Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Cross Asset Strategy

<h2><strong>India (neutral); bull and bear factors remain finely balanced before election</strong></h2><p>The deterioration in India’s macro-economic ratios has continued apace with further rises in energy prices compounded by the fall in the value of the <a href="https://www.smartkarma.com/entities/22832" target="_blank" data-smartkarma-citation="entities:22832:1">INR (USDINR CURNCY)</a>. The most pronounced deterioration has occurred in the fiscal deficit which now stands at 6.5% or 7% and rising, if the regional deficits are fully accounted for, compared with an average of 5.5% during the 2009 to 2013 period with government debt standing at 70% of GDP.</p><p>The current account deficit has also widened with forecasts up to 2.8% of GDP for the fiscal year ending in March 2019, but this still compares favourably with just under 5% recorded in 2013, whilst the current core CPI inflation rate of around 5.8% is significantly below the 10.1% average recorded between 2009 and 2013. The perception that the RBI is behind the curve in terms of monetary tightening, will begin to dissipate if UST yields and oil prices continue to fall.</p>

India (neutral); bull and bear factors remain finely balanced before electionThe deterioration in India’s macro-economic ratios has continued apace with further rises in energy prices compounded by the fall in the value of the INR (USDINR CURNCY). The most pronounced deterioration has occurred in the fiscal deficit which now stands at 6.5% or 7% and rising, if the regional deficits are fully accounted for, compared with an average of 5.5% during the 2009 to 2013 period with government debt standing at 70% of GDP.The current account deficit has also widened with forecasts up to 2.8% of GDP for the fiscal year ending in March 2019, but this still compares favourably with just under 5% recorded in 2013, whilst the current core CPI inflation rate of around 5.8% is significantly below the 10.1% average recorded between 2009 and 2013. The perception that the RBI is behind the curve in terms of monetary tightening, will begin to dissipate if UST yields and oil prices continue to fall.

Asian Equity Markets (Ex-China) Overview; Korea, Taiwan and India

India - Politics, Industrials, IT and Large Caps, EMAlpha

Pankaj Sharma

India - Politics, Industrials, IT and Large Caps

Thematic (Sector/Industry)

<p>After the Indian judiciary denied relief to power firms from RBI’s NPA deadline, it has become much more likely that the lenders will start insolvency proceedings against defaulters. But, this is unlikely to be smooth for banks and of course, the troubled power companies will have to suffer. While it is possible that most of these banks don't yet know the true extent of NPA in power sector problem and have not provided for potential losses, there are several power companies which will have uncertain future on the projects which are stuck. While this entire process will bring considerable pain to these stakeholders, it could also be good for the companies which have sector expertise and are interested in buying assets at an attractive price. </p>

After the Indian judiciary denied relief to power firms from RBI’s NPA deadline, it has become much more likely that the lenders will start insolvency proceedings against defaulters. But, this is unlikely to be smooth for banks and of course, the troubled power companies will have to suffer. While it is possible that most of these banks don't yet know the true extent of NPA in power sector problem and have not provided for potential losses, there are several power companies which will have uncertain future on the projects which are stuck. While this entire process will bring considerable pain to these stakeholders, it could also be good for the companies which have sector expertise and are interested in buying assets at an attractive price. 

India Power Sector: The End Game Has Just Begun and It Will Be Painful for Many

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Equity Bottom-Up

Bharat Coking Coal Limited (BCCL) / Equity Bottom-Up

Bharat Coking Coal Limited (BCCL) (7535956Z IN)

<ul>
<li>India declared coking coal a critical mineral in January 2026 as BCCL completed its IPO, while imports climbed to 59.98 million tonnes in 2025-26.</li>
<li>With 95% of steel sector coking coal demand met through imports, any supply shock/ price-spike directly compresses margins for Indian Players, which are collectively targeting 70 MTPA of additional capacity.</li>
<li>BCCL's washery expansion from 13.65 MTPA to 27 MTPA, and a government-mandated target of 40 MT of domestic washed coking coal by FY30 create a rare supply-side inflection point.</li>
</ul>


India declared coking coal a critical mineral in January 2026 as BCCL completed its IPO, while imports climbed to 59.98 million tonnes in 2025-26.
With 95% of steel sector coking coal demand met through imports, any supply shock/ price-spike directly compresses margins for Indian Players, which are collectively targeting 70 MTPA of additional capacity.
BCCL's washery expansion from 13.65 MTPA to 27 MTPA, and a government-mandated target of 40 MT of domestic washed coking coal by FY30 create a rare supply-side inflection point.


India's Steel Supercycle Proxy: Bharat Coking Coal, The Monopoly

Equity Analyst, LightStream Research

Chacko Jacob

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p>The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and <a href="https://www.smartkarma.com/entities/21125" target="_blank" data-smartkarma-citation="entities:21125:1">ArcelorMittal (MT NA)</a> after finding them ineligible under revised bankruptcy laws. Essar Steel owes over INR 450bn to its lenders comprising about 22 banks. We take a quick look at the Company and the potential bidders in round two.</p><h2><strong>The Background</strong></h2><p>Essar Steel is an integrated steel producer with an annual capacity of 10MT that was established by the Ruia family…</p>

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and ArcelorMittal (MT NA) after finding them ineligible under revised bankruptcy laws. Essar Steel owes over INR 450bn to its lenders comprising about 22 banks. We take a quick look at the Company and the potential bidders in round two.The BackgroundEssar Steel is an integrated steel producer with an annual capacity of 10MT that was established by the Ruia family…

Essar Steel: Liquidation Looms Large as Bidding Forced into Round Two

Specialist in Indian Banking and Economic Research

Hemindra Hazari

<p>State Bank of India, India’s largest bank by assets and the government’s premier bank,  <a href="https://www.bloombergquint.com/business/2018/02/09/sbi-posts-surprise-loss-as-provisions-surge-treasury-income-falls" target="_blank">shocked</a> the market by reporting a 3QFY2018 loss of Rs 24.2 bn as compared with the consensus analysts’ estimate of a profit of Rs 20.5 bn. Worse, the bank reported that it had mis-reported its FY2017 accounts; its net profits should have been lower by 36% and its gross non-performing assets (NPAs) higher by 21%. Its losses for 3QFY2018 would have been higher as the bank created a deferred tax asset of Rs 22.8 bn effectively lowering its losses by that amount. The future appears bleak for the bank as investors should expect a large component of its restructured standard loans to become NPAs which should increase credit costs. Retail loans which appear healthy may cause further problems for the banking industry as the economy continues to stagnate.</p>

State Bank of India, India’s largest bank by assets and the government’s premier bank,  shocked the market by reporting a 3QFY2018 loss of Rs 24.2 bn as compared with the consensus analysts’ estimate of a profit of Rs 20.5 bn. Worse, the bank reported that it had mis-reported its FY2017 accounts; its net profits should have been lower by 36% and its gross non-performing assets (NPAs) higher by 21%. Its losses for 3QFY2018 would have been higher as the bank created a deferred tax asset of Rs 22.8 bn effectively lowering its losses by that amount. The future appears bleak for the bank as investors should expect a large component of its restructured standard loans to become NPAs which should increase credit costs. Retail loans which appear healthy may cause further problems for the banking industry as the economy continues to stagnate.

India

Jindal Steel Limited manufactures steel products. The Company offers steel rails, parallel flange beams and columns, angles and channels, plates, and coils, as well as engages in the power, mining, manufacturing, and infrastructure construction businesses. Jindal Steel serves customers worldwide.

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Jindal Steel (JINDALST IN)

Asian Equity Markets (Ex-China) Overview; Korea, Taiwan and India

India (neutral); bull and bear factors remain finely balanced before electionThe deterioration in India’s macro-economic ratios has continued apace...

John-Paul Smith

India Power Sector: The End Game Has Just Begun and It Will Be Painful for Many

After the Indian judiciary denied relief to power firms from RBI’s NPA deadline, it has become much more likely that the lenders will start...

Pankaj Sharma

India's Steel Supercycle Proxy: Bharat Coking Coal, The Monopoly

India's declaration of coking coal as a critical mineral and increased imports pose challenges for the steel sector, impacting margins and...

Nimish Maheshwari

Essar Steel: Liquidation Looms Large as Bidding Forced into Round Two

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and...

Chacko Jacob

SBI - An Elephant in Distress

State Bank of India, India’s largest bank by assets and the government’s premier bank, shocked the market by reporting a 3QFY2018 loss of Rs 24.2...

Hemindra Hazari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asian Equity Markets (Ex-China) Overview; Korea, Taiwan and India

India (neutral); bull and bear factors remain finely balanced before electionThe deterioration in India’s macro-economic ratios has continued apace...

John-Paul Smith

India Power Sector: The End Game Has Just Begun and It Will Be Painful for Many

After the Indian judiciary denied relief to power firms from RBI’s NPA deadline, it has become much more likely that the lenders will start...

Pankaj Sharma

India's Steel Supercycle Proxy: Bharat Coking Coal, The Monopoly

​India's declaration of coking coal as a critical mineral and increased imports pose challenges for the steel sector, impacting margins and...

Nimish Maheshwari

Essar Steel: Liquidation Looms Large as Bidding Forced into Round Two

The wait for Essar Steel’s lenders only got longer as the Consortium of Creditors that replaced its board rejected bids from Numetal and...

Chacko Jacob

SBI - An Elephant in Distress

State Bank of India, India’s largest bank by assets and the government’s premier bank, shocked the market by reporting a 3QFY2018 loss of Rs 24.2...

Hemindra Hazari

India's declaration of coking coal as a critical mineral and increased imports pose challenges for the steel sector, impacting margins and...