A possible interest rate hike by the US Federal Reserve scheduled next week may increase the intensity of FII (foreign institutional investors) selling of domestic equities given that the domestic market enjoys significant overweight in EM portfolios.

In the last six years, the MSCI EM index has vastly underperformed its developed market counterpart in dollar terms, losing 20% of value as against more than 40% gains reported by the MSCI world index. MSCI India, on the other hand fared better reporting 31% gains in the period. Not surprisingly, It is estimated that currently FPIs have 250-300 basis points (bps) overweight on Indian market as against its 7%-8% weight in the MSCI EM index. At the market peak in January, these overweight stood in the range of 400-450 bps.

The latest bout of FPI selling, under which they have liquidated nearly $500 million worth of Indian shares in the last one week, indicate that at a time when fresh inflows are not making their way into the EM universe as a whole, India may see higher selling pressure as EM-focussed investors restructure their positioning. While comments form Fed Chair Yellen on December 2 when she cautioned against delaying a rate hike for too long, seems to have sparked this liquidation, FPIs as such have reduced their exposure to Indian shares by about $1.6 billion since November.

According to the foreign fund flow tracker report by Kotak Institutional Equities, which closely follows  inflow by listed funds into India and EM peers, the total listed fund outflow from India amounted to $0.8 billion in November even as most EM regions saw weak participation by FPIs. It added that South Korea and China were preferred over India in October and active funds brought down their India exposure by 0.8-1% in October.

According to the head of equities of a domestic broking house, the overweight ‘savoured’ by Indian market could turn into a risk if investors start considering other EM markets on concluding that both in currency and stock market decline terms, enough damage is done for that particular EM peer. “A general apathy towards EMs, more earnings downgrades and monetary policy stagnation are the key risks facing domestic market over the next six months,” he added.

Even as FY16 consensus earnings estimates have declined by 20% in the year so far, Indian market currently trades at one-year forward earnings of 14.9 times, a steep premium to equity benchmarks of peers like South Korea, China and Indonesia that currently command forward earnings of 10.8, 13.44 and 13.9 times respectively, show Bloomberg data.

JLR Nov-15 wholesale volumes were up ~24% YoY (5% MoM) to 51,021units (v/s est. 46,953 units). We estimate ~11% volume growth in FY16, implying a residual monthly rate of 46,995 units or 12% growth for FY16. Land Rover grew by ~19% YoY to 41,952 units (v/s est. 37,769 units), while Jaguar grew by ~47% YoY to 9,069 units (est. of 9,184 units).

In terms of regional retail sales performance, US volumes grew by ~52% YoY, Europe volumes were up by 68% YoY and UK volumes grew by 70% YoY. However, China volumes were down 22% YoY.

Jaguar’s retail volumes were up by 33% YoY, led by XE which did volumes of 3,953 units (launched only in UK, Europe and China), rest complete portfolio saw double digit de-growth. Jaguar portfolio saw growth of 33% YoY.

Land Rover’s retail volumes were up 26% YoY, with growth across portfolio except RR-Evoque. We estimate TTMT’s consolidated EPS to grow ~13% CAGR over FY15-18. The stock trades at 11.6x/8.7x FY16/FY17 consolidated EPS.

We maintain ‘buy’ with a target peice of R471 (FY17 SOTP-based) for ordinary shares and R329 for DVR (~30% discount to TP for ordinary shares).

Mandhana Industries has an exclusive licence agreement with Salman Khan’s non-governmental organisation ‘Being Human’.

Mandhana Industries share price soared as much as 11.65 per cent on Thursday after the Bombay High Court acquitted the Bollywood star Salman Khan of all charges in the 2002 hit-and-run case in which he was convicted and sentenced to five years imprisonment by a sessions court.

Mandhana Industries has an exclusive licence agreement with Salman Khan’s non-governmental organisation ‘Being Human’. The company is a textile and apparel company.

At 3.11 pm, the share price of Mandhana Industries were trading 2.83 per cent up at Rs 272.60. The scrip opened at Rs 266.50 and had touched a high and low of Rs 296 and Rs 266, respectively, in trade so far. Later, the share price of the company closed 2.41 per cent up at Rs 271.50

On September 28, 2002, Salman’s car had rammed into a bakery shop in suburban Bandra. One person was killed and four others were injured in the mishap.

In the past one year, the share price of Mandhana Industries fell 7.71 per cent to Rs 265.10 on December 9. Sensex fell 9.93 per cent during the same period.

The promoters holding in the company stood at 71.81 per cent while institutions and non-institutions held 5.75 per cent and 22.44 per cent respectively.

(With agency inputs)

The share price of InterGlobe Aviation surged 15 per cent from the day of listing on bourses on November 10. In the past one month, the scrip hit a high and low of Rs 1145.75 and Rs 878.45, respectively.

InterGlobe Aviation, which runs no-frills carrier IndiGo, completed its one month on Thursday (December 10) on stock exchanges from the date of listing. Shares of InterGlobe made a strong debut on the bourses on November 10 as it was listed at Rs 856 on BSE, reflecting a gain of 11.89 per cent as compared to the issue price. The issue price was set at Rs 765.

The share price of InterGlobe Aviation surged 15 per cent from the day of listing on bourses on November 10. In the past one month, the scrip hit a high and low of Rs 1145.75 and Rs 878.45, respectively.

On a month-to-date basis, the share price of Indigo corrected 9 per cent to Rs 1,010.50 till December 9. The scrip was at Rs 1,110.15 on November 30.

The company is one of the two profit-making domestic airlines with the other one being GoAir. At present, only two domestic scheduled carriers – Jet Airways and SpiceJet – are listed, while trading in long-grounded Kingfisher Airlines has been suspended for a long time.

Chandan Taparia, derivative and technical analyst, Anand Rathi Securities, said, “Shares of InterGlobe Aviation have recently broken its immediate support levels of Rs 1,030 due to some market pressure. If it will touch Rs 1,035 in coming days then it move towards Rs 1,100.”

For the financial year ended March 2015, InterGlobe Aviation reported net profit of Rs 1,295.58 crore, up 173 per cent, against Rs 474.44 crore in the previous financial year. The company registered net profit of Rs 987.3 crore in the financial year ended March 2013.

Total revenue of the company grew 25.16 per cent year-on-year to Rs 14,309.14 crore in 2014-15 against Rs 11,432.12 crore last year.

At current market price, shares of Indigo were trading at price-to-earnings ratio of 114.87 against industry P/E of 108.59. Experts have different views on the further movement of Indigo shares.

G Chokkalingam, founder of Equinomics Research, “Shares of Interglobe Aviation are fairly valued right now.”

Kishor P Ostwal, chairman and managing director, CNI Research, “I am not bullish on Interglobe Aviation shares. Aviation sector is heavily depends on government policies and international competition may squeeze margins going forward.”

The promoters holding in the company stood at 86.15 per cent while institutions and non-institutions held 5.85 per cent and 8 per cent respectively.

On December 10, the share price of the airline was trading 0.25 per cent up at Rs 1,013 in the morning trade.

Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw. NeoBiocon, a collaboration between Biocon Ltd and BR Shetty led UAE-based Neopharma, has partnered with Novartis Middle East FZE to market diabetes drugs Jalra and Jalra-M in the UAE. (Reuters)

Biocon share price gained as much as 1.63 per cent in the early trade on Thursday after the company informed BSE that NeoBiocon, a collaboration between Biocon Ltd and BR Shetty led UAE-based Neopharma, has partnered with Novartis Middle East FZE to market diabetes drugs Jalra and Jalra-M in the UAE.

At 10.01 am, the share price of Biocon was trading marginally up 0.16 per cent at Rs 463.30. The scrip opened at Rs 466.50 and had touched a high and low of Rs 470.10 and Rs 461.60, respectively, in trade so far.

The partnership will help NeoBiocon expand its product offerings in the metabolics segment and will immensely benefit diabetics in UAE, Biocon Ltd said in a statement on Wednesday.

NeoBiocon has received approvals from the Ministry of Health-UAE for marketing Jalra and Jalra-M in the country and the launch is scheduled for January 2016, it added.

For the quarter ended September 2015, Biocon posted a consolidated net profit of Rs 305.97 crore, up 199.82 per cent, against Rs 102.05 crore in the corresponding quarter a year ago.

In the past one year, the share price of Biocon gained 1.65 per cent to Rs 462.55 on December 9. Sensex fell 9.93 per cent during the same period.