Investor's Eye: Special - Q3FY2014 FMCG earnings preview, Q3FY2014 Banking earnings preview

 

Investor's Eye [January 06, 2014]  Sharekhan www.sharekhan.com

Summary of Contents   SHAREKHAN SPECIAL Q3FY2014 FMCG earnings preview  Volume growth moderates and margins under pressure in Q3 as well due to tough macro conditions. Be selective; prefer ITC among large-caps; Jyothy Labs, Tata Global and Marico among mid-caps based on valuations and a relatively better growth outlook. Among the soft coverage or not under coverage: Dabur and Britannia are relatively better placed than others in terms of the business outlook and valuations.   Q3FY2014 Banking earnings preview  A weak Q3 performance with estimates of a 17% decline in aggregate earnings of public sector banks (PSBs); expect a better performance from private banks, but the growth in their earnings is also likely to moderate compared with the previous quarters. Earnings would be dented by a subdued fee income, higher wage bill (provision for wage revision), and provisions on advances book and bond trading book (due to a spike in bond yields). Maintain cautious stance on PSBs owing to a weak earnings profile, asset quality risks and need for re-capitalisation. We continue to prefer private banks because of the better visibility of earnings and asset quality, and higher capitalisation. Preferred picks ICICI Bank, Axis Bank and Federal Bank. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Regards, The Sharekhan Research Team

 

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