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“Ask and it will be given to you; seek and you will find; knock and the door will be opened to you. For everyone who asks receives; the one who seeks finds; and to the one who knocks, the door will be opened. Matthew 7:7-8

13 Oct 2016

STOCK MARKET- What to expect in Q2 FY 17 earnings season?+ Capital first will be in focus due to its NCD issue

With the earnings season round the corner market participants will be keenly watching stock specific performances and earnings' growth delivered by the large cap stocks. The Q2 earnings are expected to be better than the Q1 earnings for the index stocks. Market sources suggest the sales of diversified Nifty-50 companies can grow three per cent in the July-September quarter when compared with the year-ago period.

The important sectors where the growth in earnings can be seen are: domestic cyclicals like Automobiles and Cement. Earnings improvement is also expected in select Private Banks, Consumer Staples and NBFCs' space. Auto companies are also expected to deliver healthy growth in earnings this quarter.
Banks will remain in focus, as in previous quarter the earnings were marred by the AQR (Asset Quality Review) related issues, and accelerated provisioning affected the profitability for the sector in previous quarter. This quarter the story on provisioning front is expected to be repeated, although banks may reflect some bond gains, which will slightly improve the reported earnings. Another aspect that can boost profitability for banks is the reduction in cost of funds for banks.

Capital first

 Capital First’s debenture committee formed by the board of the directors has approved the allotment of rated, listed, redeemable Non-Convertible Debentures (NCD). The company has raised Rs 575 crore by issue of NCDs on a private placement basis. It has approved allotment of 575 NCDs having face value of Rs 10 lakh each. The NCDs will be listed on NSE.
On Monday, the share price of Capital First increased by 2.14 per cent on bourses and closed at Rs 757.75.
Capital First is a leading financial institution in India focused on providing debt financing to MSMEs and consumers. The founding theme of the company is financing India’s 30 million MSMEs and its emerging middle class, with a differentiated model, based on new technologies, which provide a large and unique opportunity. The Company has so far financed more than 2.25 million customers including more than 1 million self-employed individuals and MSMEs. The Company provides diversified product portfolio including MSME Loan Against Property, Home Loans, Business Loans, Consumer Durable Loans, Two Wheeler Loans, Personal Loans and User Car Loans. As of March 31, 2016, Capital First has more than Rs. 16,000 Crore Assets under Management (AUM) with Retail Financing business contributing 86% of the overall AUM. The Company has a strong distribution setup across 222 locations in India, with an employee base of over 1400 as on March 31, 2016.
By Lohit B 

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