advice for the wise april'11
DESCRIPTION
The month of March has seen the positive sentiments to the Indian Equity markets and to a smaller extent to the Indian Debt markets.TRANSCRIPT
ADVICE for the WISE
Newsletter –April’11
2
Economic Update 4
Equity Outlook 8
Debt Outlook 13
Forex 15
Commodities 16
Index Page No.
Real Estate 19
Dear Investor,
The month of March has seen the return of the positive sentiments tothe Indian Equity markets and to a smaller extent to Indian Debtmarkets. FIIs poured money into Indian equities thus helping the indicesto decisively break out of the range of the earlier months. Part of thisrally is genuine catching up of the valuations in light of expected results.Some other factors that contributed to the sentiment were lack of majornegative news on the 2G scam investigation and relatively containedinflation levels. At the current level, the equity markets seem fairlypriced. Any quick run-up from here would enter the overvaluedterritory. As of now, we continue to recommend investing into Indianequities.The fortunes of different sectors changed quite rapidly in the last fewmonths. Banking which went through a rough patch in December lastyear is back to being a favored sector. Real estate showed some signs ofrevival last year but has lost steam again owing to corporate governanceconcerns. FMCG had performed quite well in the recent months whereasinfrastructure and cyclical sectors like metals lagged behind. Goingforward we believe that equity portfolios can be altered to include moreaggressive sectors such as metals and infrastructure. In the comingmonths defensive sectors like FMCG and Pharma may not deliver verygood returns.The liquidity crunch of last month has now eased partially. The yieldshave stayed steady or come down a little. Fixed deposit rates seem tohave peaked as some banks have started to cut the FD rates. Most ofthis indicates that the debt investment returns have hit their maximumand could well be on their way down. For clients looking to invest intodebt it is advisable to lock in the higher rates/yields available now.
Risk taking investors can evaluate private equity as an interestingand sufficiently diversified investment option. It also has theadditional positive of enforcing a long term outlook which is oftenlacking in public equity investments that allow entry and exit atwill. Private Equity can be thought of as an aggressive play on Indiagrowth story. This is because in a high growth environment, notonly do several small companies do well to deliver supernormalreturns to early investors, the downside risk is also reducedsignificantly for the suboptimal investment choices.When markets show some positive momentum, investors oftenworry that they might buy into an overvalued market. On the otherhand many times investors keep waiting on the sidelines for thecorrection that never happens. Principal protected structuredproducts can provide a way out of this by ensuring that themaximum downside remains at zero while the participation in theupside is maintained and even enhanced. Often some degree ofinnovation in these products can allow an investor to take a morespecific view on the market movement – thus enablingdiversification and enhancement of returns for most outcomes ofmarket levels in future.
3“Advisory services are provided through Karvy Stock Broking Ltd. (PMS) having SEBI Registration No: INP000001512. Investments are subject to market risks. Please read the disclaimer on slide no.23”
Change over last month
As on Mar 31st 2011
Equity markets
Debt markets
Commodity markets
Forex
markets
Change over last year
* Indicates SBI one-year FD
19,4455,8331,3259,755
7.98% 9.25%8.25%
4,27520,760
118.6
44.6582.86
9.1%9.4%
(0.1%)(8.2%)
(2 bps)2.4 bps
0 bps
2.4%(0.2%)
4%
1.2%(1.3%)
10.9%11.1%13.4%
(12.0%)
13 bps4.25 bps225 bps
33.6%27.4%
46%
(0.4%)(11.9%)
BSE SensexS&P NiftyS&P 500 Nikkei 225
10-yr G-Sec YieldCall MarketsFixed Deposit*
RICI IndexGold (`/10gm)Crude Oil ($/bbl)
Rupee/DollarYen/Dollar
4
10 yr Gsec
Gold
70
80
90
100
110
120
130
Ma
r-10
Apr
-10
Ma
y-1
0
Jun
-10
Jul-
10
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan
-11
Sensex NiftyS&P 500 Nikkei 225
6.8
7.3
7.8
8.3
8.8
15000
16000
17000
18000
19000
20000
21000
22000
42
43
44
45
46
47
48
Ma
r-1
0
Ap
r-1
0
Ma
y-…
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb
-11
Ma
r-1
1
`/$
5
US
Europe
Japan
Emerging economies
• The HSBC China Manufacturing Purchasing Managers Index, a gauge ofnationwide manufacturing activity, remained almost flat at 51.8 in Mar from51.7 in Feb.
• Chinese economy is expected to slow down to grow at 9.6% in 2011.The retailsales rose 15.8% in the first two months of 2011 which was 3.3% lower thanDecember owing to the decline in consumer confidence in recent months.
• The Conference Board Consumer Confidence Index, which had increased inFebruary, declined in March. The Index now stands at 63.4 down from 72 inFebruary. This is due to consumers short term outlook being less favorablethan in February .
• US m-o-m unemployment rate drops to 8.8 per cent in Mar 11.
• Euro-zone PMI declined to 57.6 in March, down from a four-and-a-half yearhigh of 58.2 in Feb 11. All countries saw a slower pace of growth than inFebruary, but France and Germany continued to see strong increase inmanufacturing and services-sector output.
• Unemployment rate in the Euro zone at 9.9% in Feb 11, compared to 10% inJan 11 .
• The Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonallyadjusted 46.4 in March, the lowest since April 2009, down from February’s52.9, owing to the disrupted supply chains and production operations post themassive earth-quake and Tsunami
• Japan’s unemployment rate decreased to 4.6% in Feb 11 from 4.9% in Jan 11
6
• The GDP growth rate for Q2 FY11 came in at 8.9%backed by a strong growth in services andagricultural output.
• The agriculture sector, which accounts for nearly17% of GDP, rose 4.4% and this offset themoderation manufacturing sector growth, whereproduction went up by 9.8%. The services sectortoo grew at 9.7% during July-September this year,led mainly by finance and real estate as well astrade, hotels, transport and communication
• The Finance ministry is targeting FY11 growth at~8.50% - 8.75% which may be revised upwards. Webelieve the current target is sustainable as weexpect manufacturing and service sectors tocontinue to drive growth in the next few quarters.
IIP monthly data
GDP growth
• Industrial output as measured by the Index ofIndustrial Production (IIP) grew by 3.7% (y-o-y) inJanuary ‘11 as compared to an upward revised 2.7%in December ’10.
• Capital good output contracted 18.6 percentcompared with an expansion of 57.9 percent in theyear ago period.
• We believe that monthly indicators are not a veryefficient way of indicating growth and the lowernumbers could also be attributed to higher baseeffect. But, the growth will eventually moderate out. 4
5
6
7
8
9
10
FY09 (Q3) FY09 (Q4) FY10 (Q1) FY10(Q2) FY10(Q3) FY10(Q4) FY11(Q1) FY11(Q2)
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%20.0%
• Bank credit growth remained stable at 23.2% in themonth of February while Deposits grew by 16.4%compared to 15.9% in January 2011.
• Growth of credit demand and tight liquidity had putpressure on the banks to raise their deposit rates,.Though we see liquidity concerns easing, highinflationary pressure may lead the RBI to increaserates further.
• We expect credit growth to settle at ~20% levels inthe coming quarters on the back of improvingbusiness confidence and decline in risk aversion onthe part of banks.
• Inflation as measured by WPI increasedmarginally and stood at 8.31% (y-o-y) for themonth of February -11 as compared to 8.23%during January 11. Rising oil prices and highfood prices have led to high inflation in themonth. These figures are based on the newbase year and WPI list.
• We expect WPI inflation numbers to moderatein m-o-m inflation numbers due to the expecteddecrease in food inflation and the monetarytightening stance by RBI, but increasing fuelprices may be a cause of worry.
Growth in credit & deposits of SCBs
7
Wholesale Price Index
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11
Bank Credit Aggregate Deposits
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Feb
-10
Mar
-10
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-10
Sep
-10
Oct
-10
No
v-1
0
Dec
-10
Jan
-11
Feb
-11
8
March turned out to be a good month for Indian equity markets. In the first two months of CY11, Nifty ended on a negative note with an
outflow of 9000 crores by FII. This changed in the month of March with a gain 9.4%. FIIs returned in the last week of March with almost
9000 cr invested in 7 days. The FII buying was seen across quality large cap names and a few mid-cap ideas.
On the macro economic front, consumer demand continues to hold up quite well across both rural and urban India. March witnessed
strong auto sales numbers growth. All manufacturers’ sales surpassed expectations as retail demand continues to remain buoyant with
two wheeler and four wheeler sales numbers well ahead of expectations.
The sector which has seen the most difficult times last year was infrastructure. There were various issues in terms of environmental
clearances, lack of new orders, land acquisition and commodity prices. There seems to be some movement on the first two issues. Last
month saw several coal mine development plans being cleared by the environment ministry. A few commodity green field projects also
got clearances. There was a revival in order announcements by key infrastructure vendors like PGCIL which announced its largest ever
Transmission & Distribution order of 5000 crores. NHAI is also expected to announce highway development orders to the tune of 2000
crores in this quarter. This momentum, if continued, will provide a much needed fillip to infrastructure development of the country and
would be a big positive for the infrastructure stocks. Concerns related to commodity prices and interest rates have already been priced
in by the market. The government also seems keen to press ahead with key reforms and introduced GST and Pension Reform bill in
parliament.
Crude continues to be a cause of concern with Nymex crude touching 109$/barrel driven by continued unrest in Middle East and North
Africa. Fighting continues in Libya with no side emerging as a clear winner. It would be prudent to assume that Libyan supplies would be
disrupted for some time. Saudi Arabia has increased supplies to make up for that. However, concerns remain on the unrest in Yemen
and Bahrain spreading to Saudi Arabia which is the world’s largest crude producer.
9
• After pulling out ` 9,400 Cr. in this year (Jan & Feb) FIIsinvested `6898 Cr. in the Indian markets in the month ofMarch’11. High growth prospects in the Indian market are adriver for these investments.
• Mutual Funds invested around ` 459 Cr. in the month ofFebruary.
FII & MF data
Food price inflation in mid-March again touched the double digit levels due to firm price trend seen in protein rich items like milk,
cereals and fish. We now expect WPI inflation in March to cross 8%. We would expect inflation to stay at elevated levels led by firm
food price trends and high commodity prices and average around 7% in Fy12. RBI is expected to announce its forecast for full year
inflation in the May review. We would expect a further hike of 25bps when RBI next meets with a total hike of 50 to 100 bps for FY12.
This view would change if there is any big spike in retail fuel prices led by continued upside to global crude prices.
The market seems to be trading at reasonable valuations of around 16 times based on FY12 earnings. Further clarity on valuations will
emerge once the Q4 results start coming in from second week on April. We believe that in Q4 FY11, we would witness steady earnings
growth of 17-18% for Nifty companies. Similar to the scenario in Q3FY11, manufacturing sector might face some earnings
disappointments due to high commodity prices and interest rates, but that should get compensated by the increase in earnings of
Metal companies. We would continue to maintain a strict vigil on crude prices and inflationary expectations in the economy. We like
sectors with earnings visibility, growth, superior capital efficiency of the businesses & good corporate governance and have maintained
overweight position on Financials, Metals, Healthcare & Capital Goods.
-15000.0
-10000.0
-5000.0
0.0
5000.0
10000.0
15000.0
20000.0
25000.0FII MF
10
Sector Stance Remarks
Healthcare Overweight
We believe in a large sized opportunity presented by Pharma sector in India. India’s strength in generics
is difficult to replicate due to quality and quantity of available skilled manpower. With the developed
world keen to cut healthcare costs, and a vast pipeline of drugs going off-patent, Indian pharma players
are at the cusp of rapid growth. Here, we have taken exposure to medium-sized, non-index ideas while
trying to play on the opportunity in Generics and CRAMS.
E&C Equalweight
The USD 1 trillion Infra opportunity is hard to ignore. Here, we have carefully taken Power sector as our
dominant bet over other sub sectors such as ports, roads and telecom infrastructure, because of
favorable economics under PPP model. Within power, we focus on the engineering companies over
utilities, T&D and other infrastructure owners because of their superior profitability and better
competitive dynamics.
BFSI Overweight
Financial sector is undeniably the lubricant for economic growth. Whether the growth comes from
consumption or investments, credit growth is inevitable. Being a well regulated sector, BFSI in India has
good asset quality and capital adequacy ratios. This, when juxtaposed to the growth opportunity
available makes an attractive long term opportunity.
FMCG Neutral
The exposure is in “discretionary consumption” beneficiaries such as Paints and branded food, as the
growth in this segment will disproportionately higher vis-à-vis the increase in disposable incomes. This
also provides a defensive posture to the portfolio.
Telecom Underweight
The regulatory hurdles, competitive pressures and leverage prevent any return to high rofitability levels
in the short to medium term. The huge capex incurred in the rollout of 3G services will put further
stress on the already stretched balance sheets. Remain cautious on Sector’s prospects.
11
Sector Stance Remarks
IT/ITES Equalweight
Robust volume growth led by some uptick in pricing makes IT an attractive investment. Market
share gains led by deeper and wider expansion of global delivery model will drive earnings
growth. Best played through Tier I stocks.
Automobiles Overweight
Demand outlook remains very robust with strong earnings growth despite raw material price hikes
and raging competition. We are more bullish on commercial vehicle and agricultural vehicles
segment due to lesser competition and higher pricing power.
Energy Underweight
Through a single company, we have taken a large-sized exposure to refinery and natural gas
exploration sector. The regulatory cap on RoE does not allow a vast value creation opportunity in
the infrastructure owning companies. We have also purposely tried to stay away from PSUs, due
to issues of cross subsidization distorting the underlying economics of oil exploration and refinery
businesses.
Metals Equal weight
Indian metal companies will benefit from global upturn in demand. Commodity prices have
moved up significantly as recovery takes place in US and Europe. Positive on the producers of
Steel, Copper and Aluminium.
Cement UnderweightCement demand will certainly grow over the next three years. But the issue is on the supply side.
We do see an oversupply situation for the next 3-4 quarters.
Power Utilities Underweight
We like the growth prospects of power sector but believe that value will be created by
engineering services providers. Merchant power rates have been sliding downwards and coal
prices have been on the way up putting pressure on return ratios.
Basic Theme
A diversified portfolio of stocks that seeks Alpha through superior stock selection. The Portfolio Management adopts a comprehensiveapproach and invests across sectors, investment themes and market capitalization categories.
Portfolio Details
Placement fee 2%Exit Load Nil (Full management fee to be levied if redeemed before 1 yr)
Management Fee2.5% for investments below Rs. 1 Cr.
2% for investments above Rs. 1 Cr.
NIL
Profit Share NIL NIL 15% of all gains
Top 10 Holdings
Comparatives 3 Month Since Inception
Alpha Portfolio -6.4% 17.0%
S&P CNX Nifty -4.9% 11.7%
Sector Allocation Performance (as on 31st Mar 2011)
Absolute Returns (%)
-6.4%
17.0%
-4.9%
11.7%
-10%
-5%
0%
5%
10%
15%
20%
3M Since Inception (30/11/09)
Alpha Portfolio Nifty
12
Reliance Industries Ltd. 8.5
Infosys Technologies Ltd. 6.8
HDFC 6.4
Punjab National Bank 5.9
State Bank of India 5.8
Titan Industries Ltd. 5.3
Nestle India Ltd. 5.1
Larsen & Toubro Ltd. 5.1
Bharat Heavy Electricals Ltd. 4.9
Page Industries 4.5
Top 10 Stock Concentration 58.3
BFSI26.5%
IT6.8%
Capital Goods13.0%Pharma
7.9%
FMCG18.3%
Others11.0%
Energy8.5%
Metals7.9%
13
• The benchmark 10 yr G-sec yield decreasedmarginally from 8.0% in the month of February‘11 to close at around 7.98% in February ‘11.
• With no respite from the high inflation in spiteof monetary tightening, it is possible that RBImay take a stand that the monetary tightening isunlikely to bring down food inflation in a directmanner.
10-yr G-sec yield
Yield curve
• We expect yields at the longer end of the yieldcurve to remain stable. High inflation, monetarytightening and rising credit growth will keep theyields at the longer end range bound.
• After the rate hike by RBI in Mar, the 10 year GSec yields are trading around 8.0% from 8.15levels in Jan 2011. If the inflation continues to behigh, there may be another increase in theinterest rates by RBI.
(%)
6.8
7
7.2
7.4
7.6
7.8
8
8.2
8.4
6.5
7.0
7.5
8.0
8.5
9.0
0.0
1.0
2.1
3.1
4.1
5.1
6.1
7.1
8.2
9.2
10.2
11.2
12.2
13.2
14.2
15.3
16.3
17.3
18.3
19.3
OutlookCategory Details
Long Tenure Debt
With tight liquidity and inflationary pressure being high, weexpect more rate hikes in the current year. As the inflationarypressure begins to settle down, these may be attractiveinvestments but currently, we would recommend staying out ofthe longer term investments.
Some AA and select A rated securities are very attractive atthe current yields. A similar trend can be seen in the FixedDeposits also. Tight liquidity in the system has alsocontributed to widening of the spreads making entry atcurrent levels attractive.
14
We recommend short term bond funds with a 6-12 monthinvestment horizon as we expect them to deliver superiorreturns due to high YTM. We have seen the short term yieldsharden due to reduced liquidity in the market andconsecutive rate hikes prompted by inflationary pressures.Hence, Short term bond funds and FMPs provide aninteresting investment option.
Short Tenure Debt
Credit
15
•The rupee appreciated against all the currencies except the euro.
•The appreciation was on the back of improved performance of the Indian equity markets and inflow of funds in to the domestic markets
•Going forward, the rupee will be helped by the narrowing of the current account deficit and the inflow of funds into the domestic markets. However rising oil prices remains a concern.
Rupee movement vis-à-vis other currencies (M-o-M) Trade balance and export-import data
• Exports for the month of February increased by 49.7%(y-o-y) while imports increased by 21.2% over last year.The trade deficit increased to USD 8.1 bn.
• Capital account balance continues to be positive throughFY11 and stands at `241293 Cr. for the Q1 – Q3.
• We expect the capital account balance to remain positiveas higher interest rates would make investment in theIndian markets attractive hence drawing investments intothe market.
-15000
-10000
-5000
0
-20
0
20
40
60
80Export Import Trade Balance (mn $)
0
20000
40000
60000
80000
100000
120000
140000
FY 09 (Q4) FY 10 (Q1) FY 10 (Q2) FY 10 (Q3) FY 10 (Q4) FY 11 (Q1) FY 11 (Q2) FY 11 (Q3)
Capital Account Balance
16
Precious
Metals
Oil & Gas
Gold prices continue to remain stable amid demand from
emerging economies including China, where the investment
demand growth was strongest last year. The global political
uncertainty and growing Middle East tensions shall continue to
support prices. Further, the seasonal demand during Akshaya
Tritiya in India is likely to support prices. Nevertheless, we do
not expect any sharp spikes in the yellow metal in the near
term; however the falling dollar is a concern and shall push the
metal prices higher.
Although the Middle East status quo remains, crude oil prices
found support from the renewed demand for conventional
energy after the Japanese Nuclear fiasco. The difference
between WTI and Brent continues to wide. Crude is expected
to remain stable in the near term amid declining dollar aiding
its rise.
Crude
Gold
15000
16000
17000
18000
19000
20000
21000
22000
Mar
-10
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
Dec
-10
Jan
-11
Feb
-11
Mar
-11
60
70
80
90
100
110
120
Mar
10
Ap
r 1
0
May
10
Jun
10
Jul 1
0
Au
g 1
0
Sep
10
Oct
10
No
v 1
0
Dec
10
Jan
11
Feb
11
Mar
11
17
Tenor 36/40 months
Issuer Karvy Financial Services Limited
Reference Index S&P CNX Nifty Index
Principal Protection 100%
Initial Fixing Level Official Closing level of S&P CNX Nifty Index as on DDA
Final Fixing Level Average of Official Closing Level of S&P CNX Nifty Index as on 34M, 35M and 36M
Exit Nifty Level Official Closing level of S&P CNX Nifty Index as on DDA +36M
Participation Rate 200%
Knockout Level 150% of Initial Fixing Level
Knockout Rebate 30%
Payoff2 * Max {0, (Final Fixing Level / Initial Fixing Level) -1}, if Knockout event is nottriggered
Overview
• Aditya Birla has launched a private equity fund targeting
innovation themed growth capital investments within sunrise
sectors – Lifestyle, Lifeskills and Education, Lifecare and
Applied Technologies.
Attractiveness
• We believe that the sectors that they have selected are
attractive growing annually at 20% plus supported by benefits
of higher disposable income and improving infrastructure in
the country.
• The managers have had a successful track record in similar
sectors and have delivered consistent returns. Operational
value addition and domain knowledge would be the drivers of
IRR.
• Based on the Investment team’s extensive business network in
overweight sectors 60 high quality early stage proposals have
been received over the last 12 months
Product Features
• Fund size: Rs. 350 Cr. + green shoe option of Rs. 150 Cr.
• Sponsor Commitment: 10%
• Fund tenure: 6 years with an option of a 1 year extension
• Commitment Period: 30 Months from date of initial closing
• Minimum Commitment: 1,000,000
• Indicative Draw-down:
INR 10 lakh 100%
INR 15 lakh–45 lakh Higher of 20% of commitment or
INR 7.5 lakh
> INR 45 lakh 10% of commitment
• Expected IRR: 25% gross p.a.
• Upside Sharing: 20% of net profits of the fund with catch up
• Management fee: 2% p.a. of the total commitment amount
• Setup fee : 2.25% upfront
18
19
Asset Classes Tier-1* Tier-II**
Residential This sector is the only one to be left out of the correction
wrath. Heavy media reporting’s on probable correction, 40%
down-trend in sales and unavailability of finance to
developers are the major factors putting pressure on this
segment to correct. The investor community also varies on
the assumptions on account of bad sales and gives their “no
confidence motion” towards any visible appreciation. Markets
like NCR, Pune, Hyderabad and Chennai would set the course
of correction on the forthcoming over-supply.
These cities still manage to sell from the attractive entry point
(Avg. Rs.2800-3600 per sqft) but are getting over-supplied in
pockets. A recent report from Knight Frank suggests that these
cities have seen lot of investor confidence between 2007-2009
which for some reasons have seen 30% down-trend. Typically
the investor’s early buy-in and upfront payment of the total
consideration for best discount gives the developer strong hold
time for local demand. Ironically, across markets Investors
contribute not more than 15% of sales.
Commercial/IT Still in the shadows of over-supply and cautious expansion
approach by corporate, this segment has gone through
correction. Rates per sqft have seen almost 30% down-trend
and will be stagnant for the coming 2-3 quarters. Surely, the
segment is at the down-tip of the cycle, and is the best
opportunity for companies looking for long term holding of
real estate office space. Since most of the commercial growth
had happened in 05-06, many lease agreements are getting
expired giving way for companies to shift base, re-negotiate,
etc. IT/ITEs would remain the main driver for consumption.
Commercial segment not that significant, but unlike Tier-I the
price differentiation is double favoring commercial since most
of them are in CBD areas.
Retail Sales have definitely recovered but distress in the over-
supplied market is evident. Many deals have been done on
Revenue Share, giving more control to the Lessee to hold
price per sqft for a longer time-frame
Unlike the Tier 1 markets the retails is unable to cope with sales
and thus the sales to rent ratio is becoming bigger pulling down
the rent paying capacity. Important point also is that, unlike the
Tier 1 markets more than 40% of any mall in these cities are
operated by local franchisees making cash-flows not regulated
Land Land is highest in demand and still a maintaining a steady
growth of 15-20% per annum
Very similar to the trend in Tier 1 cities. Opportunistic
investment can really give great returns since N.A land is still
available cheap (between 200-300 per sqft)
20
Markets Major Locations/Zones Total Sqft (In Mn), Expected in
2011-2013
Established Builders
Bangalore Hebbal, Whitefiled, Hosur Road, Jayanagar, MG Road,
Malleshwaram
74Mn Sqft, out of which 60% supply is
in Hosur & Whitefiled followed by 18%
in Hebbal
Shobha, Prestige, Salarapuria,
Purvankara, Brigade Group, Nitesh
Estate, Mantri, Confident group, Pride
Group
NCR Gurgaon - DLF city, Sohna Rd, Manesar
Noida – Sec 14,15,92,93,128 and Greater Noida
Ghaziabad – Indirapuram, Vaishali
Faridabad – prime chandanwood village, Sec 78,89
436 Mn sqft, out of which Noida-32%,
Ghaziabad-21%, Gurgaon-24% &
Faridabad-12%.
Parsavnath, Emaar MGF, DLF, Unitech,
Ansal properties, M2K, Uppal, Cosmos,
Suncity, Vipul
Mumbai Prime Residential Among Zones
Napean Sea Road, Tardeo, Worli, Lower Parel, Bandra,
Andheri West, Juhu and Powai
Mid Segment Among Zones
Prabhadevi, Ghatkopar, Goregaon, Malad, Gorbunder,
Kalyan, Dombivili, Belapur and Panvel
183 Mn Sqft, out of which 69% is
accounted from Prabhadevi, Ghatkopar,
Goregaon, Malad, Gorbunder, kalyan,
Dombivili, Belapur and Panvel.
Malad/Goregaon accounts for more
than 23mn sqft and other btw 10-12Mn
sqft
Hiranandani Developers Pvt Ltd,
Marathon Realty Pvt Ltd, Akruti City
Ltd, Kalpataru Ltd, K Raheja Universal
Pvt Ltd, K Raheja Corp, Lokhandwala
Group of Companies, Sheth,
Rustomjee, DB Realty, Godrej
properties, Oberoi to name a few.
Hyderabad Banjara hills, Shameerpet, Securabad Contonment,
Ghatkesar, Old Hyderabad and Shamshabad
58 Mn sqft, out of which 58% supply is
expected in and around Hi-Tech city
DLF, Jayabheri, Manjeera, Mantri,
Saisree, SMR Holdings, Aliens Group
Residential Market Snapshot (Supply and Developers)
As you would find out from the below mentioned table, most cities have supply concentrated in a particular zone and investment in these zones would belucrative (entry point being low) with a long term view, since the supply would always keep the capital value appreciating to 5-7% per annum. Rest zoneswould be always speculative and demand led behavior. The only differentiator would be quality development which could command premium.
Pune Pimpri Chichwad and Chakan,
Hinjewadi, Baner, Audh, Wakad and Balewadi
Kothrud, Kondwa, Hadapsar, Central Pune
Kalyani Nagar, Viman Nagar, Kharadi
93 Mn Sqft, out of which over 70% is
accounted by Pimpri Chinchwad,
Hinjewadi and Kalyani Nagar zones
Kumar Builders, Gera, Lunkad,
Konark, Goel Ganga, Marvel,
Magarpatta, Rohan
Kolkata CBD Areas-Ballygaunge, Carmac street and Park street
Salt Lake & EM Bypass
North 24 Parganas-Rajarhat, Barasat, madhyamgram
South 24 Parganas – narendrapur, Sonarpur
Batanagar & Mahestala
55Mn Sqft, out of which North 24
Parganas accounts for more than 50%
of supply
Ekta Developers, Eden group, Fort,
Mayfair, Merlin, Srijan group,
Swastic, Somani, Godrej, GM Group,
nangalia, Orbit, Bengal Sharachi, Sriji
Developers
Chennai North Chennai – Ayanavaram, Kilpauk, Korathur, madhavaram, Perambur, Villivakam
South Chennai – Adambakam, Chromepet, madipakkam, Medavakkum, Sholinganur, OMR, Selaiyur, tamabaram, Urapakam, Velachery
West – Ambattur, Annanagar, Avadi, KK Nagar, manapakam, Nolambur, Porur, salingramam, Sriperumpudur, Vadapalani
Central – Adayar, Alwarpet, Egmore, mataliyapuram, Nungampakkam, Parry’s, Tnagar
68 Mn Sqft, of which South Chennai
accounts for 64% of supply
Emmar, Ozone, Chaintanya, Mantri,
Doshi, Sabari, Hiranandani, L&T,
Unitech
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Please Note:1.Tier I* markets include Mumbai, Delhi & NCR, Bangalore, Pune, Chennai, Hyderabad and Kolkata2.Tier II* markets includes all state capitals other than the Tier I markets3.The IC note is proposed to be presented every quarter
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The information and views presented here are prepared by Karvy Private Wealth or other Karvy Group companies. Theinformation contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouchfor the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any lossincurred based upon it.
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