India focused Portfolio Advisory - Exp of 40+years, Das Capital Management and Advisors

Arun Thirumalai

India focused Portfolio Advisory - Exp of 40+years

Das Capital Management and Advisors

Das Capital is a research boutique with an aim to continuously map and plan the investment needs of investors focused on India. We have a six member research team with a combined experience of over 40 years as a part of our investment wing. Our team assisted in the setup of Premji Investments, which was one of India’s first family offices focused to managing Mr.Azim Premji personal wealth. We also serve as a research team to two Indian private equity energy funds “Small is Beautiful” and “KSK Emerging India Energy Fund”.

Thematic (Sector/Industry)

For the period July 2017,  major Indian stock market indices BSE Sensex and NSE Nifty gave a USD return of 2% and 3% respectively. The Indices took a breather following an 18% return since January 2017. GST rollout on July 1, 2017, stalled the rally as investors were cautious about the possible impact of the impending event on various sectors of the economy in the short term.Among the sectoral indices, the Nifty FMCG, Metal and Pharma indices were the biggest gainers, each giving 8% INR return…

For the period July 2017,  major Indian stock market indices BSE Sensex and NSE Nifty gave a USD return of 2% and 3% respectively. The Indices took a breather following an 18% return since January 2017. GST rollout on July 1, 2017, stalled the rally as investors were cautious about the possible impact of the impending event on various sectors of the economy in the short term.Among the sectoral indices, the Nifty FMCG, Metal and Pharma indices were the biggest gainers, each giving 8% INR return…

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/558" target="_blank" data-smartkarma-citation="entities:558:1">HDFC Bank Limited (HDFCB IN)</a> appears to be taking on excessive credit to offset far worse credit metrics. It's bizarre, but it does happen. It reminds us of China about 10 years ago, when banks expanded loans at high rates, partly in order to push non-performing loan (NPL) ratios down.  The risk of doing this amidst a weakening overall economy is that it results in far higher NPLs and credit costs. This is what we are seeing with HDFC Bank, Asia’s darling bank.

HDFC Bank Limited (HDFCB IN) appears to be taking on excessive credit to offset far worse credit metrics. It's bizarre, but it does happen. It reminds us of China about 10 years ago, when banks expanded loans at high rates, partly in order to push non-performing loan (NPL) ratios down.  The risk of doing this amidst a weakening overall economy is that it results in far higher NPLs and credit costs. This is what we are seeing with HDFC Bank, Asia’s darling bank. 

Soaring Impairment Costs at HDFC Bank, More than Peers

Specialist in Indian Banking and Economic Research

Hemindra Hazari

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans from the overseas branches of banks, particularly from select new private sector banks having significant foreign ownership. While the growth in overseas NPAs is from a low base as compared with domestic NPAs, the quantum is not insignificant. Some of the banks adventurously ventured into overseas markets, but, it appears, ended up extending foreign currency loans to highly leveraged Indian companies, which may have resulted in significant contamination of their overseas portfolio and consequently a belated contraction of their overseas assets.

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans from the overseas branches of banks, particularly from select new private sector banks having significant foreign ownership. While the growth in overseas NPAs is from a low base as compared with domestic NPAs, the quantum is not insignificant. Some of the banks adventurously ventured into overseas markets, but, it appears, ended up extending foreign currency loans to highly leveraged Indian companies, which may have resulted in significant contamination of their overseas portfolio and consequently a belated contraction of their overseas assets.

Senior investment analyst

Pallavi Deshpande

SBI (State Bank of India) / Equity Bottom-Up

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, <a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India's (SBIN IN)</a>(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, State Bank Of India's (SBIN IN)(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

Rising net deferred tax assets (DTA) in a scenario of stagnant and depressed net profits is not a healthy sign as current years’ net profits get enhanced while sometime in the future the net DTA will get reversed impacting future net earnings. This trend is visible in Axis Bank and ICICI Bank and investors must exercise caution in interpreting financial statements on the future trajectory of earnings.Deferred tax assets and deferred tax liabilities are created on account of the difference…

Rising net deferred tax assets (DTA) in a scenario of stagnant and depressed net profits is not a healthy sign as current years’ net profits get enhanced while sometime in the future the net DTA will get reversed impacting future net earnings. This trend is visible in Axis Bank and ICICI Bank and investors must exercise caution in interpreting financial statements on the future trajectory of earnings.Deferred tax assets and deferred tax liabilities are created on account of the difference…

Rising Deferred Tax Asset - Not a Healthy Sign

India

State Bank of India provides a wide range of banking and financial services to corporate, institutional, commercial, agricultural, industrial and individual customers throughout India.  The Bank also provides international banking to its Indian customers and has operations in other countries.

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State Bank of India (SBID LI)

Indian Markets- Monthly Update-July 2017

For the period July 2017, major Indian stock market indices BSE Sensex and NSE Nifty gave a USD return of 2% and 3% respectively. The Indices took...

Das Capital Management and Advisors

Soaring Impairment Costs at HDFC Bank, More than Peers

HDFC Bank Limited (HDFCB IN) appears to be taking on excessive credit to offset far worse credit metrics. It's bizarre, but it does happen. It...

Daniel Tabbush

Chickens Abroad Come Home to Roost

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans...

Hemindra Hazari

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of...

Pallavi Deshpande

Rising Deferred Tax Asset - Not a Healthy Sign

Rising net deferred tax assets (DTA) in a scenario of stagnant and depressed net profits is not a healthy sign as current years’ net profits get...

Hemindra Hazari

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