export-led IT sector in a worsening domestic scenario and an improving US macro situation.
While hand-picking IT companies for the IT sector, Nomura prefers companies that provide revenue upside possibility with margin comfort and are available at reasonable valuations.
Nomura’s recommendations on individual stocks in the IT sector are given in the table below:
Growing household incomes, low penetration across several categories and expanding distribution network combine to make consumer one of the most attractive growth sectors in the medium term, says Nomura Equity Research in its research note
It is expected that margins will improve marginally year-on-year across the HPC (home and personal care) sub-sector of the consumer sector. For the sector, operating margins are likely to improve by 50 basis points, according to a research note from Nomura Financial Advisory and Securities (India) Private Limited. However, going into H2FY14F, it expects margins to come under pressure as rupee depreciation starts to hit companies with some lag. Overall, it expects some toning down of consensus margin expectations across the sector for FY14F.
Nomura expects price hikes will be likely to start to reflect in revenue growth, which should provide some comfort, particularly given recent rupee depreciation.
Growing household incomes, low penetration across several categories and expanding distribution network combine to make consumer one of the most attractive growth sectors in the medium term, says Nomura in its advice to investors in the consumer sector.
The comparative valuation for key players in the consumer sector is given in the table below:
The Central Mumbai District Consumer Disputes Redressal Forum has directed Tata Housing Development Company to refund Rs50,000 to Ghatkopar-based Suresh Mehta and pay him compensation of around Rs20,000. The Forum emphasised that a flat buyer cannot be charged extra for car parking space, calling it an ‘unfair trade practice’.
“Car parking area is the common area of the society. Therefore, the opponent (the developer) had no right to charge any amount for the sale of the parking space,” observed the Forum. It followed the Supreme Court judgement which held that a developer can only sell a flat and has no right to sell a parking space.